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Income inequality chart
A report from the Center for Budget and Policy Priorities confirms what has been happening in the realm of income inequality: In most regions of the nation, Americans at the top end of the scale are widening the gap between what they earn and what their fellow citizens at the other end do:
During the recession of 2007 through 2009, households at all income levels, including the wealthiest, saw declines in real income due to widespread job losses and the loss of realized capital gains.  But the incomes of the richest households have begun to grow again while the incomes of those at the bottom and middle continue to stagnate and wide gaps remain between high-income households and poor and middle-income households. [...]

• In the United States as a whole, the poorest fifth of households had an average income of $20,510, while the top fifth had an average income of $164,490—eight times as much.  In 15 states, this top-to-bottom ratio exceeded 8.0. In the late 1970s, in contrast, no state had a top-to-bottom ratio exceeding 8.0.

• The average income of the top 5 percent of households was 13.3 times the average income of the bottom fifth. The states with the largest such gaps were Arizona, New Mexico, California, Georgia, and New York, where the ratio exceeded 15.0.[...]

Similarly, income gaps between high- and middle-income households remain large.
Nationally, the average income of the richest fifth of households was 2.7 times that of the middle fifth.  

• The five states with the largest such gaps are New Mexico, California, Georgia, Mississippi, and Arizona. [...]

• In these 11 large states, the average income of the top 5 percent rose between the late 1970s and mid-2000s by more than $100,000, after adjusting for inflation . (In New Jersey and Massachusetts, the increase exceeded $200,000.) By contrast, the largest increase in average income for the bottom fifth of households in these states was only $5,620. In New York, for example, average incomes grew by $194,000 among the top 5 percent of households but by less than $250 among the bottom fifth of households.

The report's authors also confirm what we know about why this inequality is on the rise: stagnant wages (or only modest growth) on the bottom and middle segments of the scale and big leaps for those on top; high levels of long-term unemployment; government policies that include trade liberalization and deregulation; off-shoring of jobs; failure to maintain the value of the minimum wage; the increase among top earners of investment income and dividends from higher corporate profits.

What should be done about this? CBPP recommends raising and indexing the minimum wage, improving the unemployment insurance system that some states have recently weakened, making state tax systems more progressive instead of more regressive as many started doing in the 1990s, strengthening the safety net.

All these are good ideas as far as they go. But in the aggregate they require a coordinated progressive push in an era when the Right is spending much of its time calculating how to dismantle and otherwise ruin the programs of the New Deal and Great Society. When we should be innovating new programs, we're stuck fighting to hang onto the still-needed old ones, and some of the elected folks who should be on our team ain't. In fact, we're not getting much fresh conversation on the subject at all.

As Beverly Gage wrote earlier this year, a century ago there wasn't tepidness in discussing income inequality. Indeed, a Republican president in his last months in office established the Commission on Industrial Relations to investigate the conditions of labor throughout the country. Motivated partly by fear that revolt might arise from the inequalities, the CIR's report, when issued in 1916, answered a resounding "No!" to the question “Have the workers received a fair share of the enormous increase in wealth which has taken place in this country?"

Ultimately, the report providing the foundation for two things: an inheritance tax and support for union organizing. As Gage notes, we're going the opposite direction these days.

But today’s lawmakers could do worse than to follow the Industrial Commission’s broader example of democratic debate. The national conversation about inequality is already underway. The least they could do is listen.
Indeed. First step? Getting those who say they are on our team to open their ears.

Originally posted to Daily Kos on Fri Nov 23, 2012 at 10:40 AM PST.

Also republished by Income Inequality Kos.

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Comment Preferences

  •  The Reagan Revolution of the privileged as they (8+ / 0-)

    help themselves to more and more of the pie, and now they hold the knife.

    “The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.” ~ John Kenneth Galbraith

    by Lefty Coaster on Fri Nov 23, 2012 at 10:45:49 AM PST

  •  you have to wonder where those trend lines (5+ / 0-)

    end...

