Look: I am eager to learn stuff I don't know--which requires actively courting and posting smart disagreement.

But as you will understand, I don't like to post things that mischaracterize and are aimed to mislead.

-- Brad Delong

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Monday, February 22, 2010

Reagan Era Income Distribution

I think we can, without too much argument, define the middle class as the middle income quintile.

This graph plots the top income level of the first four quitiles.  Data from The U.S. Census Bureau.

The middle class is bounded by the pink and yellow lines.  The top income of the middle quartile did not crack through the $30,000 ceiling until 1984.  Stated another way, until 1984, $30,000 was above the top of middle class income.

The next graph indicates the tops of four quintiles, and the bottom limit of the of the top 5%.

In 1980, it only took $50,000 to burst into the top 5%.  With the passage of time, the spreading of the lines indicates the increasing wealth disparity, which is among the most prominent aspects of the Reagan legacy.

The slopes of the various lines indicate how much your income would have to increase at various levels to avoid sliding down through the social strata.

And slide they did -- at the bottom, anyway.  This post shows that Reagan and Bush I were pretty good at increasing the poverty rolls.

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