Gap Between America’s Rich and Poor Worsened in Past Two Decades

[Omaha Steve]

http://blog.aflcio.org/2008/04/09/gap-between-americas-rich-and-poor-worsened-in-past-two-decades/

by Mike Hall, Apr 9, 2008

The gap between the wealthiest and the rest of us grew significantly during the past two decades, leaving lower- and middle-class families at more risk during the current economic downturn/recession confronting the nation, a new study by the Economic Policy Institute (EPI) and Center on Budget and Policy Priorities (CBPP) finds.

The report says that lower- and middle-income families are much more vulnerable to rough economic times and income loss because they have higher debt loads and are seeing the value of their homes plummet while wealthier families are likely to have savings and other assets to ride out the storm.

In nearly every state in the nation, the rich continue to get richer, the middle class barely treads water and the poor get poorer.

The analysis, Pulling Apart: A State-by-State Analysis of Income Trends, measured and compared income trends among the highest- middle- and lowest-income families from the late 1980s, the late 1990s and the mid 2000s. It found income inequality—now at record levels—began growing more quickly in the 1980s, slowed somewhat in the 1990s and accelerated after 2001, the beginning of the first Bush recession.

The report notes that despite recent years of economic prosperity, lower- and middle-income families have reaped few of the gains. Average incomes for those in the bottom fifth of the income scale fell by 2.5 percent and rose just 1.3 percent for those in the middle fifth. Who did well? The top fifth saw their incomes rise 9 percent.

Jared Bernstein, EPI senior economist and co-author of the report, says:

Before the recent downturn hit, our economy was generating solid income gains. The problem was that high levels of inequality meant these gains failed to reach middle- and low-income families, whose living standards stagnated or even declined. As we head into an economic downturn, these families are ill prepared to weather the storm.

Incomes were calculated using U.S. Census Bureau figures and adjusted for inflation and other factors.

FULL story at link.

[MannyGoldstein]

1. Median Wage Peaked In The Early 70s

Fairly steady downward roll since then.

[leftyclimber]

2. I make less now

than I made when I graduated from college 15 years ago.

Poo.

[Selatius]

3. Median wages completely stagnated in the last several years.

Almost no change whatsoever.

http://www.census.gov/hhes/www/income/histinc/p05ar.html

There is, essentially, an economy-wide wage freeze in effect between 2000 and likely until now.