The Rising Tide That Lifted Only The Biggest Boats

The Stanford Center on Poverty and Inequality released a new report on Poverty and Inequality in the US that documents trends across seven key domains (poverty, labor market, safety net, income inequality, wealth inequality, and health inequality) and evaluates how the country is faring in its efforts to address poverty and inequality.

The report's assessment is rather grim: "If an overall assessment is to be had, it is that the country’s economy and labor market remain in deep disrepair, whereas our various post-market institutions (e.g., the safety net, educational institutions, health institutions) have a mixed record of coping with the rising poverty and inequality that has been handed to them by a still-struggling economy and labor market."

In particular, the report shows that there has been a "nearly relentless" growth in inequality over the last 30 years.


Jeffrey Thompson and Timothy Smeeding, who analyzed the effects of the Great Recession on trends in inequality for the report, explain: "The share of income received by the bottom three quintiles of the distribution declined between 2007 and 2010 by at least 10 percent; the fourth quintile barely held its own; and the share of the top quintile continued to rise. The largest declines during this period were experienced at the bottom of the distribution: the share of the lowest-income quintile fell from 3.8 percent to 3.4 percent, and the share of the second quintile fell from 9.5 percent to 9.2 percent. In 2009-10 the bottom three quintiles reached all-time lows. The fourth quintile showed little change, but the top quintile share rose from 48.5 to 49.2 percent of total income in 2010. The shifting income shares in the Great Recession, mainly due to job losses that most dramatically damaged income at the bottom of the distribution, accelerated long-term trends that have been unfolding since the 1980s."

These data raise questions about the validity of trickle-down economics arguments and the sustainability of an economic model that continues to concentrate wealth into fewer and fewer hands.

Read more:
http://www.huffingtonpost.com/2014/02/06/rich-richer_n_4731408.html?1391697358&ncid=edlinkusaolp00000008
http://www.stanford.edu/group/scspi/sotu/SOTU_2014_CPI.pdf
http://www.huffingtonpost.com/2013/05/28/income-inequality-study_n_3346073.html
http://www.nber.org/papers/w19075

TeachingwithData.org resources:
Income Inequality in the US (http://www.teachingwithdata.org/resource/3182)
An Analysis of Earnings (http://www.teachingwithdata.org/resource/3159)
NYT Interactive: What Percent Are You? (http://www.teachingwithdata.org/resource/3913)
Recession Trends (http://www.teachingwithdata.org/resource/3067)
Frederique Laubepin

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