The Great Compression

The Great Compression refers to a significant reduction in income inequality that occurred in the United States and other Western countries from the 1940s to the 1970s. After World War II, economic growth, government policies, and strong labor unions helped lift many workers into the middle class. The wealth gap narrowed as wages rose for low and middle-income earners of all backgrounds. This period was marked by a more equitable distribution of income, contrasting sharply with the rising inequality seen in recent decades. The Great Compression changed social dynamics and influenced economic policies for years to come.