Gap between wealthy, poor widening for families in Utah
The widening gap between the wealthiest and the low- and middle-income families in Utah isn't as drastic as in some areas of the country. Average gains for high-income families in Utah averaged $2,005 annually, while middle-income households averaged $606. The incomes among the poorest 20 percent of the population grew by $160 per year.
The good news is that Utah, while showing a similar pattern as the national averages, has the least disparity among states in the ratio of top and bottom household incomes. In other words, Utah is the most equal when comparing the incomes of those at the top and those at the bottom.
One reason, said Allison Rowland, director of budget and research for the advocacy group Voices for Utah Children, is that the average low-income family in Utah has a higher average income than low-income families nationwide. Additionally, the average high-income family has a lower income than the national average, so incomes tend to be weighted toward the middle.
"Overall worker productivity in the country and the state has continued to rise, but the benefits of this growth have been concentrated among the wealthiest members of society," she said.
Welfare reform in the 1990s was predicated on the notion of moving people into the work force. That reduced the welfare rolls but didn't end poverty, because most people had to take jobs that wouldn't support them, she said.
"We are asking the impossible of the least fortunate members of society," she said.
And those were the good times.
The same groups, now that things are heading downward, are being hit hardest, while the wealthiest will be far less affected, Rowland said. The stock market and credit crisis will affect the wealthiest, but they have cushions, such as savings, that will both soften the financial blow and allow them to bounce back much faster.
The gaps in income are natural formations of core shifts in the economy, such as business becoming both global and instantaneous. Investing worldwide, one of the key reasons many of the well-off stay well-off, will continue to grow and continue to leave out most middle and low-income households, she said.
Average income of the middle fifth nationwide rose 13 percent during the past two decades. Incomes in the top fifth grew by 36 percent.
In Utah, the richest 20 percent of families earned 5.4 times more, on average, than the poorest 20 percent.
Elizabeth Mechanical, a senior fellow at the CPA and co-author of the report, said gaps in the economy have more than a day-to-day effect on people's ability to make it or to feel like they'll be OK.
A group that is stagnating starts to feel it is just going to stagnate further. That, in turn, widens economic disparity and makes the country even less united, she said.
E-mail: jthalman@desnews.com
Recent comments
The latest tax cut exagerates this problem. It was a tax cut where…
Tax cut increases problem | April 13, 2008 at 10:57 p.m.
"Average gains for high-income families in Utah averaged $2,005 annually…
Stewart | April 13, 2008 at 5:15 p.m.
