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Record gap between the richest and poorest in the US, according to Census

Wednesday, September 29th 2010 - 04:27 UTC
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The top 20% received 49.4% of all income generated The top 20% received 49.4% of all income generated

The income gap between the richest and poorest in United States grew last year to the widest amount on record as young adults — and children in particular — struggled to stay afloat in the recession.

The findings were among a broad array of new US Census Bureau data released Tuesday that document the far-reaching impact of a business slump that experts say technically ended in June 2009 — considerably fewer homeowners, people doubling up in housing to save money and a surging demand for food stamps.

The top-earning 20 percent of US citizens, (those making more than $100,000 a year), received 49.4% of all income generated in the United States, compared with the 3.4% earned by those below the poverty line, according to newly released census figures. That ratio of 14.5-to-1 was an increase from 13.6 in 2008 and nearly doubles a low of 7.69 in 1968.

A different measure, the international Gini index, indicated that U.S. income inequality at its highest level since the Census Bureau began tracking household incomes in 1967. The U.S. also has the greatest disparity among Western industrialized nations.

At the top, the wealthiest 5%, who earn more than $180,000, added slightly to their annual incomes last year, census data indicate. Families at the $50,000 median level slipped lower.

“Income inequality is rising, and if we took into account tax data, it would be even more,” said Timothy Smeeding, a University of Wisconsin professor who specializes in poverty. “More than other countries, we have a very unequal income distribution, where compensation goes to the top in a winner-takes-all economy.”

Three states — New York, Connecticut and Texas — and the District of Columbia had the largest gaps in rich and poor, disparities that exceeded the national average. Similar income gaps were evident in large cities such as New York, Miami, Los Angeles, Boston and Atlanta, home to both highly paid financial and high-tech jobs and clusters of poorer immigrant and minority residents.

Categories: Economy, United States.
Tags: poor, rich, US economy.

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