Rich Get Richer, Poor Get Poorer in Mass.
By Kelly Field
WASHINGTON, April 24–The earnings gap between rich and poor has grown more in Massachusetts in the last 20 years than it has in all but two states in the country, according to a report released yesterday. Only New York and Oregon experienced more growth in “economic inequality” over the last two decades.
“The rich are getting richer and the poor are getting poorer,” said Elizabeth McNichol, director of the Center on Budget and Policy Priorities State Fiscal Project and a co-author of the report.
Massachusetts also has the fifth-largest gap between rich and poor, with the top fifth of earners making an average of $165,700, more than 10 times what the bottom fifth of earners make ($15,700). This translates into an income disparity of $150,000
Twenty years ago, the gap was not nearly so large. At the end of the 1970s, Massachusetts was ranked 24th in the country in its ratio of rich to poor; at the end of the 1980’s, it was ranked 23rd.
“We went from the middle of the pack to near the bottom,” said Jim St. George of the TEAM Education Fund, a non-profit research and advocacy organization based in Boston.
Massachusetts economists attribute the growing gap largely to the economy and changes in the labor market. As manufacturing jobs have moved out of state, low-skill, low-paid workers have either been laid off or moved into less lucrative service jobs, explained Paul Harrington of the Center for Labor Market Studies at Northeastern University. In the services industry “the distribution of income is much broader” than in the manufacturing industry, he said.
“Many of these jobs are minimum wage or less and part-time, not full-time,” added Marguerite Kane, an associate professor of political science at Merrimack College. “Though they have unions, they tend not to get contracts that provide as much salary or benefits as they had in the manufacturing sector.”
According to the study, Massachusetts is one of only two states where the bottom fifth of earners lost a significant share of their income over the last 20 years. Since the early 1990s, the average income for the bottom fifth of Massachusetts workers has fallen by 7 percent, St. George said.
Another factor contributing to the change has been the surge in bonuses and stock options given to high-paid executives, Harrington said. Such extras have “substantially altered the distribution of income in the state,” he said.
Though experts differ on how to redress income inequality, some suggest raising the minimum wage, strengthening unemployment insurance, removing barriers to employment and implementing supports such as transportation and child care for low-income families. Local economists, meanwhile, emphasize the importance of job skills training.
“People with modest skills will do well if we find ways to enhance their skills,” St George said. “We need to invest in community colleges across the state.”
He suggested that the state pay for these programs by raising income taxes for the upper-income people, increasing the tobacco tax and sales tax and closing corporate tax loopholes.
Kane agreed that “Massachusetts needs workers who are trained for the new economy, particularly an economy that is driven by technology.”
But Roger Taylor, a professor of economics at Northern Essex Community College, said it is unfair to blame the government entirely.
“A lot of (economic inequality) is (the result of) initiative,” he said. “There are opportunities out there, but unless someone pushes you, you aren’t going to take advantage of them. We have to reward people like Bill Gates, Drew Bledsoe and Oprah Winfrey.”
Published in The Eagle-Tribune, in Lawrence, Mass.
