🌅 What the Median Income Could Be

SOURCE

RAND Corporation

WHAT TO KNOW

• Researchers at the nonpartisan RAND Corporation examined a hypothetical scenario in which U.S. incomes and gross domestic product grew at the same pace from 1975 to 2018, finding the median American income would have risen from $42,000 in 1975 to $92,000 in 2018. Instead, the median U.S. income only rose to $50,000 in 2018, while income for the top 1% of earners rose from $257,000 in 1975 to $761,000 in 2018. Put differently, over the 43-year period that GDP grew by roughly 120%, median income rose just 17%, while top income grew 166%.

WHY IT MATTERS

• A new study by the same researcher extended the timeline to 2023, finding the bottom 90% of earners would have brought home an additional $3.9 trillion in 2023 had incomes and GDP grown at the same pace since 1975. Over the full 48-year period, the bottom 90% of earners would have taken home a staggering $79 trillion in additional income.

CONNECT THE DOTS

• In 1975, the bottom 90% of earners brought in around two-thirds of all taxable income in the U.S. However, that share fell to less than half in 2015, with the latest data indicating it’s fallen even further in the years since (from 49.5% in 2015 to 46.8% in 2019). In other words, the top 10% of U.S. earners captured a nearly 3% larger share of the country’s total income “pie” in just four years.