Source: Sam Pizzigati, Apex press, 2006
From the press release:
America's richest 1 percent now holds more wealth -- over $2 trillion more -- than America's entire bottom 90 percent. Might America need a 'maximum wage'?
FDR once thought so, and so does Sam Pizzigati, the veteran labor journalist whose new Greed and Good makes vividly clear why inequality remains our nation's most crushing burden.
Source: Center on Budget and Policy Priorities, April 9, 2008
A state-by-state examination of trends in income inequality over the past two business cycles finds that inequality has grown in most parts of the country since the late 1980s. The incomes of the country's highest-income families have climbed substantially, while middle- and lower-income families have seen only modest increases.
Source: Sunhwa Lee, Lois Shaw, AARP Policy & Research, Pub ID: 2008-03, February 2008
From press release:
Women are nearly twice as likely to be poor as men as they reach pre-retirement and retirement ages, according to a new report by AARP's Public Policy Institute (PPI). The study, titled "From Work To Retirement: Tracking Changes in Women's Poverty Status," found that variables such as marital status, labor force participation, and health status affect the risk of poverty for women as they age.
Women's longer life expectancies play a large role in determining their lifetime financial security. They are more likely to lose a spouse - nearly 40 percent of women 65 and older were unmarried and living alone compared to only 16 percent of men - and they are also more likely to encounter health related problems.
▪ In Brief
▪ Summary
Source: Norma M. Riccucci, Review of Public Personnel Administration, Vol. 28, no. 1, March 2008
(subscription required)
Pay inequities based on gender continue to pervade the public and private sector landscapes. Although Title VII of the Civil Rights Act of 1964 as amended and the Equal Pay Act of 1963 proscribe unequal pay for equal work, the newly formed U.S. Supreme Court has issued a ruling in Ledbetter v. Goodyear Tire & Rubber Company (2007) that ignores Court precedents as well as provisions of the Civil Rights Act of 1991, making it more difficult for employees to file suit for pay inequities. Ultimately, the problem of pay disparities in the workplace can only worsen.
See also:
S. 1843 Fair Pay Restoration Act
From the press release:
Brussels, 6 March 2008: On the eve of International Women's Day, a new ITUC report, the Global Gender Pay Gap reveals that on average, women are paid 16% less than their male counterparts. The report includes detailed analysis of statistics from official sources in 63 countries around the world. Data from an online salary survey covering more than 400,000 workers in 12 countries is also included in the new study.
Source: Gregory D. Squires, Economic Policy Institute, Briefing Paper no. 197, February 28, 2008
From the press release:
The development of a two-tiered system of financial services, driven by the rising economic inequality in the United States, is ushering in a new era of de facto redlining, according to a new paper from the Economic Policy Institute, "Do Subprime Loans Create Subprime Cities? Surging Inequality and the Rise in Predatory Lending."
In the paper, published by EPI as part of its Agenda for Shared Prosperity, author, Gregory D. Squires, a George Washington University sociologist, contends that increasing economic inequality and diminishing access to conventional financial services have become inextricably linked.
Source: Helen Lachs Ginsburg and Gertrude Schaffner Goldberg, New Labor Forum, Vol. 17 no. 1, Spring 2008
With the 2008 election likely to lead to Democratic control of the legislative and executive branches, it is time for a bold new vision of the economy--one that will reduce the increased inequality that has grown in tandem with our national wealth. It is time to take a big step toward shared prosperity. ... The National Jobs for All Coalition is proposing a major program called the Drive for Decent Work. It simultaneously attacks economic inequality and our often unacknowledged but crippling double deficits--the chronic shortfall of decent jobs and the gaping hole in public investment. The Drive for Decent Work is a win-win solution that could put the nation back on the path it started to take after World War II.
Source: Pew Research Center for People and the Press, News release, February 14, 2008
Public views of the U.S. economy, already quite negative, have plummeted since January. Just 17% currently rate the nation's economy as excellent or good, down from 26% last month. The percentage of Americans rating the economy as "poor" has increased even more dramatically, from 28% to 45% in one month.
