20 Facts About U.S. Inequality that Everyone Should Know

Inequality in the United States has been growing, impacting everything from wages to wealth distribution. Over the decades, disparities in income, education, and opportunities have widened, shaping the social and economic landscape. This article highlights 20 key facts about U.S. inequality, offering insights into how it has evolved and why it remains a critical issue for policymakers and citizens alike.

1. Wage Inequality

Over the past 30 years, wage inequality in the United States has grown significantly, reaching comparable levels before the Great Depression. However, this broad overview oversimplifies the nuanced patterns of change. Inequality trends differ between the top and bottom segments of the income distribution. "Lower-tail" inequality is represented by the ratio of wages at the 50th percentile (middle income) to those at the 10th percentile (lower income). In comparison, "upper-tail" inequality is represented by the ratio of wages in the 90th percentile (higher income) to the 50th percentile. The data reveals that lower-tail inequality surged during the 1980s before stabilizing slightly in subsequent years. In contrast, upper-tail inequality has shown a consistent upward trend since 1980.

2. CEO pay

Recent decades have seen a dramatic increase in the disparity between CEO compensation and the average worker in manufacturing or “production.” In 1965, CEOs earned 24.2 times more than the average production worker. This ratio remained relatively stable for years, reaching 34.9 in 1973. However, starting in the 1980s, the gap widened significantly. By 1989, CEOs made 70.4 times more, and this ratio climbed sharply to 125.6 in 1993 and 298.5 in 2000. Although it declined to 185.3 by 2009, the gap remains more significant than in the mid-20th century. This trend highlights how CEO compensation took off during the 1980s and early 2000s, marking a significant shift in corporate pay structures.

3. Homelessness

There are 750,000 Americans who are homeless on any given night, with one in five of them considered chronically homeless. The sheltered homeless population is disproportionately made up of males, Black individuals, middle-aged adults (ages 31-50), veterans, and disabled individuals. While males make up a majority of the sheltered homeless population, females are underrepresented compared to their proportion in the general U.S. population. Similarly, Black Americans are overrepresented among the sheltered homeless compared to their percentage in the general population. Middle-aged adults (31-50 years old) form the largest age group among people experiencing homelessness, while younger individuals (ages 18-30) and older adults (ages 51-61) are less represented. Veterans and disabled individuals also face higher rates of homelessness relative to their representation in the broader population.

4. Education Wage Premium

Only college graduates have experienced growth in median weekly earnings since 1979 (in real terms). Actual median weekly earnings for individuals with a college degree have consistently increased over time, surpassing $1,100 by 2009. Meanwhile, those with some college or an associate degree, high school diplomas, or less than a high school education have seen their earnings stagnate or decline. High school dropouts have faced the most significant decline, with their median weekly earnings decreasing by approximately 22 percent since 1979. This growing disparity underscores the increasing economic value of higher education in securing financial stability.

5. Gender Pay Gaps

Throughout much of the 20th century, the average woman earned about 60% of what the average man earned. Starting in the late 1970s, there was a significant rise in women’s relative earnings. By the early 2000s, women earned approximately 80% of what men earned, reflecting substantial progress toward closing the gender wage gap. However, this historic increase plateaued around 2005, and since then, the gender pay disparity has remained relatively unchanged, underscoring persistent inequities in wage equality.

6. Occupational Sex Segregation

Women and men often pursue careers in distinct fields, with occupations traditionally dominated by men generally offering higher wages than those typically held by women. Jobs such as child care, nursing, and secretarial work, where women are the majority, tend to have lower median earnings than roles like truck driving, mechanical engineering, and executive positions, which men predominantly hold. This division in job types and pay highlights a significant factor contributing to the gender wage gap.

7. Racial Gaps in Education

High school dropout rates remain lowest among white students and highest among Hispanic students, while college enrollment rates are lowest among Black students and highest among white students. Over time, the gap in high school dropout rates among these groups has narrowed significantly. However, the disparity in college enrollment rates has grown, with the differences between racial and ethnic groups becoming more pronounced. This highlights both progress and ongoing challenges in educational attainment.

8. Racial Discrimination

Racial discrimination remains evident in the labor market, as demonstrated by an experiment conducted in Chicago and Boston during 2001 and 2002. Resumes featuring "white-sounding" names were significantly more likely to receive interview callbacks compared to those with "black-sounding" names despite being identical in all other aspects. This disparity underscores persistent biases in hiring practices that disadvantage candidates based solely on perceived racial identity.

9. Child Poverty

In the United States, 21 percent of all children live in poverty, a figure significantly higher than in most other affluent nations. This stark disparity highlights the broader issue of economic inequality, as the poverty rate for children in the U.S. far exceeds that of the general population in many comparable countries, where social safety nets and targeted policies have helped mitigate child poverty to much lower levels.

