Two think tanks report the booming stock market is widening the income gap between the poorest and richest U.S. families.
The earnings for the poorest fifth of American families rose
less than 1 percent between 1988 and 1998 but jumped 15 percent for
the richest fifth, the Center on Budget and Policy Priorities and
the Economic Policy Institute said in a report issued Tuesday.
Income for the poorest families defined as two or more
relatives living together rose $110 to $12,990 during the 10-year
period. For the richest families it increased by $17,870, to
$137,480, more than 10 times that of the poorest sector, the report
"The benefits of this (economic) growth have not been evenly
distributed," said Elizabeth McNichol, one of the study's authors.
"The incomes of the poor and middle class have fallen or
McNichol attributed the widening gap to Wall Street's
long-running bull market, which favors wealthy investors;
lower-paying service jobs replacing manufacturing jobs; and the
largely stagnant minimum wage.
The gap between rich and poor was widest in New York, with the
poorest fifth earning $10,770, down $1,970, while the wealthiest
group earned $152,350, up $19,680. Income was most evenly
distributed in Utah, where the poorest families had incomes of
$18,170 and the richest $125,930.
The income gap narrowed in just three states Alaska, Louisiana
Stephen Moore, director of social policy for the Cato Institute,
said the study contorted data to put a negative face on a
"The rich are getting richer but the poor are getting richer
too in this expansion," said Moore.
The Center on Budget and Policy Priorities and the Economic
Policy Institute are nonprofit, nonpartisan organizations pushing
for changes in tax laws and other federal policies to benefit
low-and moderate-income families.
The study used before-tax data from the U.S. Census Bureau. The
figures were adjusted for inflation.