Tweet [1]
The Manhattan Institute [2]‘s Diana Furchtgott-Roth summarizes recent empirical findings by Northwestern University economist Robert Gordon on income and income-‘distribubution’ in the United States [3]. Some key paragraphs:
According to Professor Gordon, “Longer-term moving averages show no decline in labor’s income share over the last four decades following a marked increase in the previous three decades going back to 1938. We also focus on measures of top pay, including CEOs, and these show no further increase of income shares between 2000 and 2006/7, prior to the 2007-08 stock market collapse that caused sharp declines in the top income shares.”
The one group that has continued to expand income shares, according to Professor Gordon, is not the top one percent, but those in the 96th to 99th percentiles. The income share for this group increased from 10% in 1967 to 13% in 2006.
(HT Andy Roth over at the Club for Growth [4])
By the way, I put ‘distribution’ (as in “income-‘distribution'”) above in scare quotation marks because incomes in market economies are not “distributed”; they’re produced and earned.