By: Robert Lenzner
December 5, 2013
The "Inequality Boom" is what social scientist Sheldon Danziger, President of the Russell Sage Foundation here in New York, uses to describe the current condition of 100 million Americans -- if the cost of housing, transportation and healthcare were subtracted from the median income of full-time workers. It's a boom because under Danziger's hypothesis, 100 million Americans is a whopping 33% of the total population; the Census Bureau figures only 15% of Americans, or 45 million, are below the $24,000 annual income level for poverty in a family of four.
Danziger has been on the poverty solution academic beat almost since Pres. Lyndon B. Johnson declared war on poverty 50 years ago, and is now ensconced at one of the oldest foundations in the nation, established in 1907 for "the improvement of social and living conditions in the United States." Danziger's work is cut out for him since there is growing income inequality in the U.S. as the political controversy over reducing the level of government transfers promises to increase poverty and widen income disparity.
For example, there is the growing threat that the food stamp program, now being used by 47 million people, is scheduled to be reduced. Plus, the extension of unemployment benefits, which stabilized many of those hurt by the Great Recession, is to be substantially limited in availability. At the same time, 70% of the new jobs created by the slow economic recovery are part-time, less than 29 hours a week, without health insurance, and cannot be sufficient to support a family of four.
Against this downward trend comes President Obama, trying to increase the minimum hourly wage from $7.00 an hour or $280 per week (or $14,560 a year), just enough to raise a single person above poverty. If Obama is successful in hiking the minimum wage to $10.00 an hour or $400 a week, that would provide $20,000 annual income, which is below the poverty line of $24,000 for a family of four.
Danziger can wax enthusiastic about the theme of what he calls "the golden age in America", when between 1947 and 1975 (see chart) family income adjusted for inflation showed more than 90% increases in family income for the 20% segment of America. In fact the 60th percentile group in the middle had their income increase by the largest degree, 99.2%. That amounts to a near double in family income from 1947 to 1975.
By comparison, the period from 1975 through 2010 has created substantial differentials in family income. The top 5% of families saw their income rise by 56.7% while the lowest gained only 3.7% over 35 years. Here's the most crushing: a statistic that shows the misfortune suffered by the middle class. See chart here.
From 1960 until 1975 the median earnings for a full time male worker rose from $36,420 to $51,670, but then slowly declined to $49,398 in 2012, when adjusted for inflation, according to the U.S. Census Bureau. And that $49,000 is before taxes.
As well, the mean monthly Social Security Benefit for Retired Workers has climbed from $400 in 1950 to $1200 a month in 2010. That's $14,400 just above the $12,000 poverty cutoff for a single man, and just slightly over 50% of the poverty line for a family of four. In short, there's no way the Republican opposition to Obama can attest to those helped by government programs to be having anything but a poor bottom level standard of living. The "Inequality Boom" is booming.