Expanding Income Inequality: More Evidence That We Need Unions Now More Than Ever

June 28, 2016 by Andrew Baker

A new study by the Urban Institute has found that the upper middle class is at its largest and richest. The study defines upper middle class as a household of three earning between $100,000 and $350,000. The study reports the upper middle class has expanded from about 12% of the population in 1979 to a new record of nearly 30% as of 2014. According to the study:

A massive shift has occurred in the center of gravity of the economy. In 1979, the middle class controlled a bit more than 46 percent of all incomes, and the upper middle class and rich controlled 30 percent. In contrast, in 2014 the rich and upper middle class controlled 63 percent of all incomes (52 percent for the upper middle class and 11 percent for the rich); the middle class share had shrunk to 26 percent; and the shares of the lower middle class, poor, and near-poor had declined by half.

Meanwhile, a new report released by Oxfam and the Economic Policy Institute found that 43.7 percent of American workers (58.3 million workers) earn less than $15 an hour. And 31.3% (41.7 million workers) earn less than $12 an hour. Many of these workers have access to few or no benefits such as paid leave, child care, or retirement plans.

The picture is even more disturbing for minorities and women. More than half (53 percent) of African-American workers and 60 percent of Hispanic workers earn under $15 an hour. Despite women representing less than half of the workforce (49 percent), they are well over half (nearly 55 percent) of those workers earning under $12 an hour.

The trend of greater income inequality, with the well-off doing better and better while the middle and lower classes decline, mirrors the decline in union strength in the U.S. More unions, better jobs, a better country!

The Urban Institute report may be found at http://www.urban.org/research/publication/growing-size-and-incomes-upper-middle-class/view/full_report. And the Oxfam/EPI report may be found at https://www.oxfamamerica.org/static/media/files/Few_Rewards_Report_2016_web.pdf.

 

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