Most of the economic gains of the past three decades have gone to the wealthiest segments of the population. From 1979 to 1998, the inflation-adjusted income of families in the poorest fifth of the population did not improve at all, while incomes for the whole population increased by 20 percent. Incomes at the very top have increased even faster. The net financial wealth of the top one percent of households now equals the combined wealth of the bottom 95 percent of American households. This has not been an accidental outcome of patterns of economic growth, but instead the result of deliberate government policies that have had the effect of redistributing income upwards.
Income inequality is also the result of erosion in the minimum wage.
The buying power of the minimum wage has fallen by more than 20 percent since a peak in 1979, even as productivity has increased by more than 35 percent. Increasing the minimum wage is good for the economy. Moving working families out of poverty will improve children's health and education, helping to build a strong future. And recent research shows that increasing the minimum wage does not tend to increase unemployment. In 1967, when the minimum wage peaked in real purchasing power, unemployment was at 3.8 percent, and remained low the next year.