The framing in the article is ahistorical. The post-WW2 period was a period of exceptionally _low_ inequality. If you look back to just the 1800s there were swings in inequality comparable to the present day. We're now moving back to the historical baseline.
There are some contributing factors to the shift in inequality, a major one being that labor is now oversupplied compared to the post-war period, and the competition is driving wages lower. The U.S. has much higher immigration rates now, which contributes to the oversupply of labor. The late 1800s and early 1900s had similarly high immigration and high inequality. [1]
Whether the historical baseline for inequality is the best amount of inequality is a different question though. It's clear that as redistribution flattens the income curve there is dead-weight loss as highly productive people stop wasting their time doing taxable work. It's also clear that investing in children who would otherwise be malnourished or lack education or healthcare is a net positive for society. It's not clear to me that the current level of inequality is the wrong one - we're admitting a lot of immigrants who are vastly improving their life prospects as a result, the economy is growing, and technology is amazing. Spending more money on health care would have limited benefits [2]. I don't really have a strong opinion on whether inequality should be higher or lower (it's hard to find a good-faith analysis in these terms), but the Time article uses an arbitrary timeframe and doesn't shed any light on the question.
The concept of a 'historical baseline' is nonsensical. As you extend your timeline, inequality is going to decrease because most human societies have not had the kinds of disparity we measure today. Moreover, we're not beholden to historical norms of any sort. Collective action can change things. It's happened quite a lot historically.
If you insist on a specific citation, check out Ten Thousand Years of Inequality. The editors (whose detailed reasoning I ultimately disagree with) have spent years doing papers on this subject.
I think it's worth considering the post WW2 period as possibly exceptional in the planet's history, and understanding why that may have been, and what can be done policy wise to extend the best parts of it.
It was exceptional for the US because the infrastructure wasn't bombed out and were very well poised to supply goods to a rebuilding Europe. International shipping wasn't efficient enough to outsource the jobs to countries with low wages so there was actual opportunity for the middle class to grow and get ahead.
A Farewell to Alms & Capital in the 21st Century give a lot of insight into this as well.
More importantly - the _low_ inequality was really only in the US. Ever since the beginning of agriculture, the world has grown steadily more unequal. It peaked in the Belle Epoch in France (leading up to WW1), and we've recently sky-rocketed past that level.
Yeah well the 1800s were also a time where people barely traveled 50kms outwards in their whole life and slaves existed so why on earth would we take that as a barometer for anything.
Slaves don't have income. It'd be like asking if monks in a monastery are experiencing "income inequality"—and how much? The question itself is nonsense.
Surely we can agree that zero is not equal to any number greater than zero? On that basis we can easily factor slavery into our inequality calculations.
I think the issue with inequality that bothers many people includes an extra feature, how difficult it is for someone to move between percentiles of wealth. If it were easy to join the top 10% in wealth via intelligence, grit, and hard-work, I doubt many would be bothered by even deeper inequality than the USA currently has. However, if it is both difficult to move up the wealth ladder and highly unequal, it is a recipe for social unrest.
There are some contributing factors to the shift in inequality, a major one being that labor is now oversupplied compared to the post-war period, and the competition is driving wages lower. The U.S. has much higher immigration rates now, which contributes to the oversupply of labor. The late 1800s and early 1900s had similarly high immigration and high inequality. [1]
Whether the historical baseline for inequality is the best amount of inequality is a different question though. It's clear that as redistribution flattens the income curve there is dead-weight loss as highly productive people stop wasting their time doing taxable work. It's also clear that investing in children who would otherwise be malnourished or lack education or healthcare is a net positive for society. It's not clear to me that the current level of inequality is the wrong one - we're admitting a lot of immigrants who are vastly improving their life prospects as a result, the economy is growing, and technology is amazing. Spending more money on health care would have limited benefits [2]. I don't really have a strong opinion on whether inequality should be higher or lower (it's hard to find a good-faith analysis in these terms), but the Time article uses an arbitrary timeframe and doesn't shed any light on the question.
[1] See Ages of Discord for a much more detailed dive into this. http://peterturchin.com/ages-of-discord/
[2] Robin Hanson gives an argument with lots of evidence here: https://www.cato-unbound.org/2007/09/10/robin-hanson/cut-med...