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| 1 minute read

The U.S. Economy: Growing and Unequal

The American economy has grown more productive from 2002 to 2021, with real GDP growing by 45% while real per capita income grew only 37% during that period. Despite the productivity of our economy, people were worse off in 2021 than in 2022 because of income inequality. In 2002, the wealthiest 20% of the population (adjusted for household size) received 48% of all income compared to only 4% for people in the lowest income quintile. By 2021, those in the highest quintile received 51.2% of all income, but those in the lowest quintile were sharing only 3.3% of the pie. 

This isn't an accident but the explicit result of policy at a variety of levels, as illustrated by the Michigan Court of Appeal's unanimous decision to block an increase in the state’s minimum wage from $10.10 to $13.03. This would provide a much-needed boost for the state's lowest-paid workers, but at least Michigan is not one of the 20 states that still have a minimum wage of $7.25 per hour, not including three states that have a slightly higher minimum for firms with more than four to six employees. Even worse, Georgia and Wyoming offer exemptions so that some employers can pay a $5.15 per hour minimum wage for some employers.

From 2002-2021 (the last 20 years for which data is available), the total U.S. real gross domestic product (GDP adjusted for inflation, or Real GDP) increased by approximately 45%, from $13.5 trillion to $19.6 trillion in chained 2012 dollars.


economic development, economics, equity and inclusion, fourth economy, strategy & policy