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Economy
In reply to the discussion: Weekend Economists Get Syri-ous August 30-September 2, 2013 [View all]Demeter
(85,373 posts)72. Income Gap Grows Wider (and Faster)
http://www.nytimes.com/2013/09/01/business/income-gap-grows-wider-and-faster.html?partner=yahoofinance&_r=0
INCOME inequality in the United States has been growing for decades, but the trend appears to have accelerated during the Obama administration. One measure of this is the relationship between median and average wages. The median wage is straightforward: its the midpoint of everyones wages. Interpreting the average, though, can be tricky. If the income of a handful of people soars while everyone elses remains the same, the entire groups average may still rise substantially. So when average wages grow faster than the median, as happened from 2009 through 2011, it means that lower earners are falling further behind those at the top.
One way to see the acceleration in inequality is to look at the ratio of average to median annual wages. From 2001 through 2008, during the George W. Bush administration, that ratio grew at 0.28 percentage point per year. From 2009 through 2011, the latest year for which the data is available, the ratio increased 1.14 percentage points annually, or roughly four times faster. The reasons for the widening income gap arent entirely clear. Yes, the nation has had a big recession, but recessions typically tend to lessen inequality rather than increase it.
Were seeing the continued effects of the weak labor market and the long-term trends involving technology and globalization, said Lawrence Katz, an economics professor at Harvard, Our self-inflicted wounds from austerity are also exacerbating things.
Its always possible that the data for 2012 will show a narrowing of the gap, but Professor Katz says he wouldnt count on it.
ANOTHER POINT OF PRIDE FOR THE O MAN.
INCOME inequality in the United States has been growing for decades, but the trend appears to have accelerated during the Obama administration. One measure of this is the relationship between median and average wages. The median wage is straightforward: its the midpoint of everyones wages. Interpreting the average, though, can be tricky. If the income of a handful of people soars while everyone elses remains the same, the entire groups average may still rise substantially. So when average wages grow faster than the median, as happened from 2009 through 2011, it means that lower earners are falling further behind those at the top.
One way to see the acceleration in inequality is to look at the ratio of average to median annual wages. From 2001 through 2008, during the George W. Bush administration, that ratio grew at 0.28 percentage point per year. From 2009 through 2011, the latest year for which the data is available, the ratio increased 1.14 percentage points annually, or roughly four times faster. The reasons for the widening income gap arent entirely clear. Yes, the nation has had a big recession, but recessions typically tend to lessen inequality rather than increase it.
Were seeing the continued effects of the weak labor market and the long-term trends involving technology and globalization, said Lawrence Katz, an economics professor at Harvard, Our self-inflicted wounds from austerity are also exacerbating things.
Its always possible that the data for 2012 will show a narrowing of the gap, but Professor Katz says he wouldnt count on it.
ANOTHER POINT OF PRIDE FOR THE O MAN.
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