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This Chart Shows How Rich People Make Their Money Totally Differently From Everyone Else

Dec 15, 2013, 23:19 IST

Last night, Justin Wolfers Tweeted a chart from Visualizing Economics' Catherine Mulbrandon showing Lorenz curves by income source: labor, capital, business and capital gains.

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It basically shows that different parts of the population get their income way differently than others - and that the top 20% gets at least half of all income types.

Here's what we're looking at:

Labor:

  • The bottom 60% of the population has access to about 25% of all income generated through labor
  • The next 20% gets it's own slice of about 25% of labor income
  • And the top 20% of the population owns 50% of labor income

Next up is business and capital, which have about the same curve shape:

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  • The "bottom" 80% of the population has to fight over 20% of income generated through business and capital
  • The top 20% of the population enjoys the "remaining" 80% of business and capital income
  • The top 20% of the population owns about 95% of income generated through capital gains
  • 80% of the population gets the rest

Here's the chart:

Visualizing Economics

What's even scarier is that this data is from 2007 CBO data- the Great Recession is likely to have made these curves even steeper.

We are living in a highly unequal society.

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