    It can't be sustainable, but then again, it is a chilling thought to consider that maybe it really is, or at least for much longer than anyone could imagine.  Wealth is power, and that is a lot of power concentrated in fewer and fewer hands.

    Oregon: Sure...it's cold. But it's a damp cold.

    by Keith930 on Fri Nov 23, 2012 at 10:48:01 AM PST

  •  If anyone in the beltway had a clue about (8+ / 0-)

    how many hang by the fingernails on the bottom of the economic ladder or what a constant unhappy struggle that entails, they might at least pretend to be servants of the people. Since they don't and appear to believe underlings are here to serve them while they swing through this most recent gilded age, serious trouble is bound to be the result.
    The outset of Occupy was only a grumble; there's a roar out there.

  •  On the graph (3+ / 0-)
    Recommended by:
    jck, Pilgrim X, opinionated

    Its interesting to note how inequality grew fastest during the Clinton years when offshoreing became standard practice for US corporations.

    “The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.” ~ John Kenneth Galbraith

    by Lefty Coaster on Fri Nov 23, 2012 at 10:56:21 AM PST

    •  Chart shows the poor also profited (0+ / 0-)

      Just not as much. That doesn't make sense if their jobs were outsourced: that the poor got richer!

      Something must be wrong with this chart.

    •  Repeal of Glass Steagall (3+ / 0-)
      Recommended by:
      tardis10, Eric Nelson, Lefty Coaster

      I suspect that might have had more to do with it.

      "...you can’t find any oxygen from outside the aircraft to get in the aircraft, because the windows don’t open. I don’t know why they don’t do that. It’s a real problem." Mitt Romney

      by Catte Nappe on Fri Nov 23, 2012 at 11:36:40 AM PST

      [ Parent ]

      •  Clinton's slashing of Dividends &Capital Gains tax (1+ / 0-)
        Recommended by:
        Catte Nappe

        that were even more generous than Dubya Bush's also played a big role.

        “The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.” ~ John Kenneth Galbraith

        by Lefty Coaster on Fri Nov 23, 2012 at 01:17:38 PM PST

        [ Parent ]

      •  Yep. Part of a corporate blueprint to dominate.. (4+ / 0-)

        ..democracy that was taking off in the 1970's.
        The Lewis Powell Memo

        Forty years ago today, on August 23, 1971, Justice Lewis F. Powell, Jr., an attorney from Richmond, Virginia, drafted a confidential memorandum for the U.S. Chamber of Commerce that describes a strategy for the corporate takeover of the dominant public institutions of American society.

        Powell and his friend Eugene Sydnor, then-chairman of the Chamber’s education committee, believed the Chamber had to transform itself from a passive business group into a powerful political force capable of taking on what Powell described as a major ongoing “attack on the American free enterprise system.”

        The Organizations on the team:
        Historian Kim Phillips-Fein describes how “many who read the memo cited it afterward as inspiration for their political choices.” In fact, Powell’s Memo is widely credited for having helped catalyze a new business activist movement, with numerous conservative family and corporate foundations (e.g. Coors, Olin, Bradley, Scaife, Koch and others) thereafter creating and sustaining powerful new voices to help push the corporate agenda, including
         • the Business Roundtable (1972),
         • the American Legislative Exchange Council (ALEC - 1973),
         • Heritage Foundation (1973),
         • the Cato Institute (1977),
         • the Manhattan Institute (1978),
         • Citizens for a Sound Economy (1984 - now Americans for Prosperity),
         • Accuracy in Academe (1985), and others.
        Including: The long demise of Glass-Steagall
        •  He did do a pretty thorough job, didn't he? (2+ / 0-)
          Recommended by:
          Eric Nelson, kaliope

          Underestimated the importance radio would prove to play, but still...

