Rising Income Inequality is Between Middle & Top

Perhaps for the first time since we’ve kept track of such things, higher-income folks work more hours than lower-wage earners do. Since 1980, the number of men in the bottom fifth of the income ladder who work long hours (over 49 hours per week) has dropped by half, according to a study by the economists Peter Kuhn and Fernando Lozano. But among the top fifth of earners, long weeks have increased by 80%.

This is a stunning moment in economic history: At one time we worked hard so that someday we (or our children) wouldn’t have to. Today, the more we earn, the more we work, since the opportunity cost of not working is all the greater (and since the higher we go, the more relatively deprived we feel).

In other words, when we get a raise, instead of using that hard-won money to buy “the good life,” we feel even more pressure to work since the shadow costs of not working are all the greater.

We typically think of America’s income inequality, which has steadily increased since 1969 as a process in which the rich get richer and the poor get poorer. Surely, that should, if anything, make upper income earners able to relax.

But it turns out that the growing disparity is really between the middle and the top. If we divided the American population in half, we would find that those in the lower half have been pretty stable over the last few decades in terms of their incomes relative to one another. However, the top half has been stretching out like taffy. In fact, as we move up the ladder the rungs get spaced farther and farther apart.

NYU Sociology Professor Dalton Conley in yesterday's NYTimes

MP: Interesting explanation of rising income inequality - the higher income quintiles are getting richer because they're working harder, and the lower and middle income quintiles are doing about the same, even though they're less likely to work long hours.