Life in the Roaring Twenties

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Who were "winners" and "losers" of prosperity in the USA during the 1920's?  

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The 1920s was a time of fairly rapid economic growth in the US, but also a time of rapidly widening economic inequality.

This means that while the total amount of wealth in the US was growing (about 3.4% per year), and the total amount of wealth per person was also growing (about 1.9% per year), this wealth was not being distributed evenly among the population.

The "winners" were those at the top of the income distribution; the share of income received by the richest 1% of people rose from about 15% in 1920 to 23% in 1929.

The "losers" were everyone else; from 1920 to 1929, the share of income received by the poorest 90% of people (which is to say, most people) fell from about 58% to about 52%.

It's important to be clear that this does not necessarily mean that people got poorer---they got a smaller share of a larger amount of wealth, which could end up bigger or smaller than they had before. In practice, the absolute amount of income for most Americans was about the same, while those at the very bottom (roughly the poorest 20%) actually did see decreases in their absolute standard of living.

The really scary thing about all this is that it seems to be happening again---the income share of the top 1% today is now comparable to what it was in 1929, and growth in GDP per capita is actually somewhat slower. Unless something changes, we seem to be headed toward a world where economic growth is primarily something the richest people receive, and everyone else is left behind or even made worse off.

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