10. Residential Segregation

Wealthier households in the United States often reside in separate neighborhoods from lower-income households. However, residential segregation based on income has significantly increased over time. Between 1970 and 2000, the likelihood of households in the top fifth of the income distribution living alongside those outside this group decreased, reflecting more excellent isolation. Similarly, households in the bottom fifth of the income distribution have become less likely to reside near those from higher income brackets, underscoring the growing divide in residential patterns.

11. Health Insurance

In 2007, 8.1 million children under 18 were without health insurance, with certain groups facing a higher likelihood of being uninsured. Children living in poverty were particularly vulnerable, with 17.6% lacking coverage. Hispanic children, at a rate of 20%, were the most likely to be uninsured among racial and ethnic groups, highlighting disparities in access to healthcare within the population.

12. Intragenerational Income Mobility

Intragenerational income mobility, which tracks movement between income levels over a person’s career, reveals limited upward mobility for those at the lowest income levels. Between 1994 and 2004, over 54% of individuals who started in the bottom income quintile remained there a decade later, while fewer than 4% advanced to the top quintile. This pattern underscores individuals' significant challenges in achieving upward economic mobility.

13. Bad Jobs

Jobs with poor wages and limited benefits are significantly more prevalent among non-traditional work arrangements. While 10% of full-time workers are in low-wage positions, the percentage increases substantially for part-time employees, with even higher rates for on-call and day laborers. Workers employed by temporary help agencies face particularly challenging conditions, with the majority earning low wages, lacking health insurance, and having no pension benefits. Independent contractors, whether self-employed or wage-and-salary workers, also experience reduced access to health insurance and pension plans, highlighting the disparities in job quality across employment types.

14. Discouraged Workers

Discouraged workers not actively seeking employment because they believe no suitable jobs are available saw a significant rise during the 2009 recession. By the first quarter of that year, the number of discouraged workers in the U.S. had surged to 717,000, marking a 70% increase compared to the same period in 2008. Among these individuals, young people, Black Americans, and, to a lesser extent, Hispanic Americans and men were disproportionately represented. Beyond the unemployed, there were 2.1 million marginally attached workers, including discouraged individuals, and 79.2 million people not in the labor force, highlighting broader labor market challenges during the economic downturn.

15. Wealth Inequality

Wealth ownership in the United States has become increasingly concentrated over the decades. In 1983, the top 10% of households held 68.2% of the total wealth, which rose to 73.1% by 2007. During the same period, the share of wealth held by the bottom 60% of households declined, further highlighting the growing inequality in the distribution of wealth across the country.

16. Intergenerational Income Mobility

Intergenerational income mobility examines how individuals shift to income levels different from their family's original economic position. The proportion of sons in the bottom income quartile declined from 46.2% in 1961 to 40.3% in the 1970s, indicating slight upward mobility. However, this trend stabilized in the subsequent decades, with the proportion remaining around 40% in the 1980s and 1990s, suggesting limited further progress in economic mobility.

17. Deregulation of the Labor Market

The proportion of wage and salary workers belonging to unions significantly dropped from 24% in 1973 to just 12.4% in 2008, with a more pronounced decline occurring in the private sector compared to the public sector. Concurrently, the actual value of the minimum wage experienced a sharp 25% reduction during the 1980s, diminishing its impact on the low-wage labor market. These simultaneous trends of falling union membership and a weakened minimum wage have contributed to the emergence of a more "deregulated" U.S. labor market, reshaping the landscape for workers, especially those in lower-income brackets.

18. Job Losses

Employment plummeted during the 2007-09 recession, with 3.1 million jobs lost in 2008 and an additional 4.7 million in 2009. These job losses were far more severe than in previous recessions, reflecting the unprecedented depth and length of the economic downturn. The cumulative impact of the recession on employment surpassed those of earlier periods, highlighting the scale of economic disruption experienced during this time.

19. Immigrants and Inequality

Immigration to the U.S. brings diverse workers into the labor force, with immigrants represented at both ends of the educational spectrum. Many immigrants are highly skilled and hold college degrees or higher qualifications. At the same time, another sizable group consists of individuals with lower levels of education, including those who did not complete high school. This distribution highlights the dual nature of immigration's impact on the labor market, contributing both specialized expertise and fulfilling the demand for less-skilled labor.

20. Incarceration

The incarceration rate in the United States has surged since the 1970s, making it one of the highest globally. This increase has disproportionately affected young Black males and those without a high school diploma. Among young Black males who are high school dropouts, an alarming 37% are currently in prison or jail – a rate that has more than tripled since 1980. This stark disparity highlights the intersection of race, education, and systemic inequalities within the criminal justice system.