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Report: The Money Gap Widens in Kentucky

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Thursday, November 15, 2012   

BEREA, Ky. - In a state where nearly 17 percent of the population already lives in poverty, the income gap is growing, according to a new national report. The study released today by the Center on Budget and Policy Priorities and the Economic Policy Institute shows only three states had larger income-gap increases than Kentucky over the last 30 years.

Jason Bailey, director of the Kentucky Center for Economic Policy, says the widening gap is a setback for many working families.

"It has serious impacts on child health, on child development, on their ability to afford college."

The study finds that from the late 1970s to mid-2000 the average income of poor Kentuckians declined nearly 12 percent - the worst decline in any state. Meanwhile, income for the wealthiest 20 percent of the state's population jumped nearly 62 percent.

Bailey says one challenge is Kentucky's "skills gap," a workforce problem being made worse by income inequality.

"We don't have enough Kentuckians who have the basic education needed for the state to prosper in a modern economy."

The study cites the loss of manufacturing jobs and the failure of the minimum wage to keep pace with inflation as among the reasons why the income gap is growing.

Bailey says state lawmakers could mitigate the disparity by overhauling the state's antiquated tax system.

"We need to be looking at tax fairness when we look at tax reform."

A report to the governor from his commission on tax reform is expected next month.

The report is available at 12:01 EDT today at www.cbpp.org.




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