Re: [OPE-L] Earnings mobility

From: glevy@PRATT.EDU
Date: Fri Jan 27 2006 - 12:18:53 EST

Bill and Ian,
A related story which was posted on 'portside'.
In solidarity, Jerry
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Subject: Rich-Poor Income Gap Growing

Study Finds Rich-Poor Income Gap Growing


January 26, 2006, Associated Press


The disparity between rich and poor is growing in America as
the federal minimum wage has remained flat for years, union
membership has declined and industries have faced global
competition, according to a study released Thursday.

The report by the Center on Budget and Policy Priorities and
the Economic Policy Institute, both liberal-leaning think
tanks, found the incomes of the poorest 20 percent of
families nationally grew by an average of $2,660, or 19
percent, over the past 20 years. Meanwhile, the incomes of
the richest fifth of families grew by $45,100, or nearly 59
percent, the study by the Washington-based groups said.

Families in the middle fifth saw their incomes rise 28
percent, or $10,218.

The figures, based on U.S. Census data, compare the average
growth from 1980-82 to 2001-03, after adjusting for

The poorest one-fifth of families, the report said, had an
average income of $16,780 from 2000-03, while the top fifth
of families had an average income of $122,150 - more than
seven times as much. Middle-income families' average income
was $46,875.

Trudi Renwick, an economist with the union-backed Fiscal
Policy Institute in New York, said globalization, the decline
of manufacturing jobs, the expansion of low-wage service
jobs, immigration and the weakening of unions have hurt those
on the lower end of the economic scale.

In 38 states, the incomes of high-income families grew by a
higher percentage than those of the lowest-income families;
Alaska was the only state in which the reverse was true. The
11 states where the high and low incomes increased at about
the same rate were mostly in the West and Midwest.

The greatest disparity between rich and poor was in New York,
where the top 20 percent of wage earners had average incomes
8.1 times larger than the poorest 20 percent in the early
2000s. Texas had only a slightly smaller gap; Wyoming had the
smallest disparity at a 5.2 to 1 ratio.

Matthew Maguire, a spokesman for the Business Council of New
York state, said the money earned by the state's wealthiest
residents is "something that everybody who cares about New
York should be pleased about."

"New York's wealthy pay huge sums in taxes and those wealthy
people and their taxes make it possible for New York to
provide the nation's most generous social service programs to
less fortunate New Yorkers," he said. "It also reflects the
fact the state is a magnet for immigrants who come from the
four corners of the globe to a state they see as symbol of
economic activity."

Renwick said the government "needs to continue its commitment
to correcting the natural outcomes of the marketplace" by
raising the minimum wage with inflation and by tax policies
like the earned income tax credit.

Renwick also suggested that governments, when giving tax
breaks to companies, insist those companies provide jobs that
pay higher wages.


On the Net:

Economic Policy Institute:

Center on Budget and Policy Priorities:

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