          Take the core goal, and you can always adapt to the changing media landscape. (At least until things like blogs, FB, Twitter and other "people powered printing presses" allow us peons to gum up the works.)

          Reaching the public generally may be more important for the shorter term. The first essential is to establish the staffs of eminent scholars, writers and speakers, who will do the thinking, the analysis, the writing and the speaking. It will also be essential to have staff personnel who are thoroughly familiar with the media, and how most effectively to communicate with the public.

          "...you can’t find any oxygen from outside the aircraft to get in the aircraft, because the windows don’t open. I don’t know why they don’t do that. It’s a real problem." Mitt Romney

          by Catte Nappe on Fri Nov 23, 2012 at 02:38:06 PM PST

          [ Parent ]

  •  The bottom 5th (0+ / 0-)

    Is it reasonable to assume that the bottom 5th are on some kind of government  assistance to make ends meet?

    Why than the assumption that that the bottom 5th real income should increase?

    Under the assumption that the real income of the bottom 5 was sufficient to sustain life liberty etc decades ago, if their real income did not increase they should still be in that good place.

    Yes I agree it is obviously silly that the top 1% er's etc got the vast majority of the wealth gains. The middle class which saw a massive increase in productivity should certainly be party to the bulk of the wealth increase.

    •  Why assume what you seem to assume? (2+ / 0-)
      Recommended by:
      tardis10, kaliope

      It's OK for the bottom 2 or 3 fifths to maintain staus quo subsistence (with govt. assistance required for the lowest 5th to barely "make ends meet"); but the top fifth does better, and better and better and BETTER and EVEN BETTER year after year?

      "...you can’t find any oxygen from outside the aircraft to get in the aircraft, because the windows don’t open. I don’t know why they don’t do that. It’s a real problem." Mitt Romney

      by Catte Nappe on Fri Nov 23, 2012 at 12:12:31 PM PST

      [ Parent ]

  •  The plutocrats won't give up willingly. (2+ / 0-)
    Recommended by:
    grayday101, kaliope

    We need to convince the public to force them to at the ballot box. Otherwise it will end as it usually does; in smoking rubble.

  •  This is the essence (4+ / 0-)

    of what I call the 21st Century Social Crisis.  Not only the growing inequality and impoverishment of the working classes, but even more importantly, our disempowerment.  The ideological and political disarmament of the working classes and the political and ideological hegemony of exactly those forces dedicated to our disempowerment and impoverishment.  That this order is hegemonic means quite precisely that there is no solution to this problem within the system as it exists.

    Ever get the feeling you've been cheated?

    by ActivistGuy on Fri Nov 23, 2012 at 11:09:48 AM PST

    •  Return to the Golden Years (3+ / 0-)
      Recommended by:
      howd, Joe Hill PDX, Eric Nelson

      Reinstate the tax chart from the fifties.

      Tax the rich at 80-90%, it will let a little gas out of their balloon, in return everybody else will get a lift.
      Why? Because the rich will not get to sit on the huge piles of cash, it will return to the economic cycle.

      •  Simple Reason Is the Lowering of Top Tax Rates (0+ / 0-)

        Yeah, it is interesting to read all the analysis as to why there is this huge income inequality when in fact the reason is really pretty simple, the lowering of tax rates on the top income brackets.   Look at the graphs, the income inequality begins to take off in 1980 when  Reagan lowered the top rates.

        However, I would not call for "taxing the rich" but rather "taxing excessive income".  We all have the same tax rates, it just that some of us take more money.  Here is a word of advice to the rich who complain about having to pay higher taxes, if you don't want to pay the high tax rates, don't take all the money for yourself.  

         

        Poor man wants to be rich. Rich man wants to king. And the king ain't satisifed until he rules everything. B.Springsteen

        by howd on Fri Nov 23, 2012 at 11:54:24 AM PST

        [ Parent ]

  •  How so? (1+ / 2-)
    Recommended by:
    Utahrd
    Hidden by:
    Glen The Plumber, tardis10

    Do you think by making the top five percent and the top fifth poorer, then everyone else will be richer?

