In Good Economic Times, Income Growth Of The Upper Income Group Looks Like It Grows Faster Than The Lower Income Group Because There Is No Uppermost Boundary

After the uppermost ten (or one or twenty) percent income group experiences an increase in income, the group remains in the top percent ranking. There is no upper boundary point for those in the top grouping that allows them to move up beyond the group. The top is the top.

In a lower income bracket, an individual wage earner can move up and out of the group's income range. When all or some of those in the bottom ten percent group experience an increase in income, some or all of those individuals do not stay in the bottom ten percent group. They move up, beyond the upper boundary of the low income bracket, into higher income groupings and the lowest income group is replenished keeping the income growth rate of the lowest group low.

In the lowest income group, along with full time wage earners with low annual salaries, there are part-time workers, inexperienced workers and workers who work less than a full year, such as retirees, new graduates, rehired unemployed and other new workforce entrants, who will report less than a full year's earnings and some of whom will earn beginners' salaries. Inequality statistics do not adjust part-time or less than full year wages to full time equivalent, annualized earnings when making inequality comparisons, nor are the statistics adjusted for work experience.

There is a constant workforce replenishment stream of part-time, less than annual wage earners and inexperienced new entrants. Many workers in this replenishment stream are most likely in the lower income groupings. Their lower earnings will replace the rising earnings of the individuals in the lower income groups that move into higher income groups. Their lower earnings will keep the earning's growth rate and the average earnings of the lowest income group low.

When an economy is growing and hiring new entrants as it did for the last 30 to 40 years until the recent recession, companies' hires will include new graduates, inexperienced workers and mid-year new workers. For many, when partial year workers' salaries are full year and when inexperienced workers and new graduates gain experience and job promotions, their incomes will rise and be counted as part of a higher income grouping.

A growing economy over years will capture higher and higher upper income wage earners in its uppermost bracket, while replenishing its lower income brackets with part-time, less than annual salary, inexperienced workers who will keep the average wage and earnings growth of the lower groups low.

A natural effect of a growing economy with new entrants into the workforce is an increase in the inequality measures between the uppermost and lowest income groups. When an economy slows and there are fewer new hires and fewer promotions, there will be less growth in wage inequality.