Why is income inequality rising for U.S. families and households, but not for individual Americans?
Having now shown that there has been absolutely no significant change in the level of inequality among U.S. individual income earners from 1994 through 2010, we thought we'd take a step back and look at the data for U.S. families and for households to examine those trends over time.
The chart below shows what we find for each grouping of Americans according to their Gini Coefficient, where a value of 0 indicates perfect equality (everyone has the same income) and a value of 1 indicates perfect inequality (one person has all the income, while everyone else has none):
In the chart above, we've adjusted the vertical scale to zoom in on the data, which magnifies the amount of any change from one data point to the next.
Starting with the topmost line on the chart, shown in red, which applies to all individual income earners in the United States, we see that this group contains the greatest degree of inequality by income, according to its Gini ratio. Here, there is no meaningful change in the amount of measured income inequality for the personal income distribution for the years from 1994 through 2010 (or if you really want to stretch, there has been a very slight decline in individual income inequality over that time - in our view, it is too slight to be meaningful as it may be the result of natural variation from year to year.)
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