Fyi...and the poor continues to get poorer



The man who has no imagination has no wings. 
Muhammad Ali


Rodney D. Coates
Professor


-----Original Message-----

US Income Gap Widens as Poor Take Hit in Recession

By HOPE YEN, Associated Press Writer 
Mon Sep 28, 3:46 pm ET
http://news.yahoo.com/s/ap/20090928/ap_on_go_ot/us_census_income_gap

WASHINGTON - The recession has hit middle-income and
poor families hardest, widening the economic gap
between the richest and poorest Americans as rippling
job layoffs ravaged household budgets.

The wealthiest 10 percent of Americans - those making
more than $138,000 each year - earned 11.4 times the
roughly $12,000 made by those living near or below the
poverty line in 2008, according to newly released
census figures. That ratio was an increase from 11.2 in
2007 and the previous high of 11.22 in 2003.

Household income declined across all groups, but at
sharper percentage levels for middle-income and poor
Americans. Median income fell last year from $52,163 to
$50,303, wiping out a decade's worth of gains to hit
the lowest level since 1997.

Poverty jumped sharply to 13.2 percent, an 11-year
high.

"No one should be surprised at the increased
disparity," said Richard Freeman, an economist at
Harvard University. "Unemployment hurts normal workers
who do not have the golden parachutes the folks at the
top have."

Analysts attributed the widening gap to the wave of
layoffs in the economic downturn that have devastated
household budgets. They said while the richest
Americans may be seeing reductions in executive pay,
those at the bottom of the income ladder are often
unemployed and struggling to get by.

Large cities such as Atlanta, Washington, New York, San
Francisco, Miami and Chicago had the most inequality,
due largely to years of middle-class flight to the
suburbs. Declining industrial cities with pockets of
well-off neighborhoods, such as Pittsburgh, Cleveland
and Buffalo, also had sharp disparities.

Up-and-coming cities with growing middle-class
populations, such as Mesa, Ariz., Riverside, Calif.,
Arlington, Texas, and Henderson, Nev., were among the
areas showing the least income differences between rich
and poor.

It's unclear whether income inequality will continue to
worsen in major cities, said William H. Frey, a
demographer at the Brookings Institution. Many
Americans are staying put for now in traditional cities
to look for jobs and because of frozen lines of credit.

"During the years of the housing bubble, there was
middle-class movement from unaffordable metros with
high-income inequality," Frey said. "Now that the
bubble burst, more of the population may be headed back
to the high-inequality areas, stemming their middle-
class losses."

Among other findings:

_Income at the top 5 percent of households - those
making $180,000 or more - was 3.58 times the median
income, the highest since 2006.

_Between 2007 and 2008, income at the 50th percentile
(median) and the 10th percentile fell by 3.6 percent
and 3.7 percent, respectively, compared with a 2.1
percent decline at the 90th percentile. Between 1999
and 2008, income at the 50th and 10th percentiles
decreased 4.3 percent and 9.0 percent, respectively,
while income at the 90th percentile was statistically
unchanged.

_Plano, Texas, a Dallas suburb, had the highest median
income among larger cities, earning $85,003. Cleveland
ranked at the bottom, at $26,731.

The findings come as the federal government considers
new regulations to rein in executive pay at companies
in which it has invested. President Barack Obama also
typically cites the need for higher taxes on the
wealthy to pay for health care overhaul and other
measures, arguing that the wealthy have
disproportionately benefited from tax cuts during the
Bush administration.

The 2008 figures come from the Current Population
Survey and the American Community Survey, which gathers
information from 3 million households. The government
first began tracking household income in 1967.

___

Associated Press writer Frank Bass contributed to this
report.

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