Wealthiest Americans Get Richer as Income Gap Widens
The gap between the richest and poorest Americans continues to widen, according to a new report from the.
It analyzes tax data going back to 1917 and shows that, since the 1970s, the majority of Americans have taken home an ever smaller portion of the nation’s overall wealth.
The richest 1 percent of Americans now makes, on average, 26 times what the other 99 percent of people in the country earn annually, says Mark Price, a labor economist at the Keystone Research Center and one of the report’s authors.
“When incomes are growing much faster at the top, that means the total pot of income available in society is concentrating in a smaller and smaller group of people’s hands,” Price states.
Price says a major factor contributing to the trend is the minimum wage, which is shrinking. The federal minimum wage hasn’t been raised since 2009 and, adjusted for inflation, it’s now worth less than it was in the 1960s.
Price notes the U.S. economy is looking better by some measures, such as a lower unemployment rate in recent years. He says as companies compete for people to fill jobs, they’d normally be offering higher wages, but that isn’t happening, and the trend concerns many economists.
“We’re often quite surprised unemployment is as low as it is, and we’re seeing very little wage growth,” Price states.
The report says declining union enrollment and policies that weaken workers’ bargaining rights are also contributing to inequality.
Price expects these trends to continue in the near future. He says the Trump administration’s tax plan, which gives the bulk of tax breaks to wealthier people, could continue to exacerbate the divide.
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