Prometheus 6

Education has widened income inequality, too. Americans with college degrees earn nearly twice as much as those without them.

But education hasn't been a ticket to income growth lately. 

Between 2000 and 2005, workers with four-year college degrees saw their wages fall 3.1 percent, adjusted for inflation. Only two groups, who together make up just 3.4 percent of the workforce, saw inflation-adjusted wages rise. They were workers with doctoral degrees or specialty degrees, such as medicine or law, according to the U.S. Census Bureau. [P6: emphasis added]

The rich are getting much richer, much faster than everyone else
By Kevin G. Hall
McClatchy Newspapers

WASHINGTON - Over the past quarter-century, and especially in the last 10 years, America's very rich have grown much richer. No one else fared as well. 

In 2004, the richest 1 percent of households - 719,910 of them, with an average annual income of $326,720 - had 19.8 percent of the entire nation's pretax income. That's up from 17.8 percent a year earlier, according to a study by University of California-Berkeley economist Emmanuel Saez.

The study, titled "The Evolution of Top Incomes," also found that the richest one-tenth of 1 percent of Americans - 129,584 households in 2004 - reported income equal to 9.5 percent of national pretax income.However, median, or midpoint, family income rose only 1.6 percent between 2001 and 2004, when adjusted for inflation, according to the Federal Reserve. Median family real net worth - a family's gross assets minus liabilities - rose only 1.5 percent during those four years.

Those are very sluggish income-growth rates compared with the four years between 1998 and 2001, when median family income grew by 9.5 percent and median family real net worth grew by 10.3 percent.

Experts disagree on the causes, but they're in near agreement that this trend threatens to erode a fundamental American belief about fairness.

"It's not the actual getting ahead in America that's so important - it's been Americans' deep belief that they have the opportunity to get ahead. And if you lose that, there's damage to our society," said Douglas Holtz-Eakin, who until last year was the director of the nonpartisan Congressional Budget Office and before that was chief economist for President Bush.

In coming years, income inequality is sure to be a rallying cry in political debates over everything from raising the minimum wage to federal spending on education to overhauling the tax code.

Most theories on why the rich are getting richer focus on why everyone else isn't. Some explanations include the declining power of labor, the influx of illegal immigrants, the offshoring of jobs and global competition that holds down wage growth.

Education has widened income inequality, too. Americans with college degrees earn nearly twice as much as those without them.

But education hasn't been a ticket to income growth lately.

Between 2000 and 2005, workers with four-year college degrees saw their wages fall 3.1 percent, adjusted for inflation. Only two groups, who together make up just 3.4 percent of the workforce, saw inflation-adjusted wages rise. They were workers with doctoral degrees or specialty degrees, such as medicine or law, according to the U.S. Census Bureau.