September 19, 2013
By Freddie Allen
NNPA Washington Correspondent
WASHINGTON (NNPA) – A new report confirms the old saw: The rich are getting richer.
According to a report titled, “Striking it Richer: The Evolution of Top Incomes in the United States” by researchers at the University of California at Berkeley, “From 2009 to 2012, average real income per family grew modestly by 6.0 percent but the gains were very uneven. Top 1% incomes grew by 31.4 percent while bottom 99 percent incomes grew only by 0.4 percent.”
The report continued: “Hence, the top 1 percent captured 95 percent of the income gains in the first two years of the recovery.”
On The Diane Rehm Show on National Public Radio, economists and financial journalists discussed the implications of the University of California at Berkeley report and how race often plays a role in perpetuating economic inequality in America.
Thomas Edsall, author of Chain Reaction: The Impact of Race, Rights, and Taxes on American Politics said on the program that since the 1960s, there’s been a growing sense among many Whites that government programs are providing benefits to minorities, Blacks at first and now Blacks and Hispanics.
Edsall said that feeling of resentment has helped drive up the opposition to raising taxes to provide for more benefits.
He continued: “There are a lot of very poor White counties in West Virginia, Kentucky, all through the Appalachian area where the Republican strength has become overwhelming. And a lot of that is based, I think, on racial matters, where people are disregarding their own interest and want to distinguish themselves from minorities in effect.”
Dante Chinni of the Wall Street Journal agreed.
Chinni said that when you look at the constituencies for congressional Republicans and congressional Democrats, the constituency for Republican House members looks like America circa 1994. The constituency for Democratic House members looks like America as it’s projected to be in roughly 2025.
Chinni added: “They really are right now representing two very different countries.”
The latest unemployment figures don’t provide any encouragement that the gap between Blacks and Whites is likely to close soon. Black unemployment rose to 13 percent in August, after dipping to a four-year low in July (12.6 percent), according to the latest jobs report from the Labor Department. The national unemployment rate fell from 7.4 percent to 7.3 percent, but economists agree that it decreased mostly because people exited the labor market and stopped looking for jobs altogether.
The Labor Department also revised jobs numbers for June and July down, which meant that there were 74,000 fewer jobs created than previously reported.
“As we’ve been seeing over the last several months, the recovery is just barely moving along,” said Valerie Rawlston Wilson, an economist and vice president of Research at the National Urban League Policy Institute. “We haven’t seen a lot of upward progress. The economy is just treading water.”
And if the nation’s economy is treading water, the Black economy is underwater. The Half in Ten campaign, a cooperative project by the Center for American Progress Action Fund, the Coalition on Human Needs and the Leadership Conference on Civil and Human Rights, reported that 11 million Blacks lived below the poverty line in 2011. Whites account for less than 1 in 10 of Americans living below the poverty line.
The unemployment rate for Black men was 13.5 percent in August up from 12.5 percent in July. The jobless rate for White men ticked down to 6.4 percent down from 6.6 percent in July. The unemployment rate for Black women was 10.6 percent in August edging up slightly from 10.5 percent in July. Over the summer, Black women enjoyed the greatest gains in the weak labor market. Economists speculate that it’s likely due to more opportunities for women in retail, hospitality and healthcare.
The federal government added zero jobs in August, possibly because of steep cuts from forced sequestration. Blacks hold government jobs at higher rates than their White counterparts, which means Blacks feel the sting worse when federal jobs dry up.
“That’s significant because those jobs tend to be very well-paying jobs and tend to provide good benefits,” said Wilson. “When that happens, we see this eating away at the Black middle class, especially.”
According to the Center on Budget and Policy Priorities, an organization that studies fiscal policy and public programs that affect low- and moderate-income families and individuals at the state and federal level, the unemployment rate for Blacks was 4 percentage points higher in August than at the start of the recession. The jobless rate for Whites was 2 percentage points higher in August than it was when the recession began.
In a statement on the Labor Department’s August employment report, Chad Stone, chief economist for the Center for Budget and Policy Priorities, wrote: “If lawmakers want to restore normal employment more quickly, they need to step up to the plate and replace the sequestration budget cuts with a balanced package of tax and spending changes that phase in more slowly so that they don’t weaken the recovery but that also build up more rapidly in later years — putting deficits and debt on a better long-term trajectory.”
Wilson said that because some lawmakers have a general distaste for spending money any federal stimulus will be hard to swallow on Capitol Hill, but if that doesn’t happen, we’re just going to continue to tread along.