Income Inequality and the Economy: The Impact on Workers and - PowerPoint PPT Presentation

Income Inequality and the Economy: The Impact on Workers and Consumers Public Affairs Forum Date: September 13, 2017 Presented by: Steven Fazzari Bert A. and Jeanette L. Lynch Distinguished Professor of Economics at Washington University

Recent Stagnation Historical Comparison of Business Cycles (Peak-to-peak growth of real GDP per capita) Peak Dates Total Growth Growth per Year (per capita) (per capita) 1973:4 to 1979:3 11.9% 1.8% 25.0% 1979:3 to 1990:2 2.1% 24.2% 1990:2 to 2000:2 2.2% 10.9% 2000:4 to 2007:4 1.4% 2007:4 to 2017:2* 5.6% 0.6% *Final cycle is incomplete

Household Debt to After-Tax Income (Standard and Adjusted Measure based on Cynamon-Fazzari Review of Income & Wealth, 2015) 180% 160% 140% 120% 100% 80% 60% 40% 20% 0% 1948 1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 2003 2008 2013 Adjusted Debt to Income Ratio Standard Debt to Income Ratio

Weak Household Spending and the Stagnant Recovery (Based on Cynamon-Fazzari Review of Income & Wealth, 2015) Real Household Demand Profiles (Population Adjusted) 130.0 125.0 120.0 115.0 Index Peak=100 110.0 1978-1989 105.0 1989-2000 2000-2006 100.0 2006-2015 95.0 90.0 85.0 80.0 1 2 3 4 5 6 7 8 9 10 11 12 Years Since Peak

Income Inequality and the Economy: The Impact on Workers and Consumers Public Affairs Forum Date: September 13, 2017 Presented by: Steven Fazzari Bert A. and Jeanette L. Lynch Distinguished Professor of Economics at Washington University