Census Reports Rise in Income Inequality

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Rise in income inequality
U.S. Census Bureau Headquarters

According to the U.S. Census Bureau, income inequality in the United States has risen by 1.6% from 2010-2011. The census report states:

“The share of aggregate income increased 1.6 percent for the highest quintile”

The most dramatic gains were made by the top five percent of income earners, those making over $186,000 a year, with almost a five percent gain in share of income. These growth trends have eclipsed the continued decline of median household income. To put it in perspective, median income before the recession in 2007 was $54,916 (adjusted to 2012 dollars).

“Real median household income in the United States in 2011 was $50,054, a 1.5 percent decline from the 2010 median and the second consecutive annual drop”

Despite the overall trend of economic progress since the recession ‘ended’ in 2010, not all socioeconomic classes are benefiting equally. From 2010 to 2011, as median household income has fallen, individuals in the highest quintile have increased their share of income. This phenomena can obscure data that measures aggregate or average income, which has risen overall. Emmanuel Saez, a Professor of Economics at UC Berkeley, suggests that such a trend is likely tied to the recent increase in corporate profits.

“National Accounts statistics show that corporate profits and dividends distributed have grown strongly in 2011 while wage and salary accruals have only grown only modestly. This suggests that the Great Recession will only depress top income shares temporarily and will not undo any of the dramatic increase in top income shares that has taken place since the 1970s.”

At the other end of the economic spectrum, poverty statistics have essentially plateaued. “After three consecutive years of increases, neither the official poverty rate nor the number of people in poverty were statistically different from the 2010 estimates,” the Census Bureau reported.

Luckily, Americans are no longer falling into poverty at an increasing rate, which has risen steadily from 12.5 percent in 2007 to 15.1 percent in 2010. However, they have not experienced to the kind of recovery seen by those with annual incomes $186,000 and up.

The study also analyzed health insurance coverage trends, which have seen slight changes since 2010. The Census Bureau found no statistically significant changes in the rate or number of people covered by private, employment-based, or direct-purchase health insurance. The rate and number of people being covered by government health plans (Medicare, Medicaid, military, and other government programs) however, did increase by 1% from 2010 to 2011. Consequently, the number of Americans without health insurance coverage has decreased by 1.4 million people.

As the economic recovery continues to crawl forward, the middle-class is still asking the question, when will the economy improve and what is causing this rise in income inequality? The Census report offers some insight for answering this question, but the outlook for the middle-class remain uncertain.

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  1. Dennis Pederson The economy will never go back to what it was. And why should it? It's a house-of-cards!
  2. James William Struckle Pretty straight forward: The Fed. Printing trillions of dollars helps the stock market & government, but hurts most other Americans through inflation.
  3. Bill Wirt incomes are not suppose to be "equal"...but I guess I missed something in econ 101 and 102 in college.
  4. Glen Gleissner Gas prices.
  5. Johnny Ritchie Lobbyist and Greed owning our elected officials vs the voters/people. It will continue as long as we allow it. This Election we have a choice of someone who is bought and puppet strings are already attached as proven by his daily flip flops or someone who is turning things around in spite of Congress who said from day one....we are obstructionists for the lobbyist and super wealthy.
  6. Ryan Kiplinger Two words: The Fed.
  7. Brandon Fallon The wealthiest of the wealthy in America also saw their income rise. When billionairres' networth increases by billions year over year, its a sign that they are taking advantage of special tax loopholes not privy to those less fortunate.
  8. Michael Higham I'm wondering about the specific causes of the trends. Maybe those in the middle are taking lower paying jobs. Maybe their incomes haven't been raised to adjust to inflation and are therefore making "less" than they did in years past. Just a couple of ideas.
  9. Alex Gauthier Incomes for 90% of Americans have been stagnant for at least 30 years. It could very well be one of the underlying causes.
9 comments
Dennis Pederson
Dennis Pederson

The economy will never go back to what it was. And why should it? It's a house-of-cards!

James William Struckle
James William Struckle

Pretty straight forward: The Fed. Printing trillions of dollars helps the stock market & government, but hurts most other Americans through inflation.

Bill Wirt
Bill Wirt

incomes are not suppose to be "equal"...but I guess I missed something in econ 101 and 102 in college.

Johnny Ritchie
Johnny Ritchie

Lobbyist and Greed owning our elected officials vs the voters/people. It will continue as long as we allow it. This Election we have a choice of someone who is bought and puppet strings are already attached as proven by his daily flip flops or someone who is turning things around in spite of Congress who said from day one....we are obstructionists for the lobbyist and super wealthy.

Brandon Fallon
Brandon Fallon

The wealthiest of the wealthy in America also saw their income rise. When billionairres' networth increases by billions year over year, its a sign that they are taking advantage of special tax loopholes not privy to those less fortunate.

Michael Higham
Michael Higham

I'm wondering about the specific causes of the trends. Maybe those in the middle are taking lower paying jobs. Maybe their incomes haven't been raised to adjust to inflation and are therefore making "less" than they did in years past. Just a couple of ideas.

Alex Gauthier
Alex Gauthier

Incomes for 90% of Americans have been stagnant for at least 30 years. It could very well be one of the underlying causes.