Tags: Income | inequality | gap | rich

CNNMoney: The Income Gap May Be Dragging the US Economy Down

By    |   Friday, 27 September 2013 08:27 AM

Income inequality is more than a fairness issue — it harms the foundations of society, leading to shorter lifespans, substandard education and declining growth as more people cannot participate in the consumption that drives the economy, CNNMoney reported.

Leslie McCall, a sociology and political science professor at Northwestern University, said research shows two-thirds of Americans are lamenting the inequality, but there is no majority opinion on what to do about it.

Raising taxes on the well-to-do, making unions stronger, raising the minimum wage or providing more jobs training are among the myriad ideas.

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"It's not clear that raising taxes will produce what people want — which is better jobs and more pay," McCall told CNNMoney.

The median wage earner in America took home 9 percent less in 2012 than in 1999.

The fairness issue aside, CNNMoney said there is now evidence rich people are increasingly living longer than poor people. According to the Department of Health & Human Services, in the 1980s, wealthy Americans lived 2.8 years longer than the poor, but by the late 1990s, they were living 4.5 years longer.

The Russell Sage Foundation estimated that in the 1960s, 5 percent of the poor went to college while 35 percent of the wealthy did, CNNMoney reported. By 1980, the gap had grown even wider — 8 percent of poor people went to college then, compared with 55 percent of wealthier people.

CNNMoney said some economists have drawn a straight line from the current weak economic recovery to a widening income gap in America.

"Our middle class is too weak to support the consumer spending that has historically driven our economic growth," wrote Joseph Stiglitz, a Columbia University professor and Nobel Prize-winning economist.

The Huffington Post cited Congressional Budget Office figures that showed between 1979 and 2007, the top 1 percent of American earners enjoyed skyrocketing income growth of 275 percent, while Americans at the bottom fifth of the income scale saw growth of less than 20 percent.

By one analysis, the incomes of the bottom 90 percent of Americans, adjusted for inflation, grew by $59 between 1966 and 2011, while the average income for the top 10 percent jumped by $116,071 during the same time period, the Post reported.

The Los Angeles Times reported a new study by Emmanuel Saez, an economics professor at the University of California, Berkeley, concluded that in the past four years the wealthiest Americans have managed to "rake in 95 percent of all income gains" in the United States.

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Economy
Income inequality is more than a fairness issue — it harms the foundations of society, leading to shorter lifespans, substandard education and declining growth as more people cannot participate in the consumption that drives the economy, CNNMoney reported.
Income,inequality,gap,rich
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2013-27-27
Friday, 27 September 2013 08:27 AM
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