Income inequality has been on the rise since the late 1970s, but the economic crisis of 2008 dramatically compounded this problem in the U.S. There is wide agreement across the political spectrum that high inequality is contributing to stagnant household income, rising poverty rates, and increased borrowing and debt, though there is much less agreement on remedies. Inequality in America, a new report from the Brookings Institution, provides a snapshot of the issues posed by the growing concentrations of income. It demonstrates how specific factors, including technological change, international trade, changes in labor market participation, and the increasing role of the financial sector, have exacerbated income inequality. Increased investment in crucial public goods—education, a more progressive and simplified tax system, and international cooperation to avoid a race to the bottom can help reestablish equal opportunity, the authors assert.
Source: Brookings Institution, 8/14/12, Income Inequality