New figures released by the U.S. Census Bureau yesterday show that income inequality in the United States rose in 2011 to the highest point in more than forty years, leaving nearly one in six Americans in poverty. While average household income for the richest 20 percent continued to rise towards pre-recession levels, income for the other 80 percent of Americans fell for the fifth year in a row.
The latest data are disappointing but not unexpected. The income share of the middle class—defined here as households within the middle 60 percent of the income distribution—has been declining for decades. According to the Census, the middle class stopped earning the majority of national income in the 1980s, and fell below the share of the top 20 percent by the early 1990s. Last year, the top 20 percent earned 51.1 percent of aggregate income while the income share of the middle 6o percent fell to 45.7 percent, the lowest level in nearly one hundred years.