The Great Gatsby Curve

The Great Gatsby is one of those stories everyone can relate to in some way.  These economic and cultural times offer up even more correlations and connections than in past decades.

“The Great Gatsby,” is a novel by F. Scott Fitzgerald and now a movie (again) that highlights the inequality and class distinctions in America during the Roaring 20s.

PNG file - Great Gatsby Curve

It is hard to look at these figures and not be concerned that rising inequality is jeopardizing our tradition of equality of opportunity. The fortunes of one’s parents seem to matter increasingly in American society.

The Great Gatsby Curve was introduced in a speech last year (Jan 2012) by Alan Krueger, Chairman of the Council of Economic Advisors. It illustrates the connection between concentration of wealth in one generation and the ability of those in the next generation to move up the economic ladder compared to their parents. Krueger’s speech

The curve shows that children from poor families are less likely to improve their economic status as adults in countries where income inequality was higher – meaning wealth was concentrated in fewer hands – around the time those children were growing up.

So why does this matter for the United States? The U.S. has had a sharp rise in inequality since the 1980s. In fact, on the eve of the Great Recession, income inequality in the U.S. was as sharp as it had been at any period since the time of “The Great Gatsby.”

It is hard to look at these figures and not be concerned that rising inequality is jeopardizing our tradition of equality of opportunity. The fortunes of one’s parents seem to matter increasingly in American society.  Whitehouse.gov Article

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