But inequality is rising in most developed countries, literally upending the Kuznets curve

The Kuznets Curve, named after Nobel Laureate Simon Kuznets, predicts that as nations become wealthier, inequality initially rises and then declines, like a single squeeze of an accordion.

The OECD considers several reasons why this might be, including: increases in more people working part-time; increases in investment-based income among richer households; and even rich folks marrying each other and doubling up on wealth accumulated at the top.

Almost everywhere there was growth at the bottom. But incomes at the top grew more quickly than incomes at the bottom. In effect, the rich were pulling away.

People who can handle the new technology on which most production is based are increasingly in demand and in many cases such brain (as opposed to brawn) workers are already well paid, so paying them even more only widens the income gap.

Across the OECD, the number of households with only one head has risen from 15% to 20% of the total. In calculating households’ real income, the statisticians try to factor in the economies of scale families enjoy. (Kids are cheaper by the dozen, yes, but also by twos and threes.) If more families are smaller and therefore not enjoying such economies of scale, more are going to be poorer.

income inequality is not a useful measure. Measures of inequality tell us nothing about the living conditions of the poor, their health and their access to economic opportunity.

one should think primarily about lifting developing countries out of poverty rather than about reducing income disparities in wealthy countries.

Focusing on income inequality rather than drivers of poverty, obstacles to economic opportunity and systematic injustice obscures what really works and what does not in the realm of economic policy

And the income gap between richer and poorer areas is likely to widen further as government-spending cuts disproportionately hurt less prosperous parts.

In several places regional disparities have worsened over time. Start with America. Between 2007 and 2009 real GDP per head in the five richest states actually rose by an average of 2%, but fell by 3% in the five poorest.

But studies suggest that differences in productivity are far more important than differences in joblessness in explaining regional income gaps. This implies that governments also need to focus on improving education and skills in poorer areas. In Mississippi only 19% of those aged 25 or over have a degree, compared with 36% in Connecticut or 48% in the District of Columbia.

In terms of wealth rather than income, the top 1 percent control 40 percent. Their lot in life has improved considerably. Twenty-five years ago, the corresponding figures were 12 percent and 33 percent.

While the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall. For men with only high-school degrees, the decline has been precipitous—12 percent in the last quarter-century alone.

The justification they came up with was called “marginal-productivity theory.” In a nutshell, this theory associated higher incomes with higher productivity and a greater contribution to society.