Rusnock, Katelynn. 2012. Mississippi ranks first in growth of income inequality. Hattiesburg American. November 15:
Written by
Katelynn Rusnock
Gannett Washington Bureau
WASHINGTON – The gap between the rich and the poor grew more in Mississippi than in any other state in recent years, according to a report released today.
Between the late-1990s and the mid-2000s, the gap between the 20 percent of people taking in the most money and the 20 percent taking in the least money increased faster in Mississippi than anywhere else, said the report from the Center on Budget and Policy Priorities and the Economic Policy Institute. That was also true of the gap between the top 20 percent and the middle 20 percent.
“The benefits of economic growth have been skewed in favor of the wealthiest members of society,” the report said of the nation as a whole. “Rising income inequality not only raises basic issues of fairness but also adversely affects our economy and political system.”
In Mississippi, the average income of people in the bottom 20 percent dropped 17.3 percent, or $3,127, between the late-1990s and mid-2000s. But those in the top fifth saw their incomes rise an average 19.1 percent, or $23,429. Average income for those in the middle fifth dropped 5.4 percent, or $2,642.
Since the late-1970s, income in Mississippi has increased by 75.3 percent for those in the top fifth and 12.7 percent for those in the bottom fifth.
Similar trends are apparent in other states, the report said.
“In 45 states and the District of Columbia, average incomes grew more quickly among the top fifth of households than among the bottom fifth between the late-1990s and the mid-2000s,” it said. “In no state did the bottom fifth grow significantly faster than the top fifth.”
The time period analyzed in the report represents “a lost decade for moderate- and low-income households,” Elizabeth McNichol, co-author of the report and senior fellow at the Center on Budget and Policy Priorities, told reporters Wednesday.
What McNichol described as an American ideal — that “hard work should pay off” — has not been realized, according to the report.
Average annual income for the bottom fifth of Mississippi residents was $16,129 from 2008 to 2010, the report said. The average was $133,858 for those among the top fifth and $224,729 for those in the top 5 percent. The middle fifth averaged $45,822.
A major cause of increases in the wealth gap has been a lack of new jobs throughout the state, said Ed Sivak, director of the Mississippi Center for Economic Policy.
“We have the same number of jobs today as we did in 1996,” he said.
Sivak said the state has lost 88,000 manufacturing jobs over the past 10 years.
The number of workers in low-paying jobs and a lack of higher education for many Mississippi residents also have fed increases in the income gap, he said.
“Nearly one in four of our workers are employed in low-wage occupations,” Sivak said. “We have over half-a-million Mississippians of prime working age that have a high school degree or less.”
He said making child care, education, and health care more available for people earning low wages would help close the gap.
The 2010 federal health care reform law will help those earning lower incomes in states that decide to participate in the law’s expansion of Medicaid eligibility, Sivak said.
“When Mississippi moves forward with Medicaid expansion, it would do a lot of things to help income inequality,” he said. “First, it would create jobs.”
Sivak also called for tax reform in the state.
“We need to take into account that a family earning $35,000 a year is in the same tax bracket as a family earning $1 million dollars a year,” he said. “We need to make sure that we have a revenue system that is balanced.”
The report says the increasing wealth gap is a problem throughout the country. Nationally, those in the top 5 percent of income-earners earn an average of 13 times more than those in the bottom fifth.
The report calls for state and national government officials to focus on legislation that could decrease the income gap, such as tax reform and support for low-income families.
“The good news is that states can push back against these trends,” McNichol said. “Governors and legislatures that adopt policies now that narrow rather than widen inequality can help their states recover from the downturn.”