Open in the curiosity app
Social Sciences

Financially Speaking, The Best Time To Be Alive Was During The Great Compression

Financially speaking, the best time and place to live was in the U.S. in the late 1940s–1960s. This time period was riddled with other issues (i.e. racism, sexism, etc.), but it had at least one thing right: the income equality in the United States was higher than at any other point in world history. Directly following the Great Depression, this chunk of time is aptly referred to as the Great Compression. Must've been nice. Things are a whole lot different now.

During the Great Compression, the top 0.1 percent of income earners in the U.S. held just over one percent of the country's wealth. Compare that with 2013, when the same portion held about five percent of the wealth. But that's just the top one-tenth of one percent of the top earners. If you expand that further to the full one percent, they held around 10 percent of the country's wealth during the Great Compression, compared to more than 21 percent in 2013. That's a hair less than the 23.9 percent during the Great Depression. That's right: the top one percent's share more than doubled since the Great Compression. We could keep going, trust us. In the past 30 years, the income gap has been rapidly growing by every major statistical measure. The rich keep getting richer, and the poor keep getting poorer.

So, can we please just do the whole Great Compression thing all over again? Well, not quite. According to a 1992 article in the Quarterly Journal of Economics,"World War II and the National War Labor Board share some credit for the Great Compression, but much was due to an increased demand for unskilled labor when educated labor was greatly expanding." Today, a lot of the nation's unskilled labor is sought overseas. But that's not the only thing to blame. As The Balance reports, we can also blame corporations for prioritizing money over employees, the Federal Reserve whose low interest rates help Wall Street more than potential home buyers, and both the rise in technology and a shifting global economy. It's fair to say that there is no easy solution, and the problem is a lot more complex than it may seem. Learn more about what was so great about the Great Compression in the video below.

The Story Of The Great Compression

Financially speaking, it was the best time and place to be alive.

What If A Modern Day Great Depression Occurred?

Looking at the numbers, it doesn't seem like too crazy of a possibility.

Obama Explains Why Income Inequality has Skyrocketed

The question is on everyone's minds.

Advertisement
Explore Related Subjects
Economics
Life
Social Sciences
Birthdays