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‘Income Inequality’ Grew 4x Faster Under Obama

From a strangely tight-lipped New York Times:

Income Gap Grows Wider (and Faster)

By ANNA BERNASEK | August 31, 2013

INCOME inequality in the United States has been growing for decades, but the trend appears to have accelerated during the Obama administration. One measure of this is the relationship between median and average wages.

The median wage is straightforward: it’s the midpoint of everyone’s wages. Interpreting the average, though, can be tricky. If the income of a handful of people soars while everyone else’s remains the same, the entire group’s average may still rise substantially. So when average wages grow faster than the median, as happened from 2009 through 2011, it means that lower earners are falling further behind those at the top.

One way to see the acceleration in inequality is to look at the ratio of average to median annual wages. From 2001 through 2008, during the George W. Bush administration, that ratio grew at 0.28 percentage point per year.

From 2009 through 2011, the latest year for which the data is available, the ratio increased 1.14 percentage points annually, or roughly four times faster.

The Times snuck out this article on a Saturday morning during the Labor Day weekend. Why is that? And it has gotten almost no attention, even though it’s from the New York Times. Why is that?

Also, that this is the entire article. Which is incredibly short, especially for the notoriously long-winded Times. Why is that?

The reasons for the widening income gap aren’t entirely clear. Yes, the nation has had a big recession, but recessions typically tend to lessen inequality rather than increase it.

It must be Bush’s fault.

“We’re seeing the continued effects of the weak labor market and the long-term trends involving technology and globalization,” said Lawrence Katz, an economics professor at Harvard, “Our self-inflicted wounds from austerity are also exacerbating things.”

Oh, it’s all due to our self-inflicted austerity. — Wait a minute. What austerity?! Obama has spent untold trillions on various stimulus plans. Not to mention QEs 1 through 3.

It’s always possible that the data for 2012 will show a narrowing of the gap, but Professor Katz says he wouldn’t count on it.

Which means we will never hear about those figures, at least not from our news media guardians.

This article was posted by Steve on Thursday, September 5th, 2013. Comments are currently closed.

2 Responses to “‘Income Inequality’ Grew 4x Faster Under Obama”

  1. GetBackJack says:

    Hmmm. Smart people guarded their funds while poor people pissed ’em away.

    (thinking, thinking)

    You got to know when to hold ’em. Know when to fold ’em. Know when to walk away, know when to run. You never count your money when you’re sitting at the table, there’ll be time enough for counting when Obama’s gone ..

  2. BannedbytheTaliban says:

    “If the income of a handful of people soars while everyone else’s remains the same, the entire group’s average may still rise substantially.”

    This is also true if you eliminate a bunch of zeros at the bottom end. However, that does not promote wealth envy and class warfare. The most likely cause for these statistics is a skewing due to the increase in part time labor, compounded by the drop in labor participation. High earners don’t tend to lose their jobs in a recession. They are important to the companies they work for, that’s why they make the big bucks.

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