American wage earners became more unequal last year

Wage levels of American workers continued to diverge last year, as a greater share of overall earnings came from the highest earners. The median earnings of American workers were about $29,850 last year, up about 6 percent from 2013, according to data released this week by the Social Security Administration. But the distribution of earnings has also changed. Visualized as a curve showing the percentage of all earnings brought home by people in each earnings bracket, the distribution of earnings has become flatter — continuing a trend that has been ongoing for the last 25 years. That indicates that Americans are less likely to earn the same as their neighbor than in the past. Read MoreRich Americans got a lot richer last year Of course, higher wages in general are a good thing — and it's good that more Americans are earning in higher brackets. But the curve has not simply been shifting to the right, it has also been spreading out. (To be clear, if all Americans earned the same, the chart would be one giant vertical line. A flatter line means a less equal country). Another measure — the curve comparing the percentage of earnings going to each percentage of earners — is getting shallower, also indicating a higher level of inequality. The percentage of all earnings taken home by people making more than $200,000 has tripled since 1990, unadjusted for inflation. If we adjust that cut-off for inflation, inequality is still shown rising significantly, with a long "tail" of the chart accounting for 9 percent of all earnings, compared with 6 percent in 1990. Read MoreMore CEOs donate to Clinton than to any GOP candidate Economists and politicians can argue about whether that change is good or bad, but it's certainly a marked shift in how net compensation is distributed in America.

 

By Mark Fahey  

Source:http://www.cnbc.com/2015/10/21/american-wage-earners-became-more-unequal-last-year.html