Iowa's Wealth & Income Gap Growing Quickly
GRAPH: Levels of income inequality differ by state. In Iowa, the differences are at the low end of the scale, but still substantial. Courtesy of Ctr. on Budget & Policy Priorities.
November 20, 2012
DES MOINES, Iowa - A new study based on Census figures shows the income gap between the rich and poor in America continues to grow quickly. And the most recent figures say Iowa's poorest have lost more than 6 percent of their income over the last decade. Analysts say it's becoming a serious issue for the economy as a whole.
According to Elizabeth McNichol, a senior fellow with the Center on Budget and Policy Priorities in Washington, the gap has grown nationally for three decades, but has become worse in the last ten years.
"When the economy has grown, the lion's share of that has gone to households at the top. What we've seen in the last decade is that the incomes of the households at the bottom are actually declining."
Economists stress that rising inequality is not inevitable, that the gap between rich and poor actually fell between World War II and 1970. And they say it also fell for a brief period during the economic growth of the late 1990s, and that part of that was due to Clinton-era tax policies and a rise in the minimum wage.
McNichol says inequality is bad because it makes the economy less flexible. And she believes people who work hard and play by the rules should be rewarded.
"There's a question of fairness. Economic growth comes from the contributions of people in all walks of life. When your place on the income scale determines whether you get rewards for that work, then that's a problem."
She says education, job training and tax policies at the state level can all make a big difference.
"Assistance in child care, job training, transportation, health insurance can help families get jobs and move up the income scale."
In Iowa, the richest 5 percent of households have average incomes that are 8.7 times larger than those of the bottom 20 percent of households.
The report is online at www.cbpp.org.