Rising inequality

There is a perception that both income and wealth have been less equally distributed among households over recent decades. N.C. State University economist Mike Walden takes a look at whether it’s a mistaken perception.

“No, it is very true. … If you look at both income, which is what someone would earn — a household would earn — in a year, as well as wealth, which is the accumulation of their assets. we see that that has become more concentrated in terms of the percentage owned by a fewer number of households — obviously households at the top end of both the income and wealth distribution.

“Now this doesn’t mean — this doesn’t mean — that that wealth and income (that high income people have gotten) has come at the expense of middle- and low-income people. Because they have actually — middle- and low-income people — have also seen increases over time in both their income and their wealth. But it simply means that the growth has been bigger at the top end.

“And I think there (are) a couple of reasons for that: One, and I think this is the dominant reason, is that there over the last several decades (there) has been a strong correlation between income wealth and education. Those with more education, because of our changing economy, are the ones who earning more money. Therefore they are able to invest and gather more wealth.

“I think a more subtle reason has to do actually … with marriage. What we have seen increasingly over the last few decades is highly educated males marrying highly educated females. And so that sort of creates this double-bang effect from education. So those households with those two highly educated individuals are seeing the really big increases in both their income and their wealth.”