TWO-CLASS STRUCTURE OF INCOME DISTRIBUTION IN THE USA: EXPONENTIAL BULK AND POWER-LAW TAIL

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 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.