From The American Prospect's poverty report:
In 2005, the top 20 percent of American households had 50.4 percent of the nation's income, while the bottom 20 percent had 3.4 percent -- the largest margin between top and bottom since this data series began, in 1967. The Center on Budget and Policy Priorities reports that between 2003 and 2004, the post-tax income of the bottom fifth rose by $200 a year, while that of the top fifth rose by $11,600, and post-tax income for the top 1 percent rose by $145,500. And the wealth gap is far more extreme, with the top 1 percent of households holding one-third of the nation's net worth, while the bottom 40 percent have less than one percent of the nation's net worth.
I'm always impressed by how remarkably stark the data is. "The top 1 percent of households holding one-third of the nation's net worth, while the bottom 40 percent have less than one percent of the nation's net worth." Utterly unreal. But, of course, we're all to believe that a hammerlock on the nation's wealth confers no advantages, and the children of the poor are exactly as likely to succeed as the children of the rich, and the real story in this country is that, over the past few years, the rich are making all the money paying more in taxes. Meanwhile, I never quite know whether to believe these reports:
A new study by Harry Holzer and several colleagues, commissioned by the Center for American Progress' Task Force on Poverty, underscores how serious the drag on the economy turns out to be. Holzer and colleagues estimate that the net loss to the economy from persistent childhood poverty is about $500 billion each year. That is about 4 percent of the gross domestic product, more than $1,600 for every person in the country. The economic loss is almost evenly divided among lower productivity, higher health costs, and increased crime costs for adults who grew up in persistent poverty.
I've no problem summoning outrage over persistent childhood poverty, but it's a little trickier to believe it costs us the equivalent of $500 billion each year. And if you extrapolated the same methodology out into the wider childhood population, would we be missing out of 32% of GDP? How sensitive are the mechanisms causing the deadweight loss to the policies that would alleviate deprivation and poverty? I'm fully convinced poverty is vulnerable to social policy, but I'm less certain that a massive economic expansion will follow.
