Written by: Stephen Hsu
Primary Source: Information Processing
This graphic is from today’s NYTimes: Why American Workers Without Much Education Are Being Hammered.
Aside from the human capital (education) point the figure makes, I’m a bit puzzled by the following: real per-capita GDP is probably up at least ~50% (e.g., ~2% x 23 years) over the 1990-2013 period. Where did those gains go? Into the pockets of a small invisible group that doesn’t show up in the graph (note use of medians, not averages)? It seems that everyone except the members of this small group were “hammered” over the last two decades …
Note added (with better data): This source has 2013 GDP at $16 trillion versus $9 trillion in 1990 (both figures in 2009 dollars). Total US population went up 26% (316 million from 249 million). The percentage of the population with college degrees went from about 20% to 30%. It still appears to me that much of GDP increase during the period did not go to workers or ordinary people.
If you annualize any of the real income changes in the graph over 23 years, the change is small — less than 1% per year. Yet real GDP grew at about 3% per year on average during the period. The graph below (from this 2007 post) might shed some light on the mystery (even the top quintile saw little income appreciation):