Gap between rich and poor widens in the U.S.
Gap between rich, poor widens in U.S.
By HOPE YEN Associated Press
Sept. 28, 2009, 4:15PM
WASHINGTON — The recession has hit middle-income and poor families hardest, widening the economic gap between the richest and poorest Americans as rippling job layoffs ravaged household budgets.
The wealthiest 10 percent of Americans — those making more than $138,000 each year — earned 11.4 times the roughly $12,000 made by those living near or below the poverty line in 2008, according to newly released census figures. That ratio was an increase from 11.2 in 2007 and the previous high of 11.22 in 2003.
Household income declined across all groups, but at sharper percentage levels for middle-income and poor Americans. Median income fell last year from $52,163 to $50,303, wiping out a decade’s worth of gains to hit the lowest level since 1997.
Poverty jumped sharply to 13.2 percent, an 11-year high.
“No one should be surprised at the increased disparity,” said Richard Freeman, an economist at Harvard University. “Unemployment hurts normal workers who do not have the golden parachutes the folks at the top have.”
Analysts attributed the widening gap to the wave of layoffs in the economic downturn that have devastated household budgets. They said while the richest Americans may be seeing reductions in executive pay, those at the bottom of the income ladder are often unemployed and struggling to get by.
Large cities such as Atlanta, Washington, New York, San Francisco, Miami and Chicago had the most inequality, due largely to years of middle-class flight to the suburbs. Declining industrial cities with pockets of well-off neighborhoods, such as Pittsburgh, Cleveland and Buffalo, also had sharp disparities.
Up-and-coming cities with growing middle-class populations, such as Mesa, Ariz., Riverside, Calif., Arlington, Texas, and Henderson, Nev., were among the areas showing the least income differences between rich and poor.
It’s unclear whether income inequality will continue to worsen in major cities, said William H. Frey, a demographer at the Brookings Institution. Many Americans are staying put for now in traditional cities to look for jobs and because of frozen lines of credit.
“During the years of the housing bubble, there was middle-class movement from unaffordable metros with high-income inequality,” Frey said. “Now that the bubble burst, more of the population may be headed back to the high-inequality areas, stemming their middle-class losses.”
Among other findings:
•Income at the top 5 percent of households — those making $180,000 or more — was 3.58 times the median income, the highest since 2006.
•Between 2007 and 2008, income at the 50th percentile (median) and the 10th percentile fell by 3.6 percent and 3.7 percent, respectively, compared with a 2.1 percent decline at the 90th percentile. Between 1999 and 2008, income at the 50th and 10th percentiles decreased 4.3 percent and 9.0 percent, respectively, while income at the 90th percentile was statistically unchanged.
• Plano, Texas, a Dallas suburb, had the highest median income among larger cities, earning $85,003. Cleveland ranked at the bottom, at $26,731.
The findings come as the federal government considers new regulations to rein in executive pay at companies in which it has invested. President Barack Obama also typically cites the need for higher taxes on the wealthy to pay for health care overhaul and other measures, arguing that the wealthy have disproportionately benefited from tax cuts during the Bush administration.
The 2008 figures come from the Current Population Survey and the American Community Survey, which gathers information from 3 million households. The government first began tracking household income in 1967.
Some States Saw Increases in Poverty Even Before Worst of Recession
Thanks TBC, really seems that in a world of plenty there has to be more than enough for all, and more than enough should be enough for anyone...
Some States Saw Increases in Poverty Even Before Worst of Recession
see links to data and analyses below
WASHINGTON, D.C. -- Today's Census Bureau report that 39.1 million Americans lived in poverty in 2008 is a stark reminder of the toll the recession was already taking on families even before the economic picture worsened this year. The data, collected between January 2007 and November 2008, shows that some states were hit hard early by the recession, while in a few states with oil and gas industries, poverty temporarily declined when energy prices rose.
"The number of people living in poverty has almost certainly risen dramatically in every state since this data was collected in 2007 and 2008," said Deborah Weinstein, executive director of the Coalition on Human Needs. "The number of unemployed rose in every state in the country between last August and this August, and food stamp participation also rose in every state between June 2008 and June 2009."
The American Community Survey data released today by the Census Bureau shows that between 2007 and 2008, child poverty in California, Connecticut, Florida, and Indiana, and fell in Alabama, Louisiana, Massachusetts and Nebraska. In twelve states, more than one of every five children lived in poverty, including Alabama, Arizona, Arkansas and D.C., Kentucky, Louisiana, Mississippi, New Mexico, Oklahoma, South Carolina, Tennessee, Texas, and West Virginia.
Today's data also shows that seven states (California, Connecticut, Florida, Hawaii, Indiana, Oregon, and Pennsylvania) had increases in the number and percentage of all people in poverty between 2007 and 2008. http://chn.org/pdf/2009/2008ACStotalpoverty2000-08.pdf
In Michigan, the poverty rate increased, but the number of people in poverty did not show a significant change. In Arizona, Georgia, and South Carolina, the number of people in poverty increased, but the rate was statistically unchanged.
In a fee states, poverty declined - perhaps because these states had economies driven by the oil and gas industry and during the survey period energy prices reached all-time highs. In Alabama, both the number and percentage of people in poverty went down. In Louisiana and Texas, there was a decline in the poverty rate but no significant change in the number of people in poverty. In the rest of the states, poverty rates did not change significantly from 2007 to 2008.
In a family of three, life at the poverty level means trying to provide children with a roof over their heads, adequate health care and a nutritious diet on an annual income of $17,163.
Twenty-one states and the District of Columbia had poverty rates above the national average: Alabama, Arizona, Arkansas, California, Georgia, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Montana, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, South Carolina, Tennessee, Texas and West Virginia.
Unemployment averaged 5.8 percent last year compared with the August rate of 9.7 percent. The Economic Policy Institute estimates that assuming an average unemployment rate of 9.3 percent for 2009, poverty would increase to 14.7 percent. Higher unemployment will hit children disproportionately hard. Their poverty rate is expected to rise from 19 percent in 2008 to 25 percent this years, which translates into one in four children living in poverty.
The huge increase in poverty clearly points out the need for continuing aid to help the unemployed and states struggling to maintain vital services in the face of growing need.
"We need to continue aid to support our fledgling economic recovery so that its full impact can be felt by all Americans.
"If we invest in health care, education, and rebuilding communities, we will create jobs and renew our economy. Failure to act is a moral wrong, since it causes preventable harm to vulnerable people. Inaction is a practical wrong as well, because consigning tens of millions to poverty, with no protections against sickness and debt, drags our economy down and further delays our recovery."
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For a first look fast look at the state poverty data:
Total poverty: http://chn.org/pdf/2009/2008ACStotalpoverty2000-08.pdf
More census poverty stats