Roughly eight years ago, Obama infamously first shared with “Joe the Plumber” his plans to “spread the wealth around.” Unfortunately, at least for the like-minded socialists of the country, as data from the U.S. Bureau of Labor Statistics reveals, he failed miserably.
In fact, as Bloomberg points out today, not only did income inequality not decline under Obama’s reign, it actually surged to multi-decade highs with people in the 90th percentile of all earners bringing home over 5x the amount paid to people in the 10th percentile.
Of course, as we pointed out in a post entitled “Harvard Crushes The “Obama Recovery” Farce With 9 Simple Charts“, low-income wages have been stagnant, in real terms, since the mid-1970s. And, despite Obama’s vow to “spread the wealth around”, real wages for the poor actually suffered under his presidency.
As Bloomberg notes, wage disparity is supposed to be counter-cyclical, rising during periods of economic contraction and falling during expansionary periods. Which, obviously, begs the question of exactly how income disparity could be surging in light of Obama’s stunning economic recovery that he so often bragged about.
Americans near the top of the income scale, whose weekly earnings exceed those of 90 percent of all full-time wage and salary workers, made at least $2,095 in a typical week last year, according to the report released Jan. 24. Those in the bottom 10 percent earned less than $415.It’s not all bad news: The latest figures show overall median weekly earnings for the 101 million workers 25 years or older last year climbed about 3 percent to $885, from $860 in 2015. The 2016 figures were reported by the Labor Department this week along with its fourth-quarter data from a survey of U.S. households.
Wage disparities tend to be counter-cyclical, rising during times of slower economic growth, and usually shrinking when the business cycle accelerates. Of course, inclusive policies and opportunities to move up the socioeconomic ladder also play a huge role.
While the economy has grown at a historically modest 2.1 percent rate on average in the current expansion that began in mid-2009, the U.S. is almost at full employment now and the tight labor market has sparked hope that workers across the board will eventually see a lasting pickup in wage growth. Whether paychecks also reflect less inequality in coming years is anyone’s guess.
Unfortunately, “Hope” was not an effective plan.