    Do you believe the economy is a zero-sum game, that no wealth is created, only distributed?

  •  Increase in the number of workers w/o higher ed? (0+ / 0-)

    California and Arizona have seen increases in the numbers of workers with a high school education or less.

    No, Britney Spears should not be making all that money.

    But if there are lots of people who can do the same job you can, someone might underbid you for it.

  •  So a "rising tide lifts all boats"... (2+ / 0-)
    Recommended by:
    Gooserock, Catte Nappe

    ...If that tide is made of the wreckage of the boats of the middle class.

    Can we spend some money on showing our citizens how the "trickle down theory" is a failed experiment?

  •  An ear (and eye) opener (4+ / 0-)
    Recommended by:
    tardis10, Pilgrim X, Eric Nelson, kaliope

    Recently I recorded a PBS Independent Lens documentary Park Avenue: Money, Power and the American Dream, and finally had an opportunity to watch it yesterday (a pretty good selection for Thanksgiving Day as it turned out).

    Academy Award-winning filmmaker Alex Gibney (Taxi to the Dark Side, Enron: The Smartest Guys in the Room) presents his take on the gap between rich and poor Americans in Park Avenue: Money, Power and the American Dream. Gibney contends that America’s richest citizens have “rigged the game in their favor,” and created unprecedented inequality in the United States.
    Gibney states that while income disparity has always existed in the U.S., it has accelerated sharply over the last 40 years. As of 2010, the 400 richest Americans controlled more wealth than the bottom 50 percent of the populace — 150 million people. In the film, Gibney explains why he believes upward mobility is increasingly out of reach for the poor.
    I highly recommend it. Don't know how it is being scheduled on other PBS stations, but mine will be re-airing it next Thursday morning, so theirs still time to capture it if you missed it.  As a bonus, there are transcripts of many of the interviews:
    Jack Abramoff (PDF, 139KB)
    Bruce Bartlett (PDF, 221KB)
    Colin & April Dunkley (PDF, 106KB)
    Michael Gross (PDF, 299KB)
    Jacob Hacker (PDF, 246KB)
    Bob Kaiser (PDF, 106KB)
    Jane Mayer (PDF, 139KB)
    Timothy Noah (PDF, 176KB)
    Tim Phillips (PDF, 246KB)
    Paul Piff (PDF, 164KB)
    Anne Rueth (PDF, 156KB)
    Jeffery Sachs (PDF, 156KB)
    Tim Smeeding (PDF, 233KB)
    Karen Treadwell (PDF, 86KB)
    Jennifer - Waukesha Food Pantry (PDF, 74KB)
    Melissa - Waukesha Food Pantry (PDF, 57KB)
    They did note at the end that the Kochs and others declined opportunity to be interviewed. What a surprise - not.

    "...you can’t find any oxygen from outside the aircraft to get in the aircraft, because the windows don’t open. I don’t know why they don’t do that. It’s a real problem." Mitt Romney

    by Catte Nappe on Fri Nov 23, 2012 at 11:15:27 AM PST

  •  Gains Concentrated at Very Top (3+ / 0-)
    Recommended by:
    tardis10, Catte Nappe, Eric Nelson

    My spouse and I bill by our time at any hourly rate as basically programmers for hire. The last time we raised our rates was six years ago. We don't see any indication that we are going to be able to raise our rates anytime soon. In the mean time the cost of everything in our business and personal lives has gone up which means our real household income has been steadily going down.

    Ironically because our income has held fairly steady over the last few years while the average has gone down due to high unemployment and depressed wages, we have moved ever upward on the scale of median household income. Back in the 90's when we made about double what we do today we were in the top 20% of incomes but today we are in the top 18% of household incomes even though we have a fraction of the buying power we use to have.

