October 14, 2007

Income-Inequality Gap Widens

Income-Inequality Gap Widens - WSJ.com: "The wealthiest 1% of Americans earned 21.2% of all income in 2005, according to new data from the Internal Revenue Service. That is up sharply from 19% in 2004, and surpasses the previous high of 20.8% set in 2000, at the peak of the previous bull market in stocks.
The bottom 50% earned 12.8% of all income, down from 13.4% in 2004 and a bit less than their 13% share in 2000.

• Widening Gap: The wealthiest Americans' share of national income has hit a postwar record, surpassing the highs reached in the 1990s bull market, and highlighting the divergence of economic fortunes blamed for fueling anxiety among American workers.
• Behind the Numbers: Scholars attribute rising inequality to several factors, including technological change that favors those with more skills, and globalization and advances in communications that enlarge the rewards available to "superstar" performers whether in business, sports or entertainment.
• Political Fallout: The data pose a potential challenge for President Bush and the Republican presidential field. They have sought to play up the strength of the economy and low unemployment, and the role of Mr. Bush's tax cuts in both. Democrats may use the data to exploit middle-class angst about stagnant wages."
Bush said that we had always had income inequality and said that renewing NCLB was the answer. Yeah, because it has done such a good job. And of course, Bush is not willing to perhaps question his tax cuts for the rich.

1 comment:

ubub said...

Particularly as the economy demands higher levels of education and technical skills, it would be reasonable to increase financial aid availability to increase the pool of workers with these skills. Credential inflation will likely take place to the point where some of the inequality holds steady but it is still likely to improve absolute if not relative standards of living.