Gap Between Rich And Poor Widened Starkly In 2011 As Wealthiest Recouped Many Of The Losses From 2008

Thursday, September 13, 2012 07:14
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Gap Between Rich And Poor Widened Starkly In 2011 As Wealthiest Recouped Many Of The Losses From 2008

Tags: Economic Outlook | economy | investment strategies

The disparity between rich and poor in America has been a growing theme for years.
 
That disparity grew in 2011 and grew sharply. The gap between the top 20% of American household income grew simply from the fact that most Americans have seen absolutely no benefit from the economic rebound that is now in its second year.

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The recovery is a weak one and economic reports continue to show it is uneven across the country. Housing, one of the primary bright spots in the economy, is rebounding not across the board, but on a regional basis.
 
The top one fifth of households saw their income increase by 1.6% last year. The top 5% saw even larger increases.This means the wealthy have largely recovered their losses from the 2008 crisis.
 
Incomes in the middle brackets actually declined while those in the lower brackets stagnated. Median income fell 8% lower than in 2007, the year before the recession began having an effect.
 
This is a sticking point for the presidential race. President Obama notes that median household income is improving this year, in 2012. The administration points to the need to build monetary policy from the middle out instead of from the top down.
 
The stark rise in income disparity came as a shock to the Census Bureau. It says changes in median income usually occur gradually over time, not in a noticeable fashion within a single year.
 
There has been improvement in unemployment in 2012 and most of it has occurred through a shift from part-time work to full-time work and in the bottom percentiles.
 
But that still has not positively impacted the middle class. Middle income workers make up much of the manufacturing and middle management workforce, a sector that has fared worse than even the bottom rungs of workers.
 
So we have a picture where income is rising at the top, deteriorating in the middle, and stabilizing at the bottom. Economists say this pattern has been going on since the late 1980s.

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