Sociology Now, Census Update

Income Inequality

At the same time that most people believe that they are
middle class and believe that the system works for them, the
United States is increasingly a nation of richer and poorer.
Sociologists measure the income inequality in a society by
comparing the top incomes with the bottom incomes. In the
United States, the top 5 percent earn an average of 11 times
more than the bottom 20 percent—this is the most extreme
example of income inequality in the developed world. In
contrast, the top 20 percent in Sweden earn less than four
times the bottom 20 percent, and in Japan, it’s three to one
(Economic Policy Institute, 2007). In fact, the income gap
in the United States is the widest of any industrialized coun-
try among all countries included in the Organization for
Economic Cooperation and Development (OECD), an inter-
national organization that measures and assists in economic
development (Figure 7.2).
The income gap in the United States actually seems to
be widening: The gap between rich and poor more than
doubled between 1980 and 2000. The richest 1 percent have
more money to spend after taxes than all of the bottom
40 percent. The richest 10 percent of Americans control

SOCIAL CLASS 217

Finland

Sweden

Denmark

Germany

Netherlands

Norway

Belgium

France

Australia

United Kingdom

Switzerland

Canada

United States

0 50 100 150 200 250

111%

113%

38%

38%

43%

41%

41%

50%

43%

43%

34%

35%

55%

45%

39%

123%

131%

133%

143%

136%

148%

148%

157%

185%

180%

210%

Percent of U.S. median income

received by low-income

(10th percentile) households

Percent of U.S. median income

received by high-income

(90th percentile) households

FIGURE 7.2Share of U.S. Median Income Received by Low- and High-Income OECD Households, 2000

Note:These relative income measures compare the gap between the top 10 percent and the bottom 10 percent of household income in each country to the U.S.
median income in purchasing-power-parity terms.
Source:Smeeding and Rainwater (2001) and Smeeding (2006). Figure 8D, taken from the Economic Policy Institute’s State of Working America 2006/2007, available
at http://www.epi.org

©The New Yorker Collection 1988. Joseph Mirachi from cartoonbank.com.

All Rights Reserved. Reprinted by permission.