[Vision2020] Inconvenient Income Inequality

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December 16, 2011
Inconvenient Income Inequality
By CHARLES M. BLOW
Is income inequality becoming the new global warming? In other words, is this another case where the facts of an existential threat lose traction among a weary American public as deniers attempt to reduce them to partisan opinions? 

It's beginning to seem so. 

A Gallup poll released on Thursday found that, after rising rather steadily for the past two decades, the percentage of Americans who said that the country is divided into "haves" and "have-nots" took the largest drop since the question was asked. 

This happened even as the percentage of Americans who grouped themselves under either label stayed relatively constant. Nearly 6 in 10 Americans still see themselves as the haves, while only about a third see themselves as the have-nots. The numbers have been in that range for a decade. 

This is the new American delusion. The facts point to a very different reality. 

An Associated Press report this week on census data found that "a record number of Americans - nearly 1 in 2 - have fallen into poverty or are scraping by on earnings that classify them as low income." The report said that the data "depict a middle class that's shrinking." 

An October report from the Congressional Budget Office found that, from 1979 to 2007, the average real after-tax household income for the 1 percent of the population with the highest incomes rose 275 percent. For the rest of the top 20 percent of earners, it rose 65 percent. But it rose just 18 percent for the bottom 20 percent. 

And a report released in May by the Organization for Economic Cooperation and Development found that "the gap between rich and poor in O.E.C.D. countries has reached its highest level for over 30 years." In the United States, the average income of the richest 10 percent of the population had risen to around 14 times that of the poorest 10 percent. 

Our growing income inequality is a fact. So is the possibility that it could prove economically disastrous. 

An April report from the International Monetary Fund found that growing income inequality has a negative effect on economic expansion. The report said that long periods of high growth, which were called "growth spells," were "much more likely to end in countries with less equal income distributions. The effect is large." It continued: "Inequality seemed to make a big difference almost no matter what other variables were in the model or exactly how we defined a 'growth spell.' " 

Our income inequality could jeopardize our recovery. 

Yet another Gallup report issued Friday found that most Americans now say that the fact that some people in the U.S. are rich and others are poor does not represent a problem but is an acceptable part of our economic system. 

If denial is a river, it runs through doomed societies. 

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I invite you to join me on Facebook and follow me on Twitter, or e-mail me at chblow at nytimes.com. 




____________________________________
Wayne A. Fox
wayne.a.fox at gmail.com
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