Every August, the Census Bureau releases the poverty, income, and earnings data from the American Community Survey. When the research director at my new job caught wind of my data analysis/consulting/math major background, he roped me in to work on analyzing the Census data during my first weeks on the job. I’m glad I got to ease into the new office by doing something that I know how to do, even if it was kind of stressful to turn the report around so quickly.
And, of course, I learned something new. Our report for the Seattle area focused a lot on the gap between the poor and the rich: the 20% of households with the highest incomes took home almost half (48%) of the region’s income last year while the bottom fifth took home only 4%. Sure, I kind of think everyone should make the same amount, but personal views aside, this is still totally outrageous. A gap so wide leads to all kinds of divides, and I really think it’s at the root of so many social problems (unequal opportunities for education, jobs, home ownership; higher incarceration rates among certain groups; health problems).
Our report got some press coverage, and one academic brushed these figures off as nothing new. That seemed weird to me, and for your consideration, I present yet another NY Times article. This isn’t even me taking sides with Obama; I’m just totally fascinated by fiscal policy, and I love it when doing good results in a win for everyone.
In a nutshell, the years when we had Democratic presidents were years of greater growth of the GDP and years when lower-income families experienced faster economic growth than higher-income ones, thereby closing the gap slightly. Meanwhile, the very richest stayed very rich, so I guess all these tax credits people are always making a fuss over might not be a huge deal. (Check the link for “the accompanying table”):
The accompanying table, which is adapted from the book, tells a remarkably consistent story. It shows that when Democrats were in the White House, lower-income families experienced slightly faster income growth than higher-income families — which means that incomes were equalizing. In stark contrast, it also shows much faster income growth for the better-off when Republicans were in the White House — thus widening the gap in income.
The table also shows that families at the 95th percentile fared almost as well under Republican presidents as under Democrats (1.90 percent growth per year, versus 2.12 percent), giving them little stake, economically, in election outcomes. But the stakes were enormous for the less well-to-do. Families at the 20th percentile fared much worse under Republicans than under Democrats (0.43 percent versus 2.64 percent). Eight years of growth at an annual rate of 0.43 percent increases a family’s income by just 3.5 percent, while eight years of growth at 2.64 percent raises it by 23.2 percent.
Not to get all partisan, but perhaps this is something for all those generous Republicans to consider.
