New Data Shows Sharp Spike in US Income Inequality

The CBO report, “Trends in the Distribution of Household Income Between 1979 and 2007”, found that

After-tax income for the highest-income households grew more than it did for any other group. (After-tax income is income after federal taxes have been deducted and government transfers—which are payments to people through such programs as Social Security and Unemployment Insurance—have been added.)

CBO finds that, between 1979 and 2007, income grew by:

  • 275 percent for the top 1 percent of households,
  • 65 percent for the next 19 percent,
  • Just under 40 percent for the next 60 percent, and
  • 18 percent for the bottom 20 percent.

The share of income going to higher-income households rose, while the share going to lower-income households fell.

  • The top fifth of the population saw a 10-percentage-point increase in their share of after-tax income.
  • Most of that growth went to the top 1 percent of the population.
  • All other groups saw their shares decline by 2 to 3 percentage points.
  • New data from both the US Census’ American Community Survey likewise documents widening income gaps among Americans. As UW Geography Professor Mark Ellis explains, “The Census has just released what at first read through seems like a good summary report on income inequality at national, state, metro, and census tract scales from American Community Survey Data.  Although it does not break out the ratio of income of the top 1% to the median (i.e. the summary income measure of the 99%)  it does compute useful income percentile comparisons (90/10, 95/20) and gini coefficients for different geographies.  Interesting but not very surprising findings about where inequality is greatest in the US WA and Seattle have below inequality below US average. Great data and maps”.

    Census Report Summary: The National Picture

    Each year, the Census Bureau publishes an estimate of national income inequality from the Current Population Survey Annual Social and Economic Supplement (CPS ASEC; the latest is DeNavas-Walt et al. 2010). According to analysis of that survey (which has been measuring income inequality since 1947) by Jones and Weinberg 2000 (see also Weinberg 1996), “between 1967 (when income data for households first became available) and 1992, the shape of the household income distribution changed dramatically. This 25-year period was one of increasing household income inequality—as evidenced by several measures.” Subdividing that period, and using the Gini index as the measure, Jones and Weinberg observed that “household income inequality was generally stable between 1967 and 1980.” However, they go on to note that “In contrast to the . . . Gini measures, . . . percentile measures . . . suggest that household income inequality increased from 1967 to 1980 . . . .The 95/20 ratio . . . increased from 1967 to 1980, while the 90/10 ratio . . . declined.” Despite the ambiguity in the 1967–1980 period, they conclude “it is clear that the household income distribution became increasingly unequal beginning in 1981.” Their study ended with 1998 data, but the Census Bureau statistics continue to show increases in inequality since then. The Gini coefficient for household income in 2009 was 0.468, higher than for 1998 (0.456).4

    How the ‘Battle in Seattle’ led to a Global Health Mecca

    The Washington Global Health Alliance and the City of Seattle’s Office of Economic Development has published a new report describing our region’s growing global health industry. Called the 2011 Global Health Strategic Mapping and Economic Opportunity Portfolio, the report identifies local organizations working in global health, the number of jobs, types of projects overseas and business opportunities. Some key findings:

    • Respondent’s organizations have 2,503 projects and initiatives in 156 countries.
    • In Washington, 2,979 people work in global health. Outside of the state, these 59 organizations support an additional 17,275 employees.
    • Washington has particular expertise in infectious & chronic disease and developing technologies & devices.
    • Washington global health organizations surveyed collaborate with 1,574 partners, located in 111 countries across the world.

    UW Geography Professor Matt Sparke has received recent press and  blogosphere attention with his essay on how Seattle’s reincarnation as a global health epicenter relates to its previous reputation as a center for the global justice movement after the anti-WTO protests of 1999:

    Many people at the time thought the 1999 WTO protests marked a significant turning point, against the neo-liberal agenda in globalization. The ‘Spirit of Seattle’ became the rallying cry for those who opposed the market fundamentalism mindset of the time.

    But, today, another global Seattle being built, says Sparke. Neither the promoters of market competition nor the collaborative proponents of global justice have gone away, but in the aftermath of their now-famous standoff, a third and arguably “curative” rethinking of the city is taking shape: a re-visioning of Seattle as a world center of global health philanthropy and other private-sector treatments for the mismatch between global markets and global justice.

    As cited in the influential global health blog Humanosphere, Sparke argues that “The Gates Foundation is basically addressing the same global challenges that the protesters were. But they are doing it in a way that’s much more comfortable with and friendly to the traditional neo-liberal market-based approach.” In his chapter on “Global Geographies” in the department’s recent publication, Seattle Geographies, Sparke also warns of the “commodified” and “corporatized” vision of global health, “taking us back to the age-old competitive concern about promoting Seattle as a global health market leader”:

    The co-optation of global health for selling the city in the old game of global boosterism will seem for many a bitter pill to swallow. But if the historical geography of Seattle’s ongoing remaking as a global city tells us anything, it is that the definition of civic citizenship is always in flux, always being contested, and always, therefore, up for grabs….Global soul is not always for sale, and this city reminds us that there is going to be a battle for it–an ongoing Battle of Seattle over the meaning of world class.

    How the ‘Battle in Seattle’ led to a global health epicenter | Humanosphere.