|
Investors.com...
Income
Inequality Rose Most Under
President Clinton
By John Merline
Posted 11/03/2011
In
his weekend radio address,
President Obama decried that “over the past three decades, the middle
class has
lost ground while the wealthiest few have become even wealthier.”
Although he
was trying to leverage the Occupy Wall Street movement, the income gap
has been
a longstanding concern of his.
During
the 2008 campaign, Obama said,
“The project of the next president is figuring out how do you create
bottom-up
economic growth, as opposed to the trickle-down economic growth that
George
Bush has been so enamored with.”
But
it turns out that the rich
actually got poorer under President Bush, and the income gap has been
climbing
under Obama.
What’s
more, the biggest increase in
income inequality over the past three decades took place when Democrat
Bill
Clinton was in the White House.
The
wealthiest 5% of U.S. households
saw incomes fall 7% after inflation in Bush’s eight years in office,
according
to an IBD analysis of Census Bureau data. A widely used household
income
inequality measure, the Gini index, was essentially flat over that
span.
Another inequality gauge, the Theil index, showed a decline.
In
contrast, the Gini index rose —
slightly — in Obama’s first two years. Another Census measure of
inequality
shows it’s climbed 5.7% since he took office.
Meanwhile,
during Clinton’s eight
years, the wealthiest 5% of American households saw their incomes jump
45% vs.
26% under Reagan. The Gini index shot up 6.7% under Clinton, more than
any
other president since 1980.
To
the extent that income inequality
is a problem, it’s not clear what can be done to resolve it. Among the
contributing factors:
Economic
growth. Strong economic growth,
rising stock prices and household income inequality tend to go hand in
hand.
Technology.
Tech advances have put a
premium on skilled labor, according to a Congressional Budget Office
report .
Because the pool of skilled workers hasn’t grown as much as demand,
their wages
have climbed faster.
Free
trade and immigration. Cheap
labor abroad and an influx in low-skilled immigrants can depress wages
at the
bottom, according to the CBO.
Women
in the workforce. As the CBO put
it, “an increase in the earnings of women could boost inequality by
raising the
income of couples relative to that of households headed by single
people.”
Tax
policy changes don’t explain the
widening income gap. The CBO found that, by one measure, “the federal
tax
system as a whole is about as progressive in 2007 as it was in 1979.”
Read
this and other articles at
Investors.com
|
