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Poor get poorer as recession
threat looms: report
Lisa Lambert
Reuters
Wednesday, April 9, 2008
The gap between rich and poor in many states has broadened at
a quickening pace since the last U.S. recession, which could make
it difficult for low-income families to weather the current economic
downturn, according to a report issued Wednesday.
Since the late 1990's average incomes have declined 2.5 percent
for families on the bottom fifth of the country's economic ladder,
while incomes have increased 9.1 percent for families on the top
fifth, said the report from the liberal-leaning Center on Budget
and Policy Priorities and Economic Policy Institute.
The result is that the average incomes of the top five percent
of families are 12 times the average incomes of the bottom 20
percent.
(Article continues below)
"The report's bottom line is that since the late 1980's
income gaps widened in 37 states and have not narrowed in any
states," said Jared Bernstein, one of the report's authors.
"In fact, we've found that the trend toward growing inequality
has accelerated during this decade."
Meanwhile, the middle class has remained virtually stagnant,
with average incomes growing by just 1.3 percent in nearly eight
years, the report said.
The report drew from 20 years of U.S. Census Bureau data collected
from 1987 through 2006 on post-federal tax changes in real incomes,
and is one of the few to record income inequality on a state-by-state
basis. It did not include capital gains and losses in its calculations.
The technology boom and economic expansion of the late 1990's
put many lower-income families in better positions at the start
of the 2001 economic downturn than they are in now, when many
economists say a downturn has begun, Bernstein said.
Full
article here.
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