Income Gap in America Widening, Middle Being Hollowed Out [GRAPHS]

The economists separated 25 job categories into a high skill group (e.g. legal, computers and math), mid skill group (e.g. teaching, administrative support) and low skill group (e.g. personal care, food preparation).

The median salary of the high skill group rose from 1980 to 2009.  For example, the median salary (held in constant 2009 dollars) for computer and math occupations rose from $49,000 to $67,000. 

The median salary for the mid skill group mostly stayed constant or fell.  For example, the median salary for construction fell from $38,000 in 1980 to $35,000 in 2009.

The median salary for the low skill group rose modestly. 

As a result of this development, the income gap between the high skill group and the low skill group has widened noticeably.  Even within the mid skill group, the differences in median salary have become more dispersed.

(Image below from NY Fed)

(The ultra-rich in the U.S., meanwhile, have also increased their income since 1980.  Chart below from DoubleLine Capital).

Moreover, the high skill group and the low skill group have accounted for a disproportionate number of jobs created in the last three decades.  In 1980, 75 percent of American workers belonged to the mid skill group.  By 2009, only 68 percent of American workers belonged to the mid skill group.

Ironically, the top marginal income tax rate has also steadily fallen since 1980, thereby exacerbating the gap between the disposable income of the richest and poorest Americans.

(Data from Tax Policy Center)