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Income Inequality: Still Growing and Harder to Change

Hunger Report Monday
Income Inequality

Graph from EPI's new inequality website shows the extent of income lost by the bottom 90% to the top 10% since the 1970s.

By Derek Schwabe

Nearly half of all income earned in the United States goes to the top 10 percent of wage earners. Our country’s income inequality is among the starkest in the industrialized world.  It’s also getting harder to change.

Since the Occupy Wall Street protests in fall 2011, public attention has been increasingly focused on the question of stagnating wages for everyone except those at the top. In the past six months alone, a number of new books on the topic have appeared, including Timothy Noah’s The Great Divergence and Joseph Stieglitz’s The Price of Inequality. These books attempt to explain how “those at the top have learned how to suck out money from the rest in ways that the rest are hardly aware of.” (Stieglitz) Beyond the concerns of individual authors, government agencies and public policy think tanks have also made the issue a higher priority -- among them, the Congressional Budget Office, Demos, and the Economic Policy Institute (EPI). 

This week, EPI launched a new interactive website, inequality.is, which illustrates how income inequality affects Americans. Users can see where their incomes fall in relation to the rest of the U.S. labor force — and compare what they currently earn with what they would be earning if the profits from economic growth since the 1950s had been more equally shared. The results can be startling and angering.  

Also of great concern are the findings of a recent Brookings Institute study showing that the effects of structural income inequality could be more difficult to reverse than previously though. The damage may even be permanent.  The study reported that the increase in income inequality between 1987 and 2009 was caused more by “permanent” factors, such as technology advances and globalization, than by more “transitory” factors, such as changing job  markets or unemployment. It is increasingly difficult for those in lower income brackets to change their place. In effect, the "American dream" is now further out of reach than it has been in any time since the Great Depression.

In the 2013 Hunger Report, Within Reach: Global Development Goals, income inequality is identified as one of the greatest threats to food security in the United States:

It [income inequality] has been on the rise in the United States since the 1980s and is now at its highest level since before the Great Depression. A high level of inequality means that some communities are trapped in poverty across generations. Statistics on U.S. poverty confirm this. A child born into poverty in the Unites States has a higher chance of being poor as an adult than in almost any other high-income country.

Until our policy makers admit to the growing problem of inequality, and reverse taxation and regulatory policies that favor the super rich, the scandal of U.S. hunger will linger on.

To read more about income inequality and its effects on U.S. poverty and hunger, visit the Hunger Report website at www.hungerreport.org. Derek Profile_003

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