The ‘Great Divergence’ is a nod to Timothy Noah’s very accessible and well-written book from 2012 on income inequality. Specifically, it’s about the divergence of income growth claimed by the ~1 percent of earners versus everyone else in the last thirty years or so.
This is typically represented in chart form, like this one from the gurus at the Center for Budget and Policy Priorities (from their excellent primer on the subject):
This is a chart from economics professor Pavlina Tcherneva, which made the rounds on Twitter yesterday and the blogs today, showing much the same phenomenon except it highlights U.S. income captured by the top 10 percent versus everyone else during economic expansions since 1943. As she explains in the tweet, “The WAY we grow in the US brings more #inequality. Distribution of income during expansions (trough-to-peak).”
Data-wrangling aside (as Kevin Drum notes in his post on the same subject “[t]he precise numbers (from Piketty and Saez) can always be argued with“), it’s hard to ignore the same basic break circa the late 70s. I could have almost posted this without comment but, well, this is a blog after all. This is the essentially the income picture of mine and many others lifetimes so far: a rise in absolute inequality and little to no gain in the aftermath of cyclical economic downturns. This is our story, and for the vast majority of us it isn’t pretty.