Increasing Wealth and Income Inequalities before Trump

by Vins

In Summer 2018, Rick Baum reported that wealth inequality was on the rise even before the Trump administration. Undercutting any claims that the Obama administration made meaningful gains in making American society more equitable for ordinary families, Baum’s study detailed trends in wealth inequality that perpetuate the increasing disparity between the rich and the ordinary families.

According to his analysis of recent Federal Reserve Board information and government reports, wealth inequality has been on the rise. For example, from 1989 to 2016, the shares of the nation’s wealth held by the top one percent increased from 29.60 percent to 38.65 percent. Similarly, the shares held by the top ten percent overall increased from 66.80 percent to 77.18 percent. Yet, the shares held by the bottom 90 percent declined from 33.20 percent to 22.82 percent, indicating that economic growth came at the expense of those in the bottom.

Income inequality is also on the rise. From 1992 to 2016, the share of total income going to the top one percent increased from 11.68 percent to 23.80 percent. Shares of income for the bottom 90% decreased from 58.22 percent to 49.69 percent.

As a result, the rates of poverty, homelessness, and food insecurity remain dire for those in the bottom 90%. For example, in 2016, the rate of poverty was 12.7 percent, an improvement since its peak in 2012 at 15.0 percent. Nonetheless, it is a number still too high, with more than 40 million people living in poverty. Further, the number of impoverished children under 18 years of age is over 13 million, and the number of homeless people increased from 549,928 to 553,742 from 2016 to 2017. Among US households, 15 million were also food insecure, having had difficulty at some time in the year providing meals for the households. Baum asked: “What kind of wealthy society allows thousands of people, especially children, to go hungry and to lack the security of a home?”

There has been limited corporate media coverage of the report as of late 2018. For example, in September 2017, the New York Times addressed the same Federal Reserve Board information. This article assessed differences in concentrations of wealth but lacked detail regarding trends in increasing wealth- and income-inequalities.

Source:

Rich Baum, “Inequality was Increasing before Trump,” New Politics, Summer 2018, http://newpol.org/content/inequality-was-increasing-trump.

Student Researcher: Paul Chanyoung Lee (University of California, Berkeley)

Faculty Evaluator: Andy Lee Roth (Project Censored)