Up, Up and Away

(Cross-posted from The Progressive Pulse, a North Carolina blog)

The incomes of North Carolina’s richest five percent of families grew much faster than those of all other families over the past 20 years. Top families now earn, on average, 12 times more than poor ones and 4.3 times more than middle-income ones.

Between 1987-89 and 2004-06, the post-federal tax, inflation-adjusted incomes of North Carolina’s richest five percent of families rose by 57 percent. This represents an annual increase of $4,249. In contrast, the poorest fifth of families saw their incomes rise by 9.9 percent, which translates into an annual gain of $87. And the middle fifth of families posted a 9.6 percent gain, which equals an annual raise of $234.

These findings come from the new report Pulling Apart, published by the Center on Budget and Policy Priorities and the Economic Policy Institute, nonpartisan research organizations in Washington, D.C. The study uses modified census data to measure state-level income trends at three points in time: the late 1980s, the late 1990s and the mid-2000s Each period represents a peak in an economic cycle.

The report notes that family incomes in North Carolina grew at similar rates between the late 1990s and mid-2000s. This development, however, did little to offset the long-term rise in inequality. Consider the following:

* In the mid-2000s, the richest 5% of families had an average income ($197,331) that was 12 times greater than the average income of the poorest 20% of families ($16,436). This is up from a ratio of 8.4 in the late 1980s.

* In the mid-2000s, the richest 5% of families had an average income ($197,331) that was 4.3 times greater than the average incomes of the middle 20% of families ($45,432). This is up from a ratio of 3.0 in the late 1980s.