Since our nation's founding, the promise of economic opportunity has been a central component of the American Dream. And while the Dream remains a unifying tenet for an increasingly diverse society, it may be showing signs of wear. Growing income inequality and slower economic growth suggest that now is an important moment to review the facts about opportunity and mobility in America and to attempt to answer the basic question: Is the American Dream alive and well?
This volume, authored by a team of scholars at the Brookings Institution, is one in a series of major research products that aims to further enlighten the public dialogue on economic opportunity. While it offers reassuring findings in some areas, in many others there is room for concern. By arming the public and policy makers with facts about the status of opportunity in America today, this volume seeks to stimulate and frame the debate about which policies are likely to be most effective in ensuring that the American Dream endures for the next century.
Source: C. Eugene Steuerle, Gillian Reynolds, and Adam Carasso, Economic Mobility Project, February 4, 2008
Today, the Economic Mobility Project released a report on the federal government's investment in economic mobility. The report, authored by C. Eugene Steuerle and Gillian Reynolds of The Urban Institute and Adam Carasso of the New America Foundation, finds that while the federal government makes a significant investment in economic mobility ($746 billion or 5.7 percent of GDP in 2006) the majority of that investment goes to middle and upper income households. Less than one-third (27 percent) of federal mobility spending goes to lower income households. While these households do benefit from many other federal programs, those programs generally are not aimed at promoting mobility and sometimes even discourage it. Between 2006 to 2012, under current law programs targeted to lower income households would decline as a percentage of GDP, while those targeted to the rich would increase over the same period.
Source: Algernon Austin, Economic Policy Institute, EPI Issue Brief #241, January 18, 2008
Recessions hurt. And they hurt the poor and socially marginalized populations the most. As we face the prospect of the second recession of the decade and consider the merits of various stimulus packages, it is useful to examine what a recession would mean for black America.
The late 1990s produced a full employment economy and significant absolute and relative economic gains for blacks. This Issue Brief contrasts the benefits of a national full-employment economy with the harm caused by the 2001 recession and the weak job growth that followed.
This report finds that due to racial bias, people of color are being hit especially hard by the current subprime lending crisis. As homes are foreclosed and families of color find themselves in financial ruin, the racial and economic equality that Martin Luther King, Jr. once envisioned is moving even further out of reach. We found the estimated total loss of wealth for people of color to be between $164 billion and $213 billion for subprime loans taken during the past eight years. This breaks down to losses of between $71 billion and $92 billion for Black/African-American borrowers, and between $75 billion and $98 billion for Latino borrowers for the same period.
Source: Julia Isaacs, Economic Mobility Project, Pew Charitable Trusts, 11/13/2007
"Doing better" than one's parents has long been a key element of the American Dream. The story embedded in our history suggests any person can start from humble beginnings and achieve great wealth, or at least reach the middle class. But are Americans today better off than their own parents were? How much does their eventual success depend on their family background?
Source: Bureau of Labor Statistics, Report 1000, September 2007
In 2006, women who were full-time wage and salary workers had median weekly earnings of $600, or about 81 percent of the $743 median for their male counterparts. This ratio has grown since 1979 (the first year comparable earnings data were available), when women earned about 63 percent as much as men.
Source: Corporation for Enterprise Development, 2007
From the summary:
The 2007-2008 Assets and Opportunity Scorecard contains evidence that even profound and enduring ownership patterns can change and change fast. In the two years since the release of the 2005 Scorecard, median net worth jumped 20% nationwide, while it jumped 68% for women and more than doubled for minorities. Most of these gains have come as a result of increasing homeownership and home values, and are therefore at risk that as interest rates rise and grace periods end, foreclosure rates will also rise. The results underscore the efficacy of housing finance and credit innovation and the need for policing and reigning-in predatory lending.
Yet, the most important message of the 2007-2008 Scorecard, like its two predecessors, is the disparity in asset ownership - and, consequently, economic opportunity--among states, and by race, gender and income.
Source: Steven C. Pitts, UC Berkeley Labor Center, August 2007
From the press release:
A new report by the University of California, Berkeley's Center for Labor Research and Education finds that more than half of black workers in the United States have jobs that don't pay well, provide retirement and health benefits, or offer avenues for advancement.
