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.
All other groups saw their shares decline by 2 to 3 percentage points.
- 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.
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
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.
A recent Wall Street Journal article on how US corporations are adjusting to a shrinking middle class, Ellen Byron writes:
In the wake of the worst recession in 50 years, there’s little doubt that the American middle class—the 40% of households with annual incomes between $50,000 and $140,000 a year—is in distress. Even before the recession, incomes of American middle-class families weren’t keeping up with inflation, especially with the rising costs of what are considered the essential ingredients of middle-class life—college education, health care and housing. In 2009, the income of the median family, the one smack in the middle of the middle, was lower, adjusted for inflation, than in 1998, the Census Bureau says.
The slumping stock market and collapse in housing prices have also hit middle-class Americans. At the end of March, Americans had $6.1 trillion in equity in their houses—the value of the house minus mortgages—half the 2006 level, according to the Federal Reserve. Economist Edward Wolff of New York University estimates that the net worth—household assets minus debts—of the middle fifth of American households grew by 2.4% a year between 2001 and 2007 and plunged by 26.2% in the following two years.
To monitor the evolving American consumer market, P&G executives study the Gini index, a widely accepted measure of income inequality that ranges from zero, when everyone earns the same amount, to one, when all income goes to only one person. In 2009, the most recent calculation available, the Gini coefficient totaled 0.468, a 20% rise in income disparity over the past 40 years, according to the U.S. Census Bureau.
“We now have a Gini index similar to the Philippines and Mexico—you’d never have imagined that,” says Phyllis Jackson, P&G’s vice president of consumer market knowledge for North America. “I don’t think we’ve typically thought about America as a country with big income gaps to this extent.”
Over the past two years, P&G has accelerated its research, product-development and marketing approach to target the newly divided American market.
Commenting on corporate responses to widening US income inequality, Chrystia Freeland recently remarked in The New York Times:
We know one thing for sure: the gap between rich and poor in the United States has widened in the past 30 years. In 2007 the top 1 percent of earners took home 18.3 percent of national income — that is more than two and a half times their level in 1973, when their share was 7.7 percent. Those at the top haven’t enjoyed such a big slice of the national pie since 1929. The middle-class dominated nation that the Greatest Generation inhabited has become as polarized as the plutocracies of Latin America or as America itself was during its fevered Gilded Age.
The 2008 financial crisis and the prolonged economic downturn has eviscerated the consumption defense as ruthlessly as it has burst the credit bubble that allowed the middle class to feel richer than it was. Income inequality is today a fact of life, as essential to doing business as the rate of inflation: Proctor & Gamble executives study the Gini co-efficient, a technical measure of income inequality, to divine what is happening to their erstwhile middle-class consumer base, and have decided the best strategy is to give up on the center and to market instead to the top and the bottom.
Citigroup advises investors to design their portfolios around income inequality. It calls this strategy the “Consumer Hourglass Portfolio” and has created an index of companies that serve the rich and the poor while avoiding the vanishing middle.
Once income inequality has become a tool for marketing executives and stock pickers it becomes pretty hard to deny. But we can still argue over what is causing it.
Income also continues to dip in Washington state, according to a Sept. 22 Seattle Times article
Household income — in Washington state and across the country — declined in 2010, while the percentage of people living in poverty increased, as did the numbers of people without health insurance, according to data being released Thursday by the Census Bureau.
Results from the American Community Survey, successor to the census long form, detail a troubled economy, showing a downward trend that began in 2008 or earlier has continued or worsened in many larger cities and counties.
Children have been particularly affected. In Washington state last year, 13.4 percent of the overall population, including 18.2 percent of those under 18, were in households with incomes below the national poverty level.
Another sign of tough times for kids: Statewide, more than 47 percent of single mothers with children under 5 were living in poverty.
The percentage of Washington residents without health insurance rose from 13.4 percent to 14.2 percent last year. And the percentage of state households receiving food stamps rose from 11.1 percent in 2009 to 13.3 percent last year.
The survey showed Washington’s median income fell 3.1 percent in 2010 to $55,631, after a 1.8 percent drop the previous year.
Of the 19 Washington counties in the report, King County had the highest median income in 2010, at $66,174. But that was nearly a 4 percent drop from its median income in 2009.
Lewis County, in the southwest part of the state, had the lowest median income of the Washington counties reported, at $38,643 — more than a 10 percent drop from 2009.
Among those same counties, Yakima County had the highest percentage of residents under the poverty level in 2010, 24.3 percent, while Island County had the lowest, 9.4 percent.
via As Middle Class Shrinks, P&G Marketing Aims High and Low – WSJ.com.
Winnie Hu’s recent NY Times article, “Geography Report Card Finds Students Lagging” (July 20, 2011) laments the fact that fewer than in one in three American students are proficient in geography–to the point where they can’t even identify the American Southwest on a map, according to report of the National Assessment of Educational Progress.
The article is rich in irony, quoting Penn State’s Roger Downs, that “geography’s role in the curriculum is limited, and, at best, static.”
That is ironic given the convincing case that can be made for the importance of geographic literacy,” Mr. Downs said. “But it is doubly ironic given a world in which adults and now children have smartphones and tablets that can download maps on the fly, provide directions to places, and give your location to your friends.
The article also cites the concerns of David P. Drsicoll, the National Assessment Governing Board chair:
“Geography is not just about maps,” said Driscoll…who expressed concern that students were not doing better in geography. “It is a rich and varied discipline that, now more than ever, is vital to understanding the connections between our global economy, environment and diverse cultures.”
Geography Report Card Finds Students Lagging – NYTimes.com.