Capitalism involves competition. Competition involves winning. This chart shows who’s winning. Unless we change the rules, it shows who’s already won.
The gray line represents inflation-adjusted income growth in the U.S. between 1946 and 1980. The gray line is higher on the left side of the chart than on the right, because, in those years, annual income growth for low-income people (the people on the left of the chart) was higher than income growth for high-income people (the ones on the right). That meant people who made less money were gaining (however slowly) on people who made more.
As you can see, the red line goes in the other direction. It shows income growth between 1980 and 2014. The red line is higher, in fact way higher, on the right than on the left because income growth for high-income people (the ones on the right) was much higher than for low-income people (the ones on the left).
In other words, since 1980, people who made more money pulled away from people who made less. The fact that the red line goes straight up at the end shows that the people who made the most money (not just the 1% but the 0.1%, 0.01% and 0.001%) pulled away even faster. Thus, since 1980 (when Ronald Reagan was elected), the better off you were, the better off you’ve done. And the worse off you were, the worse off you’ve done.
The chart is from a column by David Leonhardt of The New York Times. He goes into some of the nuances and suggests ways to fix this growing inequality:
Different policies could produce a different outcome. My list would start with a tax code that does less to favor the affluent, a better-functioning education system, more bargaining power for workers and less tolerance for corporate consolidation.
He also notes that the president* and his Republican co-conspirators are trying to make the situation even worse. They want the opposite of what’s needed: even lower taxes for the rich, less money for public education, weaker unions and less competition for big corporations.
So the chart shows who’s been winning. What it doesn’t show is that the game may already be over. Increased wealth translates into increased political power. But the more power you have, the easier it is to change the rules so that you can accumulate even more wealth (viz. the Citizens United decision). From the point of view of the upper 0.001%, it’s a virtuous circle. For the rest of us, it’s vicious.
Unless we fight back – which means being more politically active, as in voting every chance we get – it will become even vicious-er.