• The report, "Job Quality and Black Workers: An Examination of the San Francisco Bay Area, Los Angeles, Chicago and New York," analyzes low wage jobs among black workers, using data from the 2000 U.S. Census.
Women have made dramatic economic progress throughout the United States, especially since the 1960s. Yet, women have fared much better in some states than in others, and in no state do women fare as well economically as men. On several indicators, women have experienced important gains in the nearly two decades that the Institute for Women's Policy Research (IWPR) has been tracking these data. For example, women are more likely than men to be employed in managerial or professional jobs and to have health insurance coverage. At the same time, women still earn less, are less likely to have a Bachelor's or professional degree, or to own a business, and are more likely to live in poverty than men across the states. With median annual earnings of $31,800, women employed full-time, year-round in the United States still earn only 77.0 percent of what men earn. Of all civilian women aged 16 and older, only 59.2 percent are in the labor force, compared with 71.8 percent of men.
Source: Joint Economic Committee, press release, August 28, 2007
Follow up to August 28, 2007 posting Census Bureau Reports Household Income Rises, Poverty Rate Declines, see today's press release: "Senator Charles E. Schumer, Chairman of the Joint Economic Committee (JEC) and Rep. Carolyn B. Maloney, Vice Chair of the JEC, today reacted to the U.S. Census Bureau's release of its 2006 report on income, poverty and health insurance coverage in the United States. Although median household income rose slightly in 2006, after adjusting for inflation, the report showed that all but the richest of American households have seen their incomes decline since 2000. The Census Bureau also revealed that while the national poverty rate declined by 0.3% in 2006, the number of people in poverty living in poverty has risen by 4.9 million since 2000, an increase in the poverty rate of one percentage point. Additionally, the number of children under 18 in poverty has skyrocketed under the Bush Administration, rising 10.7 percent in the last 6 years."
The JEC also released three fact sheets taking an in depth look at the findings in the Census Report:
• The Number of Americans without Health Insurance Rose Again in 2006
• Household Income Up Slightly in 2006, but Down Since 2000
• Nearly One in Eight Americans Living in Poverty
From the summary:
In this testimony Burman discusses the issues of tax fairness, the 2001 to 2006 tax cuts, and the individual alternative minimum tax. Burman argues that while the federal tax system mitigates economic inequality, the recent tax cuts have disproportionately benefited those at the top, while also increasing the number of people potentially subject to the AMT. He concludes with a brief discussion of how to fix the AMT in a fiscally responsible manner.
Related articles:
The Effect of the 2001-06 Tax Cuts on After-Tax Incomes
Source: Jason Furman, The Brookings Institution, Testimony Before the U.S. House Committee on Ways and Means, September 6, 2007
Source: Bureau of Labor Statistics, Monthly Labor Review, Vol. 130 nos. 7/8, July/August 2007
Categories: Income Inequality/Gap, Safety & Health, Statistics, Workforce
Articles include: Price highlights, 2006: energy goods retreat, moderating producer prices; Railroad-related work injury fatalities; Earnings by gender: evidence from Census 2000; Labor force status of families: a visual essay.
From the press release:
In a new report by the Economic Policy Institute, the nation's leading think tank on labor market trends, economists Jared Bernstein and Lawrence Mishel analyze the state of working America this Labor Day. Their report, Economy's Gains Fail to Reach Most Workers' Paychecks, shows the latest data on where workers stand and looks behind the numbers to the forces at work in an economy that doesn't seem to be playing by the rules.
From press release:
With leading Presidential candidates turning up the heat on overpaid CEOs, a new report from the Institute for Policy Studies and United for a Fair Economy documents for the first time the extreme pay gaps that have opened up not just between U.S. business leaders and American workers, but between U.S. business leaders and leaders elsewhere in American -- and European -- society. CEOs of large U.S. companies last year averaged $10.8 million in total compensation, over 364 times the pay of the average U.S. worker, a calculation based on data from an Associated Press survey of 386 Fortune 500 companies. The top 20 private equity and hedge fund managers, pocketed an average $657.5 million, Forbes magazine estimates. That's 22,255 times the pay of an average U.S. worker. Workers on the bottom rung of the economy have just received their first federal minimum wage increase in a decade. But the inflation-adjusted value of the new minimum, despite the hike, stands 7 percent below the minimum wage level a decade ago. CEO pay, in that decade, has increased over inflation by roughly 45 percent.
