income inequality

WASHINGTON >> Income inequality has soared to the highest levels since the Great Depression, and the recession has done little to reverse the trend, with the top 1 percent of earners taking 93 percent of the income gains in the first full year of the recovery.

The yawning gap between the haves and the have-nots — and the political questions that gap has raised about the plight of the middle class — has given rise to anti-Wall Street sentiment and animated the presidential campaign. Now, a growing body of economic research suggests that it might mean lower levels of economic growth and slower job creation in the years ahead, as well.

“Growth becomes more fragile” in countries with high levels of inequality like the United States, said Jonathan D. Ostry of the International Monetary Fund, whose research suggests that the widening disparity since the 1980s might shorten the nation’s economic expansions by as much as a third.

Reducing inequality and bolstering growth, in the long run, might be “two sides of the same coin,” research published last year by the IMF concluded.

-- By Annie Lowrey, New York Times

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While median net worth for the middle-class dropped by 28% following a decade filled with two nasty recessions, the median net worth of the upper-tier actually rose by 1% based on Pew Research's study.

According to a report in The New York Times from March, 93% of the income generated in 2010 ($288 billion) went to the top 1% of earners, producing an 11.6% rise in their 2010 income over the previous year. As for the remaining 99% -- middle-class included -- income for the average worker increased by just $80 over the previous year.

With basically no wage growth, no avenues to meaningful saving, discouraging employment opportunities, a black hole in the housing sector, and the rich getting richer, it's very easy to see why middle-income America is feeling so poor these days.

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[see also the income gap]