WASHINGTON, DC – The United States has long been viewed as the “land of opportunity,” where those who work hard get ahead. Belief in this fundamental feature of America’s national identity has persisted, even though inequality has been gradually rising for decades. But, in recent years, the trend toward extremes of income and wealth has accelerated significantly, owing to demographic shifts, the economy’s skills bias, and fiscal policy. Is the collapse of the American dream at hand?
From 1997 to 2007, the share of income accruing to the top 1% of US households increased by 13.5 percentage points. This is equivalent to shifting $1.1 trillion of Americans’ total annual income to these families – more than the total income of the bottom 40% of US households.