The decline of work

Thirty years ago, in the 1980s, close to 60% of the income of all Americans came from work. Today, this figure is barely over 50%. This numbers come from a wonderful study produced by Wells Fargo (you can find it here). Danielle Kurtzleben, at Vox, highlights this chart that explains were income is coming from now:

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Surprised? Government transfers have increased its share five points, although the reason behind this is simple: demographics. There are many more Americans on social security now than 34 years ago, meaning that a higher share of income comes from the government, not from wages. This is part of a long term trend - and it is one of the few things that have contributed to the very modest rise in income for most Americans in the last few decades.

Of course, this graph doesn´t tell us much about how income is being distributed, and how it compares to the returns of capital. We discussed this last month, talking about inequality - more here. Spoiler alert: it is not pretty.

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