Thursday, February 10, 2011

Income inequality soars!

Inequality is growing in the United States. In recent decades, the bulk of income growth has gone to the top 10% of families. That was not always the case. Throughout most of the 20th Century, and particularly following World War II when more than 1/3 of all workers were represented by unions, the bottom 90% claimed a much larger share of income growth than they have in recent years.

The chart below from Economic Policy Institutes's’s new interactive State of Working America Web site, compares the distribution of income growth over two periods.

Between 1948 and 1979, a period of strong overall economic growth and productivity in the United States, the richest 10% of families accounted for 33% of average income growth, while the bottom 90% accounted for 67%. The middle class grew and the overall distribution of income was stable for these three decades.

In an extreme contrast, during the most recent economic expansion between 2000 and 2007, the period that led up to the Great Recession, the richest 10% accounted for a full 100% of average income growth. During the same period, average incomes for the bottom 90% of households actually declined.


Anonymous said...

Then you agree with Walker in attempting to reduce the wage gap between those who have and those who have not?

If you earn $110,000 or more, you are in the top 10% of wage earners.

Anonymous said...

Anonymous you're a fool if you think Walker is trying to help working people and expand the middle class by giving them earning power which will fuel production and employment. His tax breaks thus far have been proven to only benefit large Wisconsin businesses (not small and medium) and his relaxation of environmental rules benefit those large contributors who financed his campaign. His war on public employees takes away gains those sectors have won and rightfully deserve. Finally, it's a shame we have a college drop-out who has dissolved or seized the power of several state agencies so that he alone has power over administrative rules and the power of legislative enforcement.

Go ahead and applaud him like a rock star. Take a real look (income distribution, education attainment, etc.)at what happens to states (mostly southern) that enact such policies.

Your narrow view, while it might line your pockets in the short term, makes the state I love resemble an embarrassing backwater.

Anonymous said...


Jerry Brown himself admitted the single greatest mistake he made as Governor back in the 1970′s was his decision to sign legislation allowing public sector workers to unionize. This fact – that Jerry Brown understands how the government bureaucrats, through their unions, have themselves taken over California’s the government, buying our elections, controlling legislation, determining their own compensation – is perhaps the most encouraging thing about Jerry Brown.

I'd rather have a college dropout than another Harvard lawyer. Just look at the last governor and current president. They both make Thompson and Bush look good (and they were not). Oh, that's an opinion, just like your entire post.

Backwater???? Should we be more "Progressive" like California or Illinois? Or more forward looking like New Jersey?

Anonymous said...

Anonymous #1 and #2--

You're missing the point of the income inequality article, and you are mislead by closing the gap between those who have and those who have not.

Few public employees are in the top 10% of earners, and most public employees, given their qualifications, are making less than their counterparts in the private section. To be fair, income foregone by public employees is usually realized in better benefits (pensions, health insurance). Few public employees are making $110,000. Most are making close to $50,000, if that.

Thus, reducing the wage gap is just LOWER the middle-middle class to the level of the lower-middle class. That doesn't seem like the direction we want to go.

The people who are realizing all the wealth are big earners: doctors, CEOs, lawyers, cheif salespersons, and so on. While I won't pretend to know what they should make, they're making 5x to 6x the amount as these state employees. But so far, they are insulated from any talk of reduced wages. In fact, they'll probably get a tax cut.

Anonymous #2 is right though: this state is embarrassing. We have some of the best human, social, and political capital in the country, and it's being wasted on dissolving worker's rights in our state. So what? So a Bass Pro Shop can be built in Green Bay?

Lastly, if taxes rates are so important, why haven't businesses proposed to relocated from Illinois to Wisconsin in droves? Illinois just raised their taxes, but I don't see anyone flocking.

In summary, we don't want to be Kentucky, we don't want to narrow the wage gap if it means making people poorer. Why not raise the minimum wage? Pretty soon Wisconsin will be a brain-drained state, if it isn't already.

Anonymous said...

"Lastly, if taxes rates are so important, why haven't businesses proposed to relocated from Illinois to Wisconsin in droves? Illinois just raised their taxes, but I don't see anyone flocking."

Perhaps you haven't been to Kenosha lately. Look at the businesses that are relocating in the Pleasant Prairie Business park. Most are from Illinois. Did you see that 1,000,000 sq ft building West of I94 and south of hwy 50? Uline, they moved from IL. What's left of the old Evinrude plant is moving up from Waukegan. More are coming.

Anonymous said...

If all these business are coming to Kenosha, shouldn't Wisconsin be expected a windfall in tax revenue and will therefore not need to make all these cuts?