Increasing Income Gap Showcases Heartbreaking Reality

Luciano Gonzalez
Staff Writer

PC: John Ryan

Income inequality in the United States is worsening, in some places quite significantly, according to data compiled and analyzed by the United States Census Bureau. 

In the latest American Community Survey report, the Census Bureau reports that income inequality in the United States was “significantly higher” in 2018 than in 2017. Though there are many important facets to discuss as it relates to the economy, one of the aspects that merits immediate acknowledgement and discussion is the fact that the last time a change in the metric was said to be statistically significant was in the aftermath of a growth in income inequality that occurred from 2012-2013. 

An expanding economy is not, in and of itself, a counter to income inequality, as this data shows. The economy has been continually expanding, according to some metrics at least, for over a decade and during that decade the inequalities between the richest and the poorest households has at times increased. 

If someone asked why the inequality has been increasing, despite unemployment rates dropping, constant GDP growth, and other nominally positive economic indicators, economic experts like Professor Rodgers III of Rutgers University would cite factors like the decline of organized labor, tax policies that favor the wealthy, and a variety of other policy choices which ultimately expand the economy in superficial ways while not benefiting the totality of the country. 

The GDP, one common measure of tracking economic growth, has been criticized as being a measure of economic growth that doesn’t sufficiently cover the various factors that affect the economy, since it’s a measure of the theoretical monetary value of all finished goods and services produced within a country during a specific timeframe. Publications including the Harvard Business Review have published articles criticized the use of the GDP as a sort of end-all-be-all measurement of economic growth, a move which critics have pointed out ignores the complex realities of economic growth as well as the quality of life of producers of wealth, people whom often aren’t the recipients of much if any of the wealth they generate. 

Though income inequality has worsened, not all of the data shown in the report by the U.S. Census Bureau is negative. The median household income is higher than has ever been reported, coming in at over $61,000 in 2018, even if in over half of the country the median household income tended to be lower than that. 

In 14 states and Puerto Rico, the poverty rate fell, and in four of those states—California, Florida, Georgia and North Carolina—2018 marked the poverty rate falling for the fifth year in a row. When it comes to specific areas, the 25 largest U.S. cities did not experience worsened rates of poverty, and in seven of them poverty rates actually fell. It’s possible that the reasons for those dropping rates of poverty included minimum wage increases, something local and state governments have taken the lead on since the federal government hasn’t passed a minimum wage increase since 2009.



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