The income gap in America has been widening for decades and the modest three-year recovery did little to change that, according to new Census data.
The new data suggest that despite modest recoveries in many states, the middle class has been shrinking while households have been added in the lowest and highest income brackets.
The state-by-state data compare incomes from a pair of three-year periods: 2007 through 2009, a span that included the Great Recession, and 2010 through 2012, a period that included the ongoing and modest recovery.
For years, the wealthiest 1 percent have amassed income more quickly than the rest. From 1979 through 2007, for example, the top 1 percent of households saw income grow by 275 percent, according to a nonpartisan Congressional Budget Office study.
Compare that to the bottom fifth of households, which saw income gains of only 18 percent over that time. Recent Nobel Prize winner for economics Robert Shiller, who is known for creating a closely tracked home-price index, last month called income inequality “the most important problem that we are facing now today.”
And just last week, President Obama’s nominee to lead the Federal Reserve, Janet Yellen, called income inequality “an extremely difficult and to my mind very worrisome problem.”Wow, wow, wow. Look at what I wrote back on October 29, 2013:
I don't quite agree that "most" people will "rocket" toward the top or drift toward the bottom. I think about 20% of educated, investing Americans -- many employed by the US government, including the military -- will "rocket" toward the top; another 47% will remain among the lower-middle class, lower class, and the "homeless"; another 40% (which we used to call the working middle class) will actually drift toward the bottom.Counter-intuitively, ObamaCare will make the situation worse. The poor won't become any less poor, but the middle-middle class and the lower-middle class will definitely drift lower.
The upper-middle class (the 20% noted above) will disappear ( most will become rich, but not super-rich, who in turn will be different than the hyper-rich). The middle-middle class (the 40% noted above) will drift toward the lower middle class.