    While I realize we are still doing pretty good in the scheme of things, it shows that even people at the top 20% are not doing very well compared to those at the very top. These days a household income of 90k puts you in the top 20% and I expect most of the people who make that are concentrated in the parts of the country with very high costs of living. I bet if incomes were balanced to include data about the cost of living by region actual real wages would be quite a bit lower.

  •  FIRST Step is STOP supporting the DLC Third Way (0+ / 0-)

    New Dem sell outs in charge of the Democratic Party - and, from what I've seen during the last 4 years of complete f'king cowardice, we little people need to STOP supporting the "leaders" of Non Democratic Party orgs who are kow towing to the latest sell outs and capitulations from the Clinton-Obama cliques ...

    now that the Lessor of Two Evils election is over.

    Of course, what will happen is that lots and lots of Dems will sign the vapid petitions and make the pointless phone calls and send the sternly worded letters into the void, when

    Unless you're helping a new Alan Grayson get elected,

    you're supporting the f'kers who've lied to us and who've sold us out, election after election, and who will continue to sell us out cuz we NEVER hold them accountable.

    See Rhinna & Eminem in "Love The Way You Lie" for kind of a model of what we're constantly asked to do.

    At least in Eminem's song about sick-0 psycho-0 relationships, the attractions are mutual and the destruction is mutual - too many Dem peeee-ons are committed to being attracted to abusers who don't even like the peee-ons, except to use as Charmin, and, who NEVER suffer for being abusers!

    18 Months to "Lessor Of Two Evil"

    rmm.

    Yond Cassius has a lean and hungry look; He thinks too much: such men are dangerous

    by seabos84 on Fri Nov 23, 2012 at 11:39:09 AM PST

  •  Trade (0+ / 0-)

    There's nothing for it unless we stop exporting wealth-producing jobs. To do that, we need to address the deficit that matters--the trade deficit.

    International minimum wage and uniform tariffs.

    I won't bore you yet again with the details.

  •  Unless you get the economy churning nothing will (0+ / 0-)

    change.

    This is not really surprising.  The wealthiest quintile got hit harder than most at the height of the recession, but then bounced right back and are doing better than ever - especially when compared to other segments.  What would you expect in an economy growing 1% per year?

    I realize the local dKos sport is to bash the rich as the cause of this income inequality.  but think about it.. The top 5th have an average income of $165,000.  That's rich?  That doesn't even hit President Obama's criteria for being "wealthy".  That's a married couple teaching school.  That's a single professional in New York City.

    But tax that wealth and you don't even have enough to pay for the services we are currently  providing with borrowing, much less redistribute it to the lower income levels!

    While some folks would feel better getting those wealthy down to the level of the poorer levels, it really doesn't lift those poorer levels up.  There isn't enough to redistribute.  There just isn't.

    Yes.. let's make things a bit more equitable.  But those top 20% are already paying most of the income taxes in this country.

    The only real way to lift the bottom tiers is to grow the economy.  Period.

    Put 10 million of the 30 million out of work back on a job making $30k plus.  Put all the 30 million back and you've grown the economy by a trillion dollars.

    •  The recession doesn't explain it (1+ / 0-)
      Recommended by:
      tardis10

      Those lines on the graph show a strong divide starting in the 70's, and taking off to extremes in the '90s. There were times in there when the economy was booming, but that didn't lift the bottom tiers. That's the old "rising tide lifts all boats" concept, and obviously a bunch of boats didn't get lifted.

      "...you can’t find any oxygen from outside the aircraft to get in the aircraft, because the windows don’t open. I don’t know why they don’t do that. It’s a real problem." Mitt Romney

      by Catte Nappe on Fri Nov 23, 2012 at 12:27:44 PM PST

      [ Parent ]

  •  Limit the deductibility of executive compensation (1+ / 0-)
    Recommended by:
    Eric Nelson

    Back when I lived in Minnesota, my representative, Martin Sabo, proposed a bill that would have limited deductions of corporate salaries to a multiple of the lowers paid employees.  It is time for someone to reintroduce that bill  Why should we subsidize greater income inequality with lost tax revenue?

