Inequality Soars Under Bush's Strong Leadership
At last! The debates finally featured some discussion of poverty and inequality. Kerry went out of his way to bring up the issue towards the end. Looking over the transcript, he didn't seem to be responding to any question in particular, but he made a strong statement:
The American middle class family isn't making it right now, Bob. And what the president said about the tax cuts has been wiped out by the increase in health care, the increase in gasoline, the increase in tuitions, the increase in prescription drugs.
The fact is, the take home pay of a typical American family as a share of national income is lower than it's been since 1929. And the take home pay of the richest .1 percent of Americans is the highest it's been since 1928.
These figures are very likely from the recent comprehensive study by Piketty and Saez
, which would make them figures for 2000. I don't mean to criticize: this study is currently the gold standard of inequality research and I'm impressed that Kerry (or one of his advisors) is talking about it. In contrast, I rarely have any idea where Bush's figures could possibly come from.
The most recent figures available
[big pdf] are from the Census Bureau's Current Population Survey (table A-3). They don't cover the truly rich, like the Piketty and Saez study, but they're informative about the trend in inequality. Since Bush took office, the situation has continued to deteriorate.
The figure below shows two common measures of inequality: the ratios of the 90th and 95th percentiles of household income to the 10th percentile. After increasing for 15-20 years, inequality began to level off in the late 1980s. But since Bush took office, it's been on the upswing.
In 1995, a few years into the Clinton recovery, the 10 percent of households lived on $10,501 or less (in 2003 dollars), while the 95th percentile household made 12.9 times more: $135,448. By 2003, the 10th percentile household had advanced by only $35, while those at the 95th percentile enjoyed an extra $18,672 per year, now making 14.6 times more than the lower-income households.