Source: U.S. Census Bureau, CB07-120, August 28, 2007
From the news release:
Real median household income in the United States climbed between 2005 and 2006, reaching $48,200, according to a report released today by the U.S. Census Bureau. This is the second consecutive year that income has risen. Meanwhile, the nation's official poverty rate declined for the first time this decade, from 12.6 percent in 2005 to 12.3 percent in 2006. There were 36.5 million people in poverty in 2006, not statistically different from 2005. The number of people without health insurance coverage rose from 44.8 million (15.3 percent) in 2005 to 47 million (15.8 percent) in 2006. These findings are contained in the Income, Poverty, and Health Insurance Coverage in the United States: 2006 report. The data were compiled from information collected in the 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC). Much more summary material in this news release.
Related from the Census Bureau:
• Numerous Documents and Tables Can Be Accessed Here
• Income, Earnings and Poverty in the United States: 2006
Other related items:
• Number And Percentage Of Americans Who Are Uninsured Climbs Again: Poverty Edges Down But Remains Higher, And Median Income For Working-Age Households Remains Lower, Than When Recession Hit Bottom In 2001
Source: Center on Budget and Policy Priorities, August 28, 2007
• More Americans, Including More Children, Now Lack Health Insurance
Source: Center on Budget and Policy Priorities, August 28, 2007
• U.S. Uninsured Rate Climbs Again
Source: Daniel C. Vock, Stateline.org, August 29, 2007
• Number of Uninsured U.S. Residents Increases by 2.2M to 47M in 2006
Source: Kaiser Daily Health Policy Report, August 29, 2007
Source: University of Michigan, Press release, August 7, 2007
The rich really are getting richer and the poor are getting poorer, a new University of Michigan study shows. The study--the most recent available analysis of long-term wealth trends among U.S. households is based on data from the Panel Study of Income Dynamics, conducted by the U-M Institute for Social Research (ISR) since 1968. Over the last 20 years, the net worth of the top two percentile of American families nearly doubled, from $1,071,000 in 1984 to $2,100,500 in 2005. But the poorest quarter of American families lost ground over the same period, with their 2005 net worth below their 1984 net worth, measured in constant 2005 dollars.
• Data and Documentation
Source: Hugh Price, Amy Liu, Rebecca Sohmer, Brookings Institution, Opportunity 08, August 2007
Middle-class prosperity is the cornerstone of the American Dream. Americans believe that through hard work and education families can enter the middle class and keep on climbing. However, recent evidence shows that, even with a rebounding U.S. economy, working and middle-class families are struggling more than in decades past, and upward economic mobility may not be continuing, even for those who work hard and play by society's rules. Moreover, the road to middle-class prosperity is even rockier for minorities. Several time-honored pathways that lead to the middle class are postsecondary education, good jobs, living in viable neighborhoods, personal financial prudence, and entrepreneurship. This paper focuses on all but the last of these pathways of opportunity.
See also:
Fact Sheet
Source: NOW, PBS, Show 332, Airdate 8-10-2007
In America, the top one-tenth of one percent of earners makes about the same money per year collectively as the millions of Americans in the bottom fifty percent combined. This is putting a tight squeeze on the middle class, while leaving millions of others in the cold. This week, David Brancaccio talks with Pulitzer prize-winning financial reporter David Cay Johnston, as well as author and advocate Beth Shuman about the state of our country's vast income divide and how it's hurting those just trying to make ends meet.
Related stories:
2005 Incomes, on Average, Still Below 2000 Peak
Source: David Cay Johnston, New York Times, August 21, 2007
New IRS Data Pegs Cost of Special Low Tax Rates on Capital Gains
and Dividends at $92 Billion in 2005 Alone -Three-Quarters of the Tax Cuts Went to Best-Off 0.6 Percent
Source: Steve Wamhoff, Citizens for Tax Justice, August 10, 2007
Source: Council 31, American Federation of State, County and Municipal Employees (AFSCME), July 2007
From press release:
Council 31 of the American Federation of State, County and Municipal Employees (AFSCME) have issued a new report documenting low wage levels that keep patient-support staff art Resurrection Health Care hospitals mired in poverty and unable to support their families. Resurrection Health Care (RHC) is the second largest non-profit hospital system in the Chicago metropolitan area. It encompasses eight hospitals, as well as nursing homes, home health services, and outpatient clinics.
