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Host: Scott LaMar

Smart Talk: Report says income inequality growing

Written by Scott LaMar, Smart Talk Host/Executive Producer | Jan 27, 2015 3:43 PM
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What to look for on Smart Talk Wednesday, January 28, 2015:

A new report out this week shows the top 1% of wage earners in Pennsylvania are the only group that has seen an increase in their incomes since the nation's economy began to recover.

The Increasingly Unequal States of America: Income Inequality by State looked at income growth on a state-by-state basis across the country.  The report was compiled by the Economic Analysis Research Network and the Economic Policy Institute and in Pennsylvania by the Keystone Research Center.

The report says that since the current economic expansion began in 2009, real incomes have increased 3.7% in Pennsylvania.  During that period, the income of the top 1% of earners increased 28.6% while incomes for the other 99% fell 1.1%.

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Dr. Mark Price


Dr. Mark Price, an economist with the Keystone Research Center was one of the report's co-authors.  He'll appear on Wednesday's Smart Talk.

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  • Radio Smart Talk img 2015-01-28 09:18

    Matt emails:

    Your guest stated that "since 1979," economic recoveries have been distributed more and more unequally. It seems to me that this coincides with the rise to power of the believers in supply-side economics (intentionally use that term for those who had faith in what bush rightly called "voodoo economics"). Can you ask your guest if there is a corellation there?

    • Mark Price img 2015-01-28 14:06

      Hi Matt, my apologies for the late reply. I would certainly agree that the promise of what was called "supply-side economics" was that deep cuts in top marginal tax rates would unleash more economic growth and opportunity for everyone. The economy since 1979 has grown more slowly and as today's program explored more unequally.

  • Radio Smart Talk img 2015-01-28 09:26

    Lee emails:

    I understand that "a rising tide lifts all boats". If this is true, wouldn't an increase in the minimum wage tend to lift all wages? Or does that only work if the recipient of the higher income is a yacht buyer?

    • Mark Price img 2015-01-28 14:08

      Hi Lee, generally the ripple effect of minimum wage increases is pretty limited to folks earning within about a dollar of the new higher minimum wage. So minimum wage increases tend to compress the wage distribution rather than just ratchet everyone's wages up.

  • jjones img 2015-01-28 09:43

    Um, a most interesting report and program that I would love to be able to listen to, to concentrate on better, but you know, Mr. Price is perhaps, you know, not the one to discuss on the radio because, you know, um, he has difficulty speaking without, you know, falling back on generalizations that he, you know, thinks he has to explain, you know, at length, you know, even though, you know, he sounds like an educated, you know, knowledgeable economist. You know? And a rising tides lifting all boats may be correct, but as Rick Santorum recently said, not if your particular boat has a hole in it...

    • Mark Price img 2015-01-28 14:11

      Hi Jjones. I haven't had a chance to listen, but in advance my apologies if the use of "you know" and "um" was excessive.

  • Lisa img 2015-01-28 09:43

    Talking about the disparity between social equality of management and labor, how much of that is driven not only by the loss of well-paying manual labor jobs but also the rising popularity of union-bashing? Seems like it is very popular among politicians and management to blame unions for all economic woes and to depict union members as lazy and greedy. The decrease in union strength has gone hand in hand with inequality of pay.

    • Mark Price img 2015-01-28 14:24

      Hi Lisa, great question. I can only add that an important challenge is that union organizers today are much more likely to be illegally fired for their activities than in the past and it takes longer to agree to a contract after a successful organizing campaign. These are among the range of factors in addition to the attitudes you describe that are reducing union membership.

  • Radio Smart Talk img 2015-01-28 09:45

    Jim emails:

    I heard an economist on some public radio show say this: Actually, the unusual period was the period from the end of WWII to about 1980, when everyone's wages and wealth went up together. During most other periods it has been much like what we see now. The wealthiest have been getting wealthier than the rest of us. Please comment.

  • Radio Smart Talk img 2015-01-28 09:45

    Joseph emails:

    When I was growing up in the 50's the country actually built public things: schools, highways, parks, new buildings, etc. Today it seems that we are not willing to pay taxes to build or even repair the existing infrastructure.

    • Mark Price img 2015-01-28 14:28

      Hi Joseph, I would tend to agree we suffer from lack of investment in infrastructure. The great recession was a great opportunity to make big investments when the cost of construction was relatively cheap. We did some investment but certainly no where near what is required to maintain our existing infrastructure let alone address the need to use make investments to increase energy efficiency to help address global climate change.

  • Radio Smart Talk img 2015-01-28 09:47

    John emails:

    An argument can be made that the period in which income was distributed more equitably (postWWII to the 1970's) was actually an aberration in the history of capitalism, which naturally moves toward monopoly.

    That golden era was caused by the incredibly massive destruction of both capital and the work force during the Great Depression and World War II, during the latter of which 60 million were killed and much of Europe and Japan razed.

    Could it be that only a similar destruction of capital and people will restore a balance, when the capitalists rediscover the need to care for a fragile workforce with social programs such as universal health care and minimum wage. Today, instead, there are millions of unneeded workers

    • Mark Price img 2015-01-28 14:32

      Hi John, that's an interesting question explored in Thomas Piketty's book Capital in the Twenty-First Century. It's long read but it addresses the points you raise better than I could do in this forum.

  • Radio Smart Talk img 2015-01-28 09:52

    Thomas writes:

    i am an investor work just north of 1 million dollars, most of my investments are in publicly traded corporations, and real estate.

    my comment is this, i hear complaints about the ceo's i just want to say that if is was not for those men and women to manage a company for
    its shareholders the share price and dividends would not rise.

    i also think that individuals are living way beyond their means....if incomes are dropping i am seeing more and more mercedes and bmw's on the road toaday.

    i have invested and lived below my means, and in all of my life have never made more then 56k from any job.

    i now make more from investments.

    • Mark Price img 2015-01-28 14:33

      Hi Thomas, we may disagree but I do appreciate your point of view.

  • Radio Smart Talk img 2015-01-28 09:56

    Craig emails:

    The caller from Hershey made a half-truth about President Reagan firing the controllers. He fired them because they broke the law and not to break the union.

  • Radio Smart Talk img 2015-01-28 09:59

    David emails:

    As competition and economy issues cause profit loss in manufacturing isn't it reasonable to assume the CEO, company presidents ect will continue to protect their income leaving less funds for the shop floor employees?

    • Mark Price img 2015-01-28 14:35

      Hi David, as gloomy as I may sound at times I remain hopeful that changes in economic policy can help slowly turn the tide and generate rising wages for low and middle income workers.

  • Valen Smith img 2015-02-03 15:21

    This is a result of years of US tax policy favoring the rich at the expense of everyone else. This is truly a national problem and it wasn't created by Obama. If this trend isn't changed, this country is going to continue to lose it's standing. And he is being blamed for this because the no one can accept the responsibility for this and they have significant responsibility. They have helped create an oligarchy where wealth is the new god while payday loans are demanded today among common people.