Incomes fell for poor and stagnated for middle-class families since late 1990s, making it tougher for them to weather economic downturn.
Poor and middle-class families are entering the recession in a precarious situation due in part to declining or stagnant income growth, a study released Wednesday has found.
Incomes, on average, have declined by 2.5% among the bottom fifth of families since the late 1990s, while inching up by just 1.3% for those in the middle fifth of households, according to an analysis by the Center on Budget and Policy Priorities and the Economic Policy Institute, two liberal think tanks.
The wealthiest slice of Americans, however, saw their incomes rise by 9%.
This is what happens when people vote based on where they hope to be economically. People need to understand that in order to get to that promised economic lands they must vote where they actually happen to be. Conservative Republican policies have destroyed the middle class with the help of those in the middle class who simply don't understand that they are voting against their own best interests. Do you think I am wrong?
Unlike what happened during the economic boom of the 1990s, lower- and middle-class families did not share in the prosperity of recent years, the report found. In fact, the United States has had its longest jobless recovery and slowest rate of payroll growth during this decade.
"We're worried about the impact of the downturn on the families whose incomes haven't recovered from the last recession," said Jared Bernstein, Economic Policy Institute senior economist and co-author of the report.
Wages have not kept up with inflation, families have loaded up on debt and homeowners have seen the value of their largest asset decline, he said. The situation will only get worse during the economic downturn.
John McCain who wants to continue the economic policies of the Bush administration and who wants to make the tax cuts permanent, would be in effect a third Bush term. Can we afford more of those failed polcicies?
The income gap between the rich and the rest of the population is widening. In 22 states, the top fifth of families made more than seven times what the poorest fifth took home, according to the report. In the late 1980s, only one state - Louisiana - had such a spread. Meanwhile, in more than two-thirds of the country, the wealthiest saw their income grow more than twice as fast as the middle-class over the past two decades.
We now have the second widest income gap in the world after Brazil. Is this really what we want? We have made it nearly impossible that the next generation will live as well as our generation unless of course if you are rich then the good times just keep right on rolling.