The Income Inequality Debate

Inequality in the United States today is substantially higher than almost any other developed nation, and even some developing countries such as Russia and India. According to the Congressional Budget Office, the average real after-tax household income for the top 1 percent of Americans rose 275 percent from 1979 to 2007, while income for the majority of the population--21st through 80th percentiles--grew just 37 percent over the same period.

Complex causes--including globalization and technological change--have led to greater disparity, as it becomes increasingly less likely that an individual will reach a higher economic status than his or her parents.

This Backgrounder examines the causes and impact of rising inequality, and the debate it has sparked in the United States.