Entitled Coming Up Short: Resurrection Health Care’s Distorted Pay Priorities, the report depicts a starkly skewed pay structure in which the compensation of RHC hospital executives significantly exceeds national norms while the meager wages of patient-support staff (housekeepers, laundry and food service workers) fall far short of self-sufficiency standards in the Chicago area.
We document that an increasing fraction of jobs in the U.S. labor market explicitly pay workers for their performance using bonuses, commissions, or piece-rates. We find that compensation in performance-pay jobs is more closely tied to both observed (by the econometrician) and unobserved productive characteristics of workers. Moreover, the growing incidence of performance-pay can explain 24 percent of the growth in the variance of male wages between the late 1970s and the early 1990s, and accounts for nearly all of the top-end growth in wage dispersion (above the 80th percentile).
Source: Frank S. Levy, Peter Temin, MIT Department of Economics Working Paper No. 07-17, May 1, 2007
abstract
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We provide a comprehensive view of widening income inequality in the United States contrasting conditions since 1980 with those in earlier postwar years. We argue that the income distribution in each period was strongly shaped by a set of economic institutions. The early postwar years were dominated by unions, a negotiating framework set in the Treaty of Detroit, progressive taxes, and a high minimum wage - all parts of a general government effort to broadly distribute the gains from growth. More recent years have been characterized by reversals in all these dimensions in an institutional pattern known as the Washington Consensus. Other explanations for income disparities including skill-biased technical change and international trade are seen as factors operating within this broader institutional story.
Source: Olivia Golden, Pamela Winston, Gregory Acs, Ajay Chaudry, Urban Institute, Paper 7, June 12, 2007
This paper for the Charles Stewart Mott Foundation conceptualizes a framework for a new safety net for low-income working families that is rooted in their most essential needs. It is organized around five key goals:
1. enabling parents to meet their family’s needs while working in lower-wage jobs,
2. helping families weather gaps in parental employment,
3. supporting parents’ job advancement,
4. helping parents combine work and child-rearing, and
5. improving children’s well-being and development.
The paper describes these families’ circumstances, discusses gaps in current safety-net programs, and explores possible alternative approaches to meeting families’ most pressing needs.
From press release:
American men have less income than their fathers’ generation did at the same age, according to a new analysis released today by the Economic Mobility Project, an initiative of The Pew Charitable Trusts. Comprised of a Principals’ Group of experts from The American Enterprise Institute, The Brookings Institution, The Heritage Foundation, and The Urban Institute, the project seeks to investigate the health and status of economic mobility in America.
…
According to the report, men who were in their thirties in 1974 had median incomes of about $40,000, while men of the same age in 2004 had median incomes of about $35,000 (adjusted for inflation). Thus, as a group, income for this generation of men is, on average, 12 percent lower than those of their fathers’ generation. While factors other than cash income also contribute to economic mobility, these data challenge the two-century-old presumption that each successive generation will be better off than the one that came before. The findings rely on new analysis of U.S. Census Bureau data.
Source: Ann O’Leary, Berkeley Journal of Employment and Labor Law, Vol. 28 no. 1, 2007
Recent media attention has focused on professional women who have “opted out” of the paid labor market to care for their children. By contrast, the media has paid less attention to low-income women who have been required to “opt in” to the workforce over the past ten years as a result of the nation’s overhaul of the welfare system. As women’s overall workforce participation has increased, low-wage working women have become much less likely to have access to pregnancy and family leave than their professional counterparts. This article examines the historical and legal development of this disparity.
Source: Brian Hindo, Business Week, no. 4039, June 18, 2007
It still isn't easy to find out how you stack up against your colleagues.
