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Published: Sunday, 2/23/2014


Income inequality

Wealth disparities that separate the richest and poorest Americans are at an all-time high, according to a new state-by-state analysis, although Ohio fares better than most other states. The widening income gap between the nation’s top 1 percent and the remaining 99 percent of households suggests the United States is a land of opportunity only for some.

Ohio’s top 1 percent saw their inflation-adjusted income grow by about 70 percent between 1979 and 2011, while the bottom 99 percent experienced a nearly 8 percent income decline, according to the analysis. The study was conducted by the Economic Analysis and Research Network, a Washington-based organization of state and regional research, policy, and advocacy groups, including Policy Matters Ohio.

The study tracks state-level income trends from 1917 to 2011. In the latter year, the average income of the top 1 percent in Ohio was $699,693. The bottom 99 percent averaged $38,583 — an inequality ration of 18-to-1, compared to the national gap of 24-to-1.

The figures got worse during the Great Recession: Ohio’s top 1 percent saw income growth of nearly 15 percent — the seventh-highest rate in the nation — while incomes for the other 99 percent of Ohioans fell 0.4 percent; the figures are adjusted for inflation. Everyone’s wallet was affected by the recession, but even in a crushing economy, the rich could still get richer.

Michigan, along with Nevada, Wyoming, and Alaska, experienced a stunning distinction between 1979 and 2007: Only those in the top 1 percent of earnings saw rising incomes during those years, while the rest of the households in these states endured declines in their earnings.

These ever-growing income gaps are bad for the state, region, and country. This reality imperils the economy and suggests it is not working for those who struggle to make ends meet. It reinforces the need for a higher minimum wage and greater investment in education to help improve mobility or even subsistence.

There is no edict or expectation that all Americans must make equivalent salaries. But a narrower gap between rich and poor would benefit the nation and its citizens.

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