By Palash R. Ghosh: Subscribe to Palash's RSS feed
September 29, 2010 12:28 PM EDT
The income disparity between the wealthiest and poorest Americans expanded to a record high in 2009 as the recession tore at the fabric of the poor and lower middle-class, according to data from the U.S. Census Bureau.
The top 20 percent of American earners -- those making more than $100,000 annually - received 49.4 percent of all income generated in the country, compared with the 3.4 percent earned by those below the poverty line.
That translates to a ratio of 14.5-to-1, up from 13.6 in 2008 and almost double the low figure of 7.69 recorded in 1968.
The U.S. income gap between rich and poor is the greatest among Western industrialized nations.
"Income inequality is rising, and if we took into account tax data, it would be even more," said Timothy Smeeding, a University of Wisconsin-Madison professor who specializes in poverty.
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"More than other countries, we have a very unequal income distribution where compensation goes to the top in a winner-takes-all economy."
The data also revealed that the number of Americans at the very bottom of the income ladder are at record highs. About 6.3 percent of the population are below half the poverty line - $10,977 for a family of four - up from 5.7 percent. This was the highest level since the government began tracking this group in 1975.
(The 2009 poverty level was set at $21,954 for a family of four, based on an official government calculation that includes only cash income. It excludes non-cash aid such as food stamps.)
Sheldon Danziger, public policy professor at the University of Michigan, commented that the U.S. has several programs and policies in place to fight poverty. But he added that the country "has trouble addressing ever-widening income inequality-even with a growing federal deficit and previous warnings by former Federal Reserve Chairman Alan Greenspan about soaring executive pay."
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