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Income gap grows again between U.S workers, wealthy
by The Militant
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01 Feb 2004
Vol. 68/No. 5
February 9, 2004
BY SAM MANUEL
WASHINGTON, D.C.—Recent figures released by the U.S. Department of Labor show the income gap is widening between the wealthiest 10 percent in the country and the 10 percent at the bottom of the wage scale.
The data shows that the income of workers with the lowest wages fell by 3 percent last year. According to the labor department, the weekly take-home pay for these workers rose a mere $19 over three years—from $284 in the final quarter of 2000 to $303 in the same period last year. That left a net increase of 0.6 percent after inflation is factored in.
The statistics also reveal that the income of the “median full-time worker over 16 years of age” rose 2 percent—a 0.1 percent increase in purchasing power after inflation is factored in.
The top 10 percent, on the other hand, saw a 4.5 percent increase. According to the government agency’s figures, the weekly income of these managers, professionals and higher-paid workers rose $141—from $1,299 to $1,440.
The figures would reveal an even greater gap if stock options and other extras received by executives in the top 10 percent were included, noted an article in the Wall Street Journal on the government report.
The widening income gap “is the totally predictable result of a relatively strong growth in tandem with relatively high unemployment,” Economic Policy Institute economist Jared Bernstein told the Journal. Bernstein said that there are far more workers looking for jobs than are available, weakening their ability to bargain for a “larger share of the pie. It’s a recipe for higher inequality,” he said.
University of Michigan economist Sheldon Danziger said that the new figures most likely show a return to a longer-term trend of growing income inequality after an “interruption in the late 1990s,” in the words of the Journal.
The government data does not include part-time workers, and those who are self-employed or not in the workforce. The latter category includes those who have retired or are living on incomes derived from government programs or investments.
Young workers were hit the hardest by the widening income gap. The average paycheck for workers between the ages of 16 and 24 years shrank slightly after inflation. Workers 25 and older netted only a 0.6 annual increase.
The historic inequity between the earnings of women and men is highlighted by the fact that women earned 25 percent less than men on average last year, even though their average paycheck increased by 1.8 percent as compared to 0.3 percent for men.
The labor department report indicated that there was little change in income disparity between white and Black workers. Figures published in the Encarta dictionary show that in 2000, Blacks on average earned 77 percent of the wages of whites in comparable jobs, down from 82 percent in 1975.
A factor in the widening income gap is that the federal minimum wage hasn’t been increased for seven years, having been frozen at $5.15 by successive Democratic and Republican administrations.
The Journal also pointed to the continuing decline in unionization. The percentage of workers in the United States who are union members dropped to 12.9 percent from 13.3 percent in 2002. Another labor department study reported that the average weekly paycheck of union members grew by 3 percent last year, compared with 2 percent for nonunion members.
Workers in manufacturing and industrial jobs had the largest drop in union coverage, from 8.6 percent in 2002 to 8.2 percent today. Union membership among workers employed by federal, state, or city governments dropped slightly to 37.2 percent.