Income Inequality in the South

Despite slowing slightly at the end of the last economic boom, the income gap between the nation's richest and poorest families again is accelerating, The richest 5% of American families now have incomes 12 times greater than those of the poorest 20% of families. Not only are the richest Americans pulling away from the poorest, but they also are pulling away from middle class families and those that are just rich.

These findings come from the new report Pulling Apart: A State-by-State Analysis of Income Trends, published by the Center on Budget and Policy Priorities and the Economic Policy Institute, nonpartisan research organizations in Washington, D.C. The authors use modified census data to track income inequality from the early 1980s to the early 2000.

The report contains interesting findings about the South. Six Southern states were among the 10 in the nation with the widest gaps between the richest and poorest families, and five were among the 10 states with the widest gaps between rich and middle-income families. Moreover, five Southern states have posted the nation's greatest increases between the incomes of the richest and poorest families.

Ironically, the growth of income inequality in many Southern states like Virginia, North Carolina and Tennessee is the result of economic growth and an upswing in prosperity. States connected to the new economy are thriving, but at the same time, the benefits of that prosperity are being concentrated among a few families, not shared widely.

Southern progressives should not misinterpret these data and bemoan economic growth. Rather, the challenge is to ensure that all Southern families have a chance to benefit from the region's newfound prosperity. The task is to help families access and take advantage of opportunities. Policies like raising the minimum wage, reforming state tax codes, revamping unemployment insurance, establishing state earned income tax credits, improving the safety net and improving access to post-secondary training mitigate income inequality and help families position themselves to take advantage of the opportunities present in the modern South.