Income Inequality: The Rich Get Richer

A fascinating series of recent Tim Noah articles in Slate graphically convey the growing US income gap:

It’s generally understood that we live in a time of growing income inequality, but “the ordinary person is not really aware of how big it is,” Krugman told me. During the late 1980s and the late 1990s, the United States experienced two unprecedentedly long periods of sustained economic growth—the “seven fat years” and the ” long boom.” Yet from 1980 to 2005, more than 80 percent of total increase in Americans’ income went to the top 1 percent. Economic growth was more sluggish in the aughts, but the decade saw productivity increase by about 20 percent. Yet virtually none of the increase translated into wage growth at middle and lower incomes, an outcome that left many economists scratching their heads.

Did the Stinking Rich create the Great Divergence? (1) – By Timothy Noah – Slate Magazine.

See also Bob Herbert’s 9/14 NY Times column, “A Recovery’s Long Odds.” Herbert cites Robert Reich’s new book, “Aftershock,” to the effect that the main lesson of to the Great Depression of the 1930s is:

when the distribution of income gets too far out of whack, the economy needs to be reorganized so the broad middle class has enough buying power to rejuvenate the economy over the long term

Reinforcing this theme of growing incoming gaps is the Sept. 16 NY Times article:

Poverty Rate Rose Sharply in 2009, Says Census Bureau

By ERIK ECKHOLM

Forty-four million people in the United States, or one in seven residents, lived in poverty in 2009, an increase of 4 million from the year before, the Census Bureau reported on Thursday.

The poverty rate climbed to 14.3 percent — the highest since 1994 — from 13.2 percent in 2008. The rise was steepest for children, with one in five residents under 18 living below the official poverty line, the bureau said.

The report provides the most detailed picture yet of the impact of the recession and unemployment on incomes, especially at the bottom of the scale. It also found that the temporary increases in benefits in last year’s stimulus bill eased the burdens on millions of families.

For a single adult in 2009, the poverty line was $10,830 in pretax cash income; for a family of four, $22,050.

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