Inequality: A Trend Analysis

Abstract

The attempt to grapple with poverty during the 1960's led to renewed recognition of the importance of inequality in affluent societies. This paper summarizes trends in the share of national income going to the bottom fifth of the population, ranked according to income, and in the composition of that bottom fifth over the past twenty years. Between 1947 and 1967, despite the decline in the share of total national income going to the top 5 percent, little progress was made in increasing the share of the bottom 20 percent. A specific timetable of income-redistribution is needed for the 1970's so that we can assess our programs in increasing the share of national goods going to the poor and to minorities. Over the next ten years, we should seek to expand the share of income going to families in the bottom 20 percent of the population by at least 2 to 3 percent—from 5.4 percent in 1967 to 7 or 8 percent in 1977. In the mid-1960's considerable progress was made in reducing inequality between blacks and whites: the ratio of nonwhite to white income increased from 53 percent in 1963 to 62 percent in 1967—an increase of approximately 2.25 percent a year. This gain should continue, so that by 1979, a black income would be at least 89 percent of white income.