Snapshots of income inequality (and SNAP)

The Center on Budget and Policy Priorties has released a very helpful state-by-state analysis of income inequality in the United States. Here is the national picture:

Of course this trend predates the recession, a reflection of the stagnant 'aughts and even further backward in time, as written in the CBPP details (emphasis mine):

The long-standing trend of growing income inequality continued between the late 1990s and the mid-2000s.[1]

    • On average, incomes fell by close to 6 percent among the bottom fifth of households between the late 1990s and the mid-2000s, while rising by 8.6 percent among the top fifth. Incomes grew even faster — 14 percent — among the top 5 percent of households.
    • In 45 states and the District of Columbia, average incomes grew more quickly among the top fifth of households than among the bottom fifth between the late 1990s and the mid-2000s. In no state did the bottom fifth grow significantly faster than the top fifth.

     

Similarly, households in the middle of the income distribution fell further behind upper-income households in most states between the late 1990s and the mid-2000s.

    • On average, incomes grew by just 1.2 percent among the middle fifth of households between the late 1990s and the mid-2000s, well below the 8.6 percent gain among the top fifth. Income disparities between the top and middle fifths increased significantly in 36 states and declined significantly in only one state (New Hampshire).

     

An examination of income trends over a longer period — from the late 1970s to the mid-2000s — shows that inequality increased across the country.

    • In every state plus the District of Columbia, incomes grew faster among the top fifth of households than the bottom fifth. Nationally, the richest fifth of households enjoyed larger average income gains in dollar terms each year ($2,550, after adjusting for inflation) than the poorest fifth experienced during the entire three decades($1,330).
    • Middle-income households also lost ground compared to those at the top. In all 50 states plus the District of Columbia, the income gap between the average middle-income household and the average household in the richest fifth widened significantly over this period.

     

This isn't actually news to me but I've found that those who, in polite company, are sometimes referred to as “disengaged” tend to be more interested in how these macro-trends look closer to home. I was born and raised in the state of Indiana, so I'll include CBPP's infographic on that state:

The Hoosier state is sort of middle-of-the-road in this respect, but it is still striking to note that the average income for households in the poorest fifth dropped by over 23 percent — including almost seven percent since 1970 and the only group to have a net-reduction in income in the state over that time period.

It should go without saying that these trends have implications for public policy. Especially in light of the recently released (PDF) supplemental measure of poverty that shows public policy having a big impact in this area. Via CBPP again:

That SNAP continues to be one of the most effective measures in combating poverty should provide a moment of reflection for those who eager to see the program slashed. I do not share the opinion — popular amongst the groundswell on the right — that views so many Americans receiving nutritional assistance as a cause for moral concern. The average time that an individual utilizes the program is only nine months. It seems fairly simple to me that the program responds to need, and in times of greater need participation increases (PDF):

Instead, perhaps, consider directing your moral indigination at the idea that the program is still effective in spite of the average monthly household benefit only being $287.00. For the state of Indiana that average monthly benefit per person is only $131.66. These are not apocalyptic numbers that predict a imminent downfall of the nation's moral nature or the character of it's citizens. Rather, they reflect the reality of thirty years of increasing inequality, a decade of stagnant income, and a global economic collapse.

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