The most common way of analyzing income distributions is to divide the entire population into 20% units (called quintiles) on the basis of their income level, and then to calculate what percent of the total income pie goes to each quintile (20%) of the population. If income were divided equally, then each quintile of the population would receive exactly 20% of the income pie. The farther from this "perfectly equal" distribution, the greater the level of inequality.Examine the chart below to discover how much inequality existed in American society in 1998.
Would you characterize it as "a little" or "a lot"?
What is happening to income distribution in America?
Are we experiencing increasing equality, increasing
inequality,
or not much change?
Examine the chart and table below to look at trends
over
the last 35+ years.
Evidence suggests that there has been increasing income inequality over this period, especially in the 1990s and especially in the highest and lowest income quintiles.
Many individuals live in neighborhoods in which most people have similar incomes. Oftentimes it is difficult to "see" the income diversity that actually exists in the larger society. Examine the chart below to see where your family fits into the income hierarchy -- you might be surprised.
If your household's 2005 income was over $166,000 then it was in the highest 5% of all households. Any income over $91,705 placed your household in the highest income quintile.60% of all American households had incomes of less than $57,660.
40% had incomes of less than $36,000.
20% had incomes of less than $19,178.
