The Kuznets Curve

In a story about rising inequality in the US - and the fact that domestic workers earn far less now than a hundred years back - this author mentions the Kuznets Curve which graphically describes the "natural forces" of economic equality.

The logic of it goes something like this:

. . . agrarian economies started out very poor but not-so-unequal. Then as they started industrializing, inequality would explode. Because rural productivity is extremely low, early industrialists can earn enormous profits paying highly productive factory workers wages that are only barely above the subsistence-level earnings of the farmers. But the very profitability of this sweatshop industrialism ensures that people will build more and more factories. That creates excess demand for industrial labor, and . . . rising wages and falling inequality.