In the post war period, the UK, US and other European countries generally had a reduction in income inequality. This was helped by periods of full employment, rising real wages and progressive tax and benefit systems.
However, since the early 1980s there has generally been a reversal of this trend. The rich have got richer, and the poor have become relatively poorer. (Inequality in US). (Inequality in UK) It is not that the real incomes of the lowest paid has fallen (though in some cases real incomes have been stagnant) but, they have fallen behind higher income earners. The gap between the highest paid and lowest paid has increased. In the past couple of decades it feels like the ‘rich have got richer and the poor have got poorer’. Why is This?