Copyright 2000 InterPress Service, all rights reserved.
Worldwide distribution via the APC networks.
*** 01-Sep-0* ***
Title: ECONOMY-US: Inequality Continues to Widen/EMBARGO
By Jim Lobe
WASHINGTON, Sep 3 (IPS) - Despite low unemployment and the longest
uninterrupted economic expansion in US history, the incomes and
wealth of middle-class and poor families are falling further and
further behind those of wealthy households, according to a new
report released here Sunday.
Indeed, adults in most families are working harder than ever just
to stay in place, according to the report, 'State of Working
America,' issued by the Economic Policy Institute (EPI). It found
that an increase in the number of hours that families, especially
middle-class families, worked each year was the primary factor
contributing to income growth over the past decade.
And, while more households than ever gained from owning shares of
stocks in the booming stock markets of the past decade, those
gains were far surpassed by a huge run-up in household debt during
the same period, according to the 454-page report. Typical
household debt grew by almost 12,000 dollars over the period,
while household stock ownership grew by only 5,500 dollars.
''Persistent low unemployment and increases in the minimum wage
have helped workers at the bottom recover from 15 years of wage
stagnation and decline,'' says Lawrence Mishel, co-author of the
EPI report. ''But some alarming trends persist as wage and income
inequality remain high, families are working more hours than ever
and are saddled with the highest levels of debt in history.''
The report, released every two years on the eve of the annual
Labour Day holiday, offers a host of measures on how the working
population in the United States is faring in an era of
globalisation. This year's report also comes amid a presidential
campaign in which the incumbent vice president, Al Gore, is
running with a populist, anti-corporate message seemingly out of
tune with the conventional wisdom that US families ''have never
had it so good.''
EPI's findings, however, suggest reasons why conventional wisdom
may be wrong. While they show that wages have risen sharply across
the board since 1995, when middle-class and poorer families began
to reap the benefits of the boom, most wage-earners have had to
work harder than ever just to keep up.
Moreover, inequality of both wages and household wealth continued
to grow despite the strong gains, particularly by poorer workers,
during the same period of record low unemployment.
This does not augur well for the much-touted ''new economy,''
according to the report's authors. While investments in
information technology have clearly led to higher labour
productivity, they conclude, they have not contributed
significantly either to job growth or to meaningful wage gains for
workers outside the hi-tech sector.
Experts have been predicting for years that the big winners in the
''new economy'' will be well-educated workers, and, indeed, recent
Census Bureau figures show that the US workforce is better
educated than ever before.
According to a report by the Population Reference Bureau (PRB)
issued last week, more than a quarter of young adults have
bachelor's degrees, almost three times more than their
counterparts of 40 years ago.
But women and African-Americans account for almost all of that
improvement. The percentage of college degrees received by white
males - the largest demographic group in the workforce - and
Hispanic men has remained mostly stagnant over the past 25 years,
and real wages for those groups have failed to improve.
''The fact is a majority of people are still not college-
educated,'' says John Haaga, co-author of the PRB report. ''In the
last couple of decades, only those with a college education have
seen their incomes rise.''
As a result, women, who are expected to make up the majority of
new workers over the next decade, have narrowed the wage gap with
men, although there remains a 25-percent difference in the median
full-time wage between the two groups.
But if that gap has narrowed, the same is not true for lower- and
middle-income households vis-…-vis high-income families. While low
unemployment since 1995 permitted low-wage earners and the poor to
close the gap with the middle, the top continued to pull away from
the rest of the pack, according to the EPI report.
Perhaps most dramatic in that respect was the 62.7 percent rise in
the real wage of the median corporate executive officer (CEO)
between 1998 and 1999 alone. The typical CEO earned 107 times than
the typical worker last year, according to EPI - almost double the
difference of a decade ago.
Real incomes of low-income families grew at a 1.9 percent annual
rate from 1995 to 1999; those of middle-income families grew at a
2.3 percent rate; while those at the top grew by 3.2 percent.
Over a longer time span, from 1979 to 1999, however, real hourly
wages for high-wage earners increased 17.6 percent, while wages
for low-wage earners fell during the same period by 9.3 percent,
according to the report which noted that those in the middle saw
real wages stagnate.
What gains have been made in family income were largely due to a
sharp increase in family working hours, according to the report.
The average middle-class, married-couple family, which increased
its income by 9.2 percent from 1989 to 1998, worked 182 hours more
per year over that period, roughly equivalent to a full month of
work.
For middle-income African-American families, the difference was
even more dramatic. To maintain similar increases in income,
African-American parents increased their work by almost 500 hours -
or close to 12 weeks.
Other gauges of wealth included in the EPI report also show
yawning gaps.
While much has been made in recent years about growing stock
ownership across the entire population, the top one percent of
stock owners in the United States still hold almost half of all
stocks, while the bottom 80 percent own just 4.1 percent. Almost
two-thirds of all households have stock holdings worth 5,000
dollars or less.
The huge stock market gains achieved during the past decade were
similarly concentrated among the richest households. Nearly 35
percent of the gains went to the wealthiest one percent of
households over the past 10 years. Only 2.8 percent of the total
went to middle-income households.
The net worth of the typical household rose about 2,200 dollars in
the same period - from 58,800 in 1989 to 61,000 dollars in 1998.
The wealthiest one percent of households now controls about 38
percent of the national wealth, while the bottom 80 percent
control only 17 percent. (END/IPS/EF/jl/da/00)
Origin: SJAAMEX/ECONOMY-US/
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