Great Divergence (inequality)

This article is about the post-1980 growth in inequality. For era of dominance of Western Civilization, see Great Divergence.

The Great Divergence is a term given to a period, starting in the late 1970s, during which income differences drastically increased in the United States and, to a lesser extent, in other countries. The term originated with the Nobel laureate, Princeton economist and The New York Times columnist Paul Krugman,^[1] and is a reference to the "Great Compression", an earlier era in the 1930s and the 1940s when incomes became more equal in the US and elsewhere.^[2]

The Great Divergence contrasts with the "Great Prosperity" or Golden Age of Capitalism, where from the late 1940s to mid 1970s, at least for workers in the advanced economies, economic growth had delivered benefits broadly shared across the earnings spectrums, with inequality falling as the poorest sections of society increased their incomes at a faster rate than the richest.^[3]

Scholars and others differ as the causes and significance of the divergence,^[4][5] which helped ignite the Occupy movement in 2011. While education and increased demand for skilled labour is often cited as a cause of increased inequality,^[6] especially among conservatives, many social scientists^[7] point to conservative politics, neoliberal economic and social policies^[8][9] and public policy as an important cause of inequality; others believe its causes are not well understood.^[10]

See also

• Economy portal
• 1970s portal
• 1980s portal
• 1990s portal
• 2000s portal

• Economic history of the United States
• Economic inequality
• Economic stagnation
• The End of Work
• Socioeconomic mobility in the United States
• Wealth inequality in the United States