Gap Between the Rich and the Poor Grows

A Congressional Budget Office (CBO) report, in World Press.Com (2007), found that the richest one percent of Americans saw a greater increase in their total income from 2003 to 2005 than the combined total income of the poorest 20 percent of the population. The income of the top one percent rose from under $1.3 trillion in 2003 to $1.8 trillion in 2005. The increase of $524.8 billion far exceeded the total income of the poorest fifth of Americans, $383.4 billion.

If the top one percent had simply been compelled to live in 2005 on the same income they made in 2003, with the increase diverted to the poor, the incomes of the bottom 20 percent of the population could have been increased by 170 percent. In other words, the abolition of poverty in America would merely require stopping the superrich from grabbing an ever-greater share of the vast wealth produced by the labor of working people.

The CBO report provided other metrics for gauging the staggering growth of economic inequality. The total 2005 income of the top three million Americans was equivalent to the total income of the bottom 166 million Americans.

The average household in the top one percent enjoyed an increase of $465,700 in annual income; the average household in the bottom 20 percent saw an increase of only $200, while those in the middle fifth saw a rise of just $2,400.

The wealthiest fifth of the population now collects 55 percent of total national income, considerably more than the total combined income of the bottom 80 percent, and the highest such figure ever recorded in the US.

The wealthiest one percent saw its share of national income double from 1979 and 2005, rising from 9 percent to 18 percent. During that quarter-century, the average income of this top layer more than tripled, rising 228 percent, from $319,000 to $1.1 million. During the same period, the average after-tax income of the poorest fifth grew only 6 percent, the average income of the middle fifth grew 21 percent, less than one percent a year.

The disparities between rich and poor, and between rich and the middle, ballooned accordingly. In 1979, the top 1 percent averaged 8 times more than middle-income families and 23 times more than the poorest 20 percent. By 2005, the top 1 percent had 21 times the income of middle-income families and 70 times the average income of the poorest 20 percent.

This appears to be global phenomena. For example there are now 9.5 million people in the world with assets that exceed one million dollars and their growth rate is about 6 to 8 % each year.