  •  I'm just here to bitch that the legend (1+ / 0-)
    Recommended by:
    Catte Nappe

    on the right side of the graph is in reverse order, and it's really fucking annoyingly needlessly complicating.

    Graphs, people!  Do them RIGHT.

  •  First step? Getting those who say they are on.. (3+ / 0-)
    Recommended by:
    Catte Nappe, tardis10, wsexson

    ..our team to open their ears.
    Like Ways and Means Committee Ranking Member Sander Levin (D-MI, is doing - Nov 2, 2012 - (major Kudos to him on this!)
    Levin is trying to unearth another important report the republicans (with Mitch McConnell at the helm) successfully buried,

    Ways and Means Committee Ranking Member Sander Levin (D-MI) today sent a letter to Congressional Research Service Director Mary B. Mazanec requesting information about what led CRS to withdraw a September report that found no correlation between tax cuts and economic growth. According to a New York Times report, and confirmed by the office of Ranking Member Levin, Senate Republicans complained directly to CRS about the report, which was subsequently pulled from its Web site. The report’s findings undermined the age-old Republican argument – pushed again this year as part of the GOP’s tax plan – that tax cuts will pay for themselves through economic growth. A copy of the letter is here, and below: - emphasis added
    Excerpt of Levin's letter:
    ..I was deeply disturbed to hear that Mr. Hungerford’s report was taken down in response to political pressure from Congressional Republicans who had ideological objections to the report’s factual findings and conclusion.  It would be completely inappropriate for CRS to censor one of its analysts simply because participants in the political process found his or her conclusion in conflict with their partisan position.

    I would like your explanation as to why this report was removed from the CRS website,..

    This is so important that we force the republicans to come clean stop this decades old lie, so we get get to the true policy solutions we need to enact.
  •  That graph, very powerful (0+ / 0-)

    Astonishing to see how the good years under Clinton, how insignificant the goodness is for those under $50,000 so to speak, especially compared to gains those earning over $100,000 have been making.

    Breadcrumbs really, so pitiful and it just makes me sad

    "They have tried to sell us this trickle-down, tax-cut fairy dust before. And guess what? It does not work. It didn't work then, it won't work now." --Barack Obama

    by lizah on Fri Nov 23, 2012 at 02:06:56 PM PST

  •  someone help me understand why Progressive bastion (0+ / 0-)

    California is on this list, please?

    •  According to the specific state data (0+ / 0-)

      You can see it here  the rich in California got much, much richer. For comparison, I'm in Texas, and the rich got richer, but not as much as in California. At the same time, Texas poorest got much poorer, California's poor got no worse.

      And is California still a progressive bastion? It used to seem to be, but these days it seems less so.

      "...you can’t find any oxygen from outside the aircraft to get in the aircraft, because the windows don’t open. I don’t know why they don’t do that. It’s a real problem." Mitt Romney

      by Catte Nappe on Fri Nov 23, 2012 at 02:55:35 PM PST

      [ Parent ]

  •  Is government the problem? (0+ / 0-)

    The rise in income inequality parallels a similar rise in government spending as a percentage of GDP, regulations, and absolute government spending.

    Hence, you have a huge amount of national wealth in the form of tax and regulatory powers invested in the hands of roughly a President, 100 Senators, and 435 Representatives.

    Moreover, corrupt corporations and special interests that have a seat at the table in the form of lobbyists can easily steer money and preferential tax and regulatory policy in their direction at the expense of Main Street when power is isolated in Washington.

    Never in history have so few, controlled so much, with less accountability, and given to those less deserving as our government has in the last 50 years.

    What has all the trillions in borrowing, spending, and redistributing gone?

    Just saying.

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