Income Inequality

40 Years Of Workers Left Behind (CHART)

Brian Beutler | May 2, 2012, 5:42AM

Economic fairness is one of the persistent themes of the 2012 election, and in that spirit the liberal Economic Policy Institute is revisiting the plight of the U.S. worker over the last several decades.

Many of the institute's findings, which will be presented in greater detail in the forthcoming edition of "The State of Working America," will be familiar to economists who study income inequality. But they provide a stark illustration of the fact that the vast majority of workers have been closed out of the country's gains for nearly 40 years.

Particularly striking is the fact that for years leading up to the 1970s, productivity gains were broadly shared, as theory predicts. Then the linkage abruptly broke. What explains the shift?

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Economy

Why The Economic Recovery Hasn't Felt Like One For The 99 Percent (CHARTS)

Brian Beutler | March 6, 2012, 11:26AM

New data from a renowned economist show what most people in the country have intuitively understood for months: When the recession technically came to an end, it didn't really feel that way unless you were wealthy enough to weather it to begin with.

In his updated report "Striking it Richer," Emmanuel Saez of UC Berekely found that the top one percent in the U.S. hoovered up 93 percent of the income gains in 2010. To break that down, the top one percent enjoyed, on average, income gains of over $100,000 a year from 2009-2010. Everyone else saw their incomes rise, on average, about $80.

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Income Inequality

Will Obama's Economic Policies Really Reduce Income Inequality?

Sahil Kapur | January 16, 2012, 5:33AM

President Barack Obama

One crystallizing theme of President Barack Obama's re-election campaign is his pledge to stem the tide of income inequality. But although hardly any would disagree that he'd be better on the issue than the Republican candidates, experts say it'll take quite a bit more action than he's suggested to really reverse the trend. Some of them even caution that part of the phenomenon is beyond the realm of public policy.

To scale back the problem, Obama wants to raise taxes on high earners to Clinton-era levels, uphold the estate tax, implement health care reform to bolster low-income uninsured people, and implement Wall Street reform so as to limit excessive risk-taking in the financial sector.

But it's far from clear whether these policies, even if fully implemented, will bring about a reversal of the three-decade trend. For instance, even though low- and middle-income Americans improved their standing during the Clinton administration, the gap between the rich and poor continued to grow.

"These trends do tend to be long term, they don't turn on a dime," said Heather Boushey, a senior economist at the liberal Center For American Progress. "If you put in place the right set of policies, you can move in the right direction. I'd like to see that experiment go on."

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Income Inequality

CHARTS: What Romney Doesn't Want You Talking About -- Except In 'Quiet Rooms'

Brian Beutler | January 13, 2012, 5:27AM

Mitt Romney

Too bad for Mitt Romney. Turns out income inequality -- that thing he claims has no place in our political debate, or anywhere outside of "quiet rooms" -- will be a central theme of President Obama's re-election message. We know this because one of his top economic advisers essentially claimed as much in a public address at a top DC think tank on Thursday morning.

And the data he brought to the table suggests Democrats will have an easy time making their case.

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Income Inequality

Krueger's Speech Seals Obama's 2012 Inequality Message

Sahil Kapur | January 12, 2012, 11:15AM

If a speech Thursday morning by one of his top economists is any indication, President Barack Obama is going all in with the 2012 re-election message of stemming the rise in income inequality and reforming a system that's increasingly perceived to be rigged in favor of the rich.

White House Council of Economic Advisers Chairman Alan Krueger rattled off a flurry of statistics illustrating the rise of inequality and its connection to the shrinking middle class. He blamed it on economic policies tilted to favor top earners -- including income tax reforms (presumably during the Bush era) and the "drastic cut in the estate tax."

He also argued that implementation of the Affordable Care Act, which Republicans are eager to repeal, will help reduce the disparities.

It's a message that bore an uncanny resemblance to the "Teddy Roosevelt" speech President Obama delivered in early December, which was interpreted by many as laying out the grounds for his re-election campaign.

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