Income Inequality of the Past - 5/27/14
There continues to be a considerable amount of focus on income inequality in America. But the early 21st century is hardly the only moment in economic history during which inequality became deeply problematic in America. As pointed out in a recent article authored by writer Eduardo Porter, America faced similar issues during the late 19th and early 20th century.
During that period, the richest 1 percent of Americans reaped nearly half of all wealth. Meanwhile, ordinary Americans failed to keep up with inflation. This was the era of the Haymarket riots and also produced author Upton Sinclair’s the Jungle. According to Porter, workers staged 1,500 strikes in 1886 alone. Ultimately, that period of vast inequality led to a period that came to be known as the Progressive era.
Women finally obtained the right to vote. Congress passed the Sherman anti-trust act. A progressive federal income tax was enacted. We may be in for another period of ferment in America. The income of the typical American family has scarcely risen since the 1970s when adjusted for inflation. Remarkably, the share of national income captured by the wealthiest 1 percent of Americans is now even higher than it was at the dawn of the 20th century.