Growing Inequality

Matthew Yglesias posts the following graph on his blog, demonstrating the growing disparity between the economy as a while and the medium family income.

And then he adds this:

Whether or not you see this as a problem per se, it’s important to keep these facts in mind when thinking about where the United States stands in the world. For a long time, median income pretty much tracked a measure of per family GDP, so you could rely on the GDP growth rate as a decent proxy for the well-being of the typical family. But since the mid-1980s that relationship hasn’t really stood up. Another country with a lower GDP but less inequality could still be a country in which most people are richer than most Americans, and I believe there’s pretty compelling evidence that that’s now the case in a number of European countries.