The President, the Pope and Income Inequality

This past week, the President of the United States spoke out directly and unflinchingly on what he called “the defining challenge of our time:  Making sure our economy works for every working American.”   He told us that “if we refocus our energies on building an economy that grows for everybody, and gives every child in this country a fair chance at success, then I remain confident that the future still looks brighter than the past, and that the best days for this country we love are still ahead.”

The previous week, Pope Francis had decried the growing inequity in the world, "While the earnings of a minority are growing exponentially, so, too, is the gap separating the majority from the prosperity enjoyed by those happy few. This imbalance is the result of ideologies which defend the absolute autonomy of the marketplace and financial speculation.”  He went on to ask, “’How can it be that it’s not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points.”

Two of the most important leaders on the global scene are asking the same question about income inequality. 

So how is Massachusetts doing?  

Here are some critical facts:

  • Our median income is $59,373 (8th Highest)
  • Our households earning $200,000 is 6.56% (4th Highest)
  • Our population living below the poverty line is 10.30% (7th Lowest)

All told, Massachusetts has the fourth-greatest percentage of wealthy residents among all the states and the seventh-lowest percentage of people living below the poverty line. However, according to The Massachusetts Budget and Policy Center, "incomes for the highest income families in Massachusetts have grown almost five times as fast as those for low-income families and nearly twice as fast as those for middle-income families," over the past two decades. According to the organization, the inequality gap has increased more during this time in Massachusetts than in 47 of the other states.   Source:  Huffington Post (April 2011)

Check out this graphic summary

For those of you want more depth

 

Here are some important ones from our friends at Mass Budget and Policy:

The median wage in Massachusetts is higher than the U.S. average. What is more, while median wages nationwide have been stagnant for over 30 years, the Massachusetts median wage has risen 24 percent.

Median_Wages.png

However, the gains have not been evenly shared. In 1984, low-wage workers in Massachusetts (at the 20th percentile) earned roughly 41 cents for every dollar earned by a high-wage worker (at the 80th percentile). By 2011, they were earning just 32 cents. That's a drop of more than 20 percent. 

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All across the U.S., wage inequality has been growing, but the gap between high and low earners has widened more in Massachusetts. 

Inequality.png

 A part of the problem is erosion of wages at the bottom of the labor market.

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 And a major contributing factor is the impact of education - or the lack thereof on one's ability to get a good job and earn a living wage.

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