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(Medical-NewsWire.com, November 29, 2012 ) San Francisco, CA -- Income inequality is becoming a huge problem in the United States, and may become a long term issue when it comes to the well-being of our country.
The Center on Budget and Policy Priorities and the Economic Policy Institute have reported that the disparity between rich and poor is growing quickly along with the gap between the rich and the middle-class.
The joint report entitled “Pulling Apart: A State-by-State Analysis of Income Trends,” reads:
“Over the past three business cycles prior to 2007, the incomes of the country’s highest-income households climbed substantially, while middle and lower-income households saw only modest increases.
“During the recession of 2007 through 2009, households at all income levels, including the wealthiest, saw declines in real income due to widespread job losses and the loss of realized capital gains. The incomes of the richest households have begun to grow again while the incomes of those at the bottom and middle continue to stagnate and wide gaps remain between high-income households and poor and middle-income households saw only modest increase.”
The average income of the least well-off fifth of all households in the nation was $20,510, while the wealthiest fifth is $164,490.
According to the report, “On average incomes fell by close to 6% among the bottom fifth of households between the late 1990’s and the mid-2000’s, while rising 8.6% among the top fifth.”
“Incomes grew even faster at 14% among the top 5% of households. A similar gap existed been top earners and middle-class households. On average, incomes grew by just 1.2% among the middle fifth of households between the late 1990’s and the mid-2000’s, well below the 8.6% 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.)”
The report also explains that there is a widening problem at the state level, most notably in New Mexico where the bottom fifth made an average of $16,319 while the top fifth averaged $161,162. With many other states close behind New Mexico, the state problem of income inequality may be even more egregious than the overall inequality of the country.
The report points to the inactivity of low income pay combined with the increase in high income pay as the reason for the widening gap.
The report reads:
“The erosion weakness of wage growth for workers at the bottom and middle of the income scale reflects a variety of factors. Over the last 30 years, the nation has seen increasingly long periods of high unemployment, more intense competition from foreign firms, a shift in the mix of jobs from manufacturing to services, and advances in technology that have changed jobs. The share of workers in unions also fell significantly.”
At the same time, the share of the workforce made up of households headed by women, which tend to have lower incomes, has increased. Government policies such as the failure to maintain the real value of the minimum wage and to adequately fund supports for low-wage workers as well as changes to the tax code that favored the wealthy have also contributed to growing wage inequality.”
In order to decrease the gap, the report authors suggested raising the minimum wage, improving unemployment insurance, and making state taxing more progressive.
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Source: EmailWire.Com
Source: EmailWire.com
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