Recession increases US income gap

We talk often of how the global reces­sion has hurt the poor­est coun­tries the hard­est, but an arti­cle we found today exam­ines how the reces­sion has hurt the poor­est Amer­i­cans the hard­est. The many job lay­offs that took place through­out the reces­sion has hurt low to mid­dle income Amer­i­cans, while the wealth­i­est Amer­i­cans only had reduc­tions in pay or benefits.

The US Cen­sus Bureau says that the income gap between the poor­est and rich­est Amer­i­cans is now at it’s widest ever. Income gap from coun­try to coun­try is impor­tant to con­sider because the wider a gap is, the harder it is for the poor­est to climb up the income ladder.

From this Asso­ci­ated Press arti­cle that we found at the Sun News, writer Hope Yen takes another angle at the Cen­sus Bureau numbers.

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, N.Y., also had sharp disparities.

This article is from Poverty News Blog: http://feedproxy.google.com/~r/blogspot/EOch/~3/SerQv_vF9kU/recession-increases-us-income-gap.html




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