Page 7 - Aruba Today

U.S. NEWS A7
Monday 18 January 2016

US Financial Front:

Lower pay for poor is widening US income gap, study finds

AP Economics Writer deputy director of its met- Judith Castro serves a lunch order at a local grocery store in the rates on the wealthy — the
WASHINGTON (AP) — The ropolitan policy program. Little Havana area of Miami. The income gap in major U.S. cities Democrats largely favor in-
income gap in major U.S. Consider Cincinnati, home goes beyond the trend of rising paychecks for those at the top: creases, the Republicans
cities goes beyond the to such major companies Pay has plummeted for those at the bottom. Many of the poor- cuts — will boost pre-tax
trend of rising paychecks as Procter & Gamble and est households still earn just a fraction of what they made before incomes for the poorest.
for those at the top: Pay Macy’s that are associat- the Great Recession began in late 2007. Congressional Republicans
has plummeted for those ed with middle class pros- have discussed increasing
at the bottom. Many of perity. Its bottom 20 per- (AP Photo/Alan Diaz) tax cuts for low-income
the poorest households still cent earned just $10,454 in workers without children as
earn just a fraction of what 2014. After inflation, that’s was 8.5. The poorest have have failed to pull millions a way to address the ab-
they made before the 3 percent less than what clawed back some of their of Americans back up the sence of wage growth. It’s
Great Recession began in they earned in 2013 — and earning power since the economic ladder. a plan, President Barack
late 2007. Even as the re- 25 percent below their in- economy officially began The findings also compli- Obama said in his State
covery gained momentum comes when the recession to recover 6½ years ago. cate plans by presidential of the Union address Tues-
in 2014 with otherwise ro- started eight years ago. But the analysis suggests candidates to combat in- day night, that “we can all
bust job growth, incomes Cincinnati’s top 5 per- that strong job growth equality because it’s un- support.” Brookings found
for the bottom 20 percent cent of earners made at and modest pay raises clear how tweaking tax that the income gap was
slid in New York City, New least $164,410 in 2014, a highest in Boston, where
Orleans, Cincinnati, Wash- figure that has increased the top 5 percent made
ington and St. Louis, ac- since 2013, though it re- 17.8 times what the bot-
cording to an analysis of mains 7 percent below tom 20 percent did. But
Census data released last pre-recession levels. The that gap appears to re-
week by the Brookings Insti- consequence is a widen- flect the large population
tution, a Washington think ing income gap. The top 5 of college and graduate
tank. “It’s really about the percent earned 15.7 times students in a city contain-
poor losing ground rather what the bottom 20 per- ing Harvard University, the
than these upper-class cent did in Cincinnati. Na- Massachusetts Institute
households pulling away,” tionally, this ratio was 9.3 of Technology and many
said Alan Berube, a senior — the same as in 2013. Be- other leading institutions of
fellow at Brookings and fore the recession, the ratio higher education.q