Temporal evolution of the “thermal” and “superthermal” income classes in the USA during 1983–2001

Abstract

Personal income distribution in the USA has a well-defined two-class structure.The majority of population (97-99%) belongs to the lower class characterized by the exponential Boltzmann-Gibbs ("thermal") distribution, whereas the upper class (1-3% of the population) has a Pareto power law ("superthermal") distribution.By analyzing income data for 1983-2001, we show that the "thermal" part is stationary in time, save for a gradual increase of the effective temperature, whereas the "superthermal" tail swells and shrinks following the stock market.We discuss the concept of equilibrium inequality in a society, based on the principle of maximal entropy, and quantitatively show that it applies to the majority of population.