| Super Moderator  Join Date: Nov 2005 Location: RI Gender:  Posts: 2,849 Country:  Points: 15,620, Level: 80 | Level up: 54%, 230 Points needed |  |  Unbelievable, but true. The Rich are getting richer and the Poor are getting poorer. And the not so poor are also getting poorer.
Skeptical? Read on for the amazing details! And! You can find out how your state is faring by scrolling down to the link below.
In this wealthy land of ours, the poor are being left ever farther behind. That is the word from the Center on Budget and Policy Priorities and the Economic Policy Institute.
During the two decades before the early 2000's, the average income of this country's poorest families rose by 18.9%. During that same time the average income of our richest families rose . . . nay, exploded by 58.5%.
According to the CBPP study, report, Pulling Apart: A State-by-State Analysis of Income Trends, "In no state did the income gap (degree of income inequality) between middle- and high-income families narrow during this period."
The CBPP study bases income on far more than cash received. As a result, the income of poor people includes the cash value of food stamps, subsidized school lunches, and housing vouchers. Similarly, the income of more wealthy people includes income from capital gains. The study also tries to control for the impact of business cycles by comparing data from 2001-2003 with data from the early 1980s and early 1990s.
The CBPP found:
In 38 states, the incomes of the bottom fifth of families grew more slowly than the incomes of the top fifth of families between the early 1980s and the early 2000s. In these 38 states, the incomes of the richest grew by an average of $45,800 (62 percent), while the incomes of the poorest grew by only $3,000 (21 percent) In other words, the poorest families — who saw an increase in purchasing power of only $143 per year — have not fared nearly as well as the richest families during this period. In only one state — Alaska — did the incomes of the low-income families grow faster than the incomes of the top fifth.
In 39 states, the incomes of the middle fifth of families grew more slowly than the incomes of the top fifth of families between the early 1980s and the early 2000s. In no state did the income gap (degree of income inequality) between middle- and high-income families narrow during this period.
Within the top fifth of families, the wealthiest families enjoyed the highest income growth over the past two decades. In the 11 states that are large enough to permit this calculation, the incomes of the top 5 percent of families rose between 66 percent and 132 percent during this period. This is faster than the income growth among the top fifth of families as a whole in these states — and much faster than the income growth among the bottom fifth of families in these states, which ranged from 11 percent to 24 percent.
The five states with the largest income gap between the top and bottom fifths of families are New York, Texas, Tennessee, Arizona, and Florida. Generally, income gaps are larger in the Southeast and Southwest and smaller in the Midwest, Great Plains, and Mountain states. Income gaps tend to be larger in states where incomes in the bottom fifth are below the national average, and to be smaller in states where incomes in the bottom fifth are above the national average.
The five states with the largest income gaps between the top and middle fifths of families are Texas, Kentucky, Florida, Arizona, and Tennessee.
Does this matter?
OK, so it's no surprise that the rich are getting richer and the poor are getting poorer. Aside from being sad for the poor and nice for the rich, does this matter to the rest of us, and does it matter to the country as a whole?
The CBPP study concludes:
“A fundamental principle of our economic system is that the benefits of economic growth will flow to those responsible for their creation. When how fast your income grows depends on your position in the income scale, this principle is violated. In that sense, today’s unprecedented gap between the growth of the typical family’s income and productivity is our most pressing economic problem.”
. . .
The biggest cause of rising income inequality over the past two decades has been the erosion of wages for the 70 percent of workers with less than a college education. That erosion, in turn, reflects long periods of higher-than-average unemployment, globalization, the shift from manufacturing jobs to low-wage service jobs, immigration, the weakening of unions, and the decline in the minimum wage. More recently, even college-educated workers have experienced real declines in wages, in part because of offshore competition.
While many of these economic factors are largely outside the control of state policymakers, “there’s a lot that states can do to mitigate the effects of increasing inequality,” Elizabeth McNichol, Senior Fellow, Center on Budget and Policy Priorities and co-author of the report noted. Possible steps include raising the state minimum wage, strengthening supports for low-income working families, and reforming the unemployment insurance system. In addition, states can pursue tax policies that partially offset the growing inequality of pre-tax incomes. unbossed.com » Stop the Presses! Rich Get Richer - Poor Getting Poorer! Politics, it seems to me, for years, or all too long, has been concerned with right or left instead of right or wrong. ~Richard Armour
There are many men of principle in both parties in America, but there is no party of principle. ~Alexis de Tocqueville |