You probably know what the guy who sits next to you at work has for lunch every day, how often he calls his wife, how much money he bet on the Astros last weekend, maybe even how much his house is worth. But how much he makes for a living? That's off limits. After all, there is possibly no matter more shrouded in secrecy, nor a riper topic for office gossip, than what everyone gets paid.
When it comes to ensuring decent working conditions for families, the latest research shows many U.S. public policies still lag dramatically behind all high-income countries, as well as many middle- and low-income countries. This report is based on updated and expanded research used in the first Work, Family, and Equity Index: Where Does the United States Stand Globally?, released in 2004.
Source: Aviva Aron-Dine, Center on Budget and Policy Priorities, April 10, 2007
With the income-tax filing deadline approaching and many people focusing on how much they owe in taxes, it may come as a surprise that federal tax burdens for most income groups— and, in particular, for middle-income households — are at their lowest levels in decades, and were low by historical standards even before the 2001 and 2003 tax cuts.
Source: Aviva Aron-Dine, Center on Budget and Policy Priorities, March 29, 2007
In a new study, Thomas Piketty and Emmanuel Saez, economists who have done groundbreaking work on the historical evolution of income inequality in the United States, examine how the progressivity of the federal tax system has changed over time. Unlike previous analyses, theirs examines effective federal tax rates going back to 1960, including income, payroll, corporate, and estate taxes, and provides data for income groups reaching up to the top one-hundredth of one percent (.01 percent) of the population. Several crucial findings emerge from their study.
Source: Joe Connor, Challenge: The Magazine of Economic Affairs, Vol. 50 no. 2, March-April, 2007
(subscription required)
It is hard to find any evidence that tax increases reduce the work-effort of high-income earners, according to this economist. Meantime, traditional families in the lower-income half of our population have been faring badly for most of the past quarter century even without comparing them to the top fifth and especially to the top 5 percent who have done so well. The only good years the traditional family has had in the past twenty-five followed a tax increase in 1993. All those gains have been lost since the tax decrease in 2001.
Source: Steven Pitts, New Labor Forum, Vol. 16 no. 1, Winter 2007
Thirty-five years after the end of the modern civil rights movement and the end of legal segregation, the United States still has a blind spot which renders invisible the impact of institutional racism on black life. In the arena of employment, this blind spot results in the limited view of the job crisis in the Black community - a view which focuses exclusively on unemployment. Just as white supremacy is rarely seen as a constituent aspect of U.S society, the plight of low-wage Black workers is rarely seen. The racism which only sees two segments of Black society - the elite who have made it and the “underclass” who has not - also keeps Blacks who toil in bad jobs in the shadows. This limited view results in a set of policies and programs which are ill equipped to address the complexities surrounding the reality of work facing Black Americans.
Source: Mohamad G. Alkadry and Leslie E. Tower, Public Administration Review, November/December 2006, Vol. 66 no. 6
This essay, reporting on the results of a large-scale nationwide survey of public employees, detects a persistent gender bias in government wages despite applicable antibias statutes, considerable advocacy by interest groups, and alleged social change over the last 30 years. A complex mix of factors contributes to this inequity, including glass ceilings, labor segregation, and shorter job tenure, presumably to fulfill traditional female family roles. So what can be done about such wage disparities based on gender?
For generations, Los Angeles has been known as a place where one could go to achieve the American dream. Not long ago, this dream was easily realized in Los Angeles. California’s most populous county was once a place where jobs brought the middle-class lifestyle within reach of anyone who worked hard. Such jobs formed the foundation of Los Angeles’ prosperity and enabled the county to become one of the most vibrant places in California.
Over the past few decades, however, economic and demographic changes have recast the landscape of the Los Angeles economy. Today, low-wage jobs have replaced many of the jobs that once provided a gateway to a middle-class life. As the county’s labor market has changed, many Los Angeles workers and their families have been left behind. Job growth in Los Angeles has lagged that of the rest of the state, and the gap between the wages earned by workers in Los Angeles and the rest of California has widened considerably. As Los Angeles enters the twenty-first century, its promise of the good life has faded. Workers tend to have lower wages, families tend to have lower incomes, and residents have a higher rate of poverty in Los Angeles than in the rest of the state.