Study: In Pennsylvania, Very Rich Getting Richer, Everybody Else Getting Poorer
Updated with comment from the governor’s office.
In Pennsylvania, it really is true that the rich are getting richer and the poor are getting poorer.
Actually, strike that: The very rich are getting richer — and everybody else is is getting poorer.
A new study shows that the average income of the state’s families grew between 2009 and 2013, but only because the top 1 percent earned so much more than the other 99 percent of Pennsylvania residents: Everybody else — the bottom 99 percent of Pennsylvania families — saw their collective income decline by 1.1 percent.
The widening income gap was found across the country, but was particularly pronounced in Pennsylvania.
“The pattern is the same across all the states, which is the income is increasingly flowing up,” said Mark Price, an analyst with Pennsylvania’s Keystone Research Center. “It’s worse some places than others.”
The findings were contained in The Increasingly Unequal States of America, a state-by-state study of deepening income inequality in all 50 states. Price contributed to the study — which used IRS data to examine pre-tax income of all Americans. The report was released nationally by the Economic Policy Institute. (The full report can be found below.)
Among the study’s findings:
- Pennsylvania and Delaware were among the 16 states where all of the income growth between 2009 and 2013 went to the top 1 percent.
- Overall, income growth grew by 3.7 percent in Pennsylvania during the years studied. Delaware barely saw any growth at all — just. 0.7 percent — and the bottom 99 percent of earners there saw incomes decline by 1.6 percent. New Jersey saw stronger overall income growth (5.9 percent) and the bottom 99 percent saw a slight collective growth in income, just more than 1 percent.
- The average income of the “one percenters” in Pennsylvania? $1,069,318. The ninety-nine percenters? $43,847. (In Delaware, the numbers were $863,734 and $46,686, respectively; In New Jersey, $1,546,481 and $57,299.)
- The minimum income to be part of Pennsylvania’s 1 percent: $354,868. Delaware: $331,759. New Jersey: $538,666.
It wasn’t always this way. In previous years, top earners saw their income rise more quickly than everybody else, but the growth in income was more broadly distributed. From 1979 to 2007, for example, Pennsylvania’s income grew by 40 percent. The state’s top 1 percent nearly doubled its income during that time, but the bottom 99 percent at least saw their incomes also grow by 25 percent during the same period.
The study’s authors attributed widening inequality to a minimum wage that hasn’t kept pace with inflation, a decline in union membership and collective bargaining, and the changing nature of America’s economic recoveries: In recent years, it’s taken longer for the economy to return to full employment.
“Governor Wolf looks forward to working with leaders from both parties to rebuild our economy to create strong, sustainable middle-class jobs and make our playing field fairer,” said his spokesman, Jeffrey Sheridan. “Governor Wolf inherited a stagnant economy that ranks last in job creation and he knows that the playing field here unfairly burdens middle- and low-income Pennsylvanians.”
Today’s report isn’t exactly a surprise. Philly Mag pointed out last year that in Pennsylvania, high-income sectors like manufacturing and construction had seen huge declines in employment in recent years, while low-wage “hospitality” jobs skyrocketed. That’s a recipe for the hollowing out of the middle class, which today’s report confirms is ongoing.
“The bottom 99 percent,” Price said, “don’t do very well in Pennsylvania.”
Follow @JoelMMathis on Twitter.