In the chart above, we see that a steady increase in the Gini coefficient, the most common measure of income inequality in the U.S., begins to take place for both households (blue line) and families (red line) in 1970 after bottoming in the late 1960s. Meanwhile, we see that income inequality among individual American income earners has been essentially flat during for more than 50 years since 1961 (green line).

That observation is significant because if income inequality in the United States was really rising as a result of economic factors that concentrate an increasing amount of income into progressively fewer hands, we would not observe this outcome because income payments are made to individuals, not to households and not to families. That basic reality means that a rising level of economically-driven income inequality would be most prominently evident among the distribution of income for individuals as measured by the Gini coefficient if it were actually taking place – just like it did in the post-World War 2 recovery years from 1947 through 1960.

We do however observe such a rising trend in measured income inequality in the Gini coefficients calculated for U.S. households and for U.S. families. Interestingly, we don’t see much of that change occurring when economic factors were actually driving up the level of income inequality among individual American income earners in the years from 1947 through 1960. Instead, we see that the overall trend for household and family inequality was basically flat during this time, which then continued through the 1960s. It’s not until 1970 that we find that a rising trend in the amount of income inequality for U.S. households and families begin to take hold.

The only way that can happen is if the composition of U.S. households changed so that they consisted of greater numbers of lower income earning households and families. In this case, the change was driven by an increasing number of single person households, and specifically by an increasing number of single person households consisting of women over the Age of 65.

Bottom Line: The combination of a flat Gini coefficient index for individual income inequality for more than 50 years along with rising Gini coefficients for US households and families means that social, rather than economic factors, are responsible for the most frequently reported rise in income inequality for households and families.