Income inequality growing nationally

from the Dayton Daily News

By William Hershey

COLUMBUS — In Ohio and across the country, the rich are getting richer at a much faster pace than middle and lower-income families are making income gains.

Over the past two decades, the average income for the top 5 percent of Ohio families jumped by 34 percent, from $129,848 to $174,026, according to a study released Wednesday, April 9.

During the same time, the average income for the bottom 20 percent of Ohio families increased by 11.6 percent — from $16,432 to $18,337. The average income for the middle 20 percent increased by 8.9 percent, from $45,031 to $49,051.

The study was conducted by the Center on Budget and Policy Priorities and the Economic Policy Institute, liberal-leaning Washington, D.C.-based research groups, and released in Ohio by Cleveland-based Policy Matters Ohio, also a liberal-leaning research group.

Nationally, incomes for the top 5 percent went up by 59.8 percent, from $138,093 to $220,700 while income from the bottom 20 percent rose 11.1 percent, from $16,302 to $18,116. Income for the middle 20 percent went up by 13 percent, from $44,650 to $50,434.

The income gap is greater on average nationally than it is in Ohio. Nationally, the average income of the richest 5 percent is more than 12 times that of the bottom 20 percent. In Ohio, the average income of the families in the top 5 percent is 9.5 times as large as the bottom 20 percent.

Amy Hanauer, executive director of Policy Matters Ohio, said that's not much of a consolation for Ohioans.

"I think we can't ignore the fact that this state, like the rest of the country, is growing more unequal," said Hanauer.

Reasons for the growth in income inequality include long periods of unemployment, globalization, the shift from manufacturing jobs to lower-paying service jobs, immigration and the weakening of unions, said Hanauer.

She said higher income families benefited from growth of the stock market through income from dividends, interest and stock sales. Her proposals to help those hurt by the growing inequality include enacting a state earned income tax credit for families earning less than about $39,000 annually, extending unemployment benefits beyond 26 weeks and expanding access to Medicaid, food stamps and housing assistance.

The study covered the period 1987-89 to 2004-06.