The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies

by Erik Brynjolfsson

A good place to start is median income—the income of the person at the fiftieth percentile of the total distribution. The year 1999 was the peak year for the real (inflation-adjusted) income of the median American household. It reached $54,932 that year, but then started falling. By 2011, it had fallen nearly 10 percent to $50,054, even as overall GDP hit a record high. In particular, wages of unskilled workers in the United States and other advanced countries have trended downward. Meanwhile, for the first time since before the Great Depression, over half the total income in the United States went to the top 10 percent of Americans in 2012. The top 1 percent earned over 22 percent of income, more than doubling their share since the early 1980s. The share of income going to the top hundredth of one percent of Americans, a few thousand people with annual incomes over $11 million, is now at 5.5 percent, after increasing more between 2011 and 2012 than any year since 1927–28.9