We’re Fragmenting Because Our Experience Of The Economy Is Fragmenting

The technocrat and capital-owning class is delighted with the economy, and can’t understand why everyone isn’t prospering.

You’ve probably seen some version of this chart of average household income in America before. (You may have seen charts of median household income as well; here’s an article on the difference between the two methods of measurement: American families are learning the difference between median and mean)

Here’s the data in table format, if you prefer: Household Income Quintiles.

The point is that there is an enormous difference between the average household incomes of the bottom 80% and the top 10%, 5% and 1%. It’s important to separate the various income brackets, as including the top households distorts the average. Here we see the average household income of the bottom 80% of households is around $50,000, while the average income of the top 10% (which includes the wealthy 1% and the super-wealthy .1%) is almost four times greater: $185,000.

You’ve probably seen a version of this chart, too, which shows that the real (inflation-adjusted) income of the bottom 90% has gone nowhere for the past 40+ years.

While the mainstream wrings its hands over the political and social fragmentation that is visible everywhere, it ignores the economic fragmentation that’s the source: we’re fragmenting because our experience of our economy and society is fragmenting.

In the good old days of secular growth of everything–energy consumption, wages, profits, employment, government spending, consumer debt, housing construction, business investment and consumer spending–people in every economic class shared a common experience that the financial future of their household was improving.

The economic pie was expanding, and everyone’s slice was getting bigger–some more than others, of course, but there was enough trickling down to expand almost everyone’s share of the economy.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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