Income and Wealth Disparity in the US CIS Block

Classes in the US Upper class– accumulated wealth vs. “working rich” Middle class– 60%, $31,000-$188,000 More educated Older Racially diverse Immigrants Lower class Poverty line-- $24,036 in 2015 Poverty rate– falling 26% in 1967 15% in 2015

Changes in the middle class in the us Early income inequality in US– income tax 1913 Peak of income inequality-- 1928 Top 1% owned 19.6% of income Union membership at 10% Income equality– 1940’s Labor productivity doubled High top marginal tax rate 33% union membership Top 1% owned less than 10% of income Consequences?

Changes in the middle class in the us continued 1960’s and 70’s– changes in union membership and regulations Top incomes began growing much faster than middle or bottom By 2011, union membership at 11.3% Top marginal tax rates in the 30%’s Top 1% owns about 20% of income, top 3% owns half of wealth

Why the middle matters Economic success Education = highly-trained human capital Market for demand Innovation and small business Political/ social “goods” for a strong economy, i.e. infrastructure, regulations, etc.

International trends International changes Percentage of middle class in the world North America 18% Europe 36% Asia 28% Africa 8% Central/ South America 10% International changes Denmark– 1991 80%, 2010 80% France– 1991 72%, 2010 74% China– 2000 4%, 2012 68% US– 1971 61%, 2015 49.9% Strongest economies have large middle classes

Fixing the problem Regulations Taxes Trade Education Innovation

Sources Cheatsheet.com “The Middle Class is Shrinking: Why Does It Matter?” by Michael Sliwinski Cbpp.org “A Brief History of Income Inequality in the United States” by Matthew Johnston