Facebook Twitter



The gap in income between the richest and poorest Americans is the largest since 1947 when the federal government began keeping those statistics, a congressional Joint Economic Committee report found.

The "chairman report," released this week by committee chairman Rep. Lee Hamilton, D-Ind., said the income of the average American was higher in 1989 "but growth in income has not been spread evenly across the population.""Upper income Americans were the main direct beneficiaries of tax cuts in the early 1980s," the committee said. "There is no evidence in these data that those benefits have trickled down to lower-income Americans.

"It is one thing to have income inequality increase when the economic pie is expanding rapidly and most people's standard of living is improving," the committee said. "It is quite another when the standard of roughly 60 percent of American families stagnates."

The report noted that in 1988, the last year for which data is available, the wealthiest 40 percent of all U.S. families received 68 percent of all family income, up from 65.8 percent in 1979.

By contrast, the poorest 40 percent of families received 15.3 percent of all income, compared to 16.8 percent a decade ago.

"This disparity in income shares is the largest since 1947, when we first began to keep these statistics," the report said.

Hamilton said that not only was the gap between the rich and the poor the biggest since 1947, "the poverty rate remains higher than it was in the 1970s, even after an extended (economic) recovery."

The report also noted that during the postwar period, worker compensation, including pay and benefits, grew at the same rate as productivity.

"During the past 10 years, however, earnings growth has lagged behind productivity growth, while non-labor income (interest, dividends and rents) has been growing faster than labor income," the committee said.



Rich get richer

The congressional Joint Economic Committee report cited these figures for the period between 1979 and 1989:

- The average family income of the wealthiest 20 percent in American society climbed from $74,403 to $89,938, an increase of 14.2 percent.

- The average income for the second richest 20 percent rose from $43,001 to $46,330, or 7.7 percent.

- The average family income in the poorest 20 percent dipped from $9,278 to $8,800, a fall of 4.3 percent.

- The average family income from the second poorest 20 percent fell from $20,697 to $20,655, a slip of .2 percent.