The Wealth Gap
The Graph of the Week is the ratio of Compensation as a percent of wealth, and GDP as a percent of wealth, a measurement of the wealth gap.
The graph comes from the article by John Tatom "Is Inequality Growing as AmericanWorkers Fall Behind?" an article in the January 2008 issue of Business Economics, released this week.
Webb and others argue that workers are not keeping up with the wealthy, which is a key reason that inequality is rising. They focus on the ratio of wages to overall wealth, or what they call the “wealth gap.” Figure 3 shows that employee compensation as a percentage of wealth has been falling recently and has been falling since the 1970s, except in the early part of this decade (1Q2000-3Q2002) when the stock market correction boosted the ratio.
NABE members can download the article here.