New Reports Underscore Inequality Crisis

imagesIn the weeks leading up to Labor Day, politicians and economists are calling attention to the growing gap between the rich and poor and its effect on economic mobility and the economy as a whole.

A new report released this week by the U.S. Conference of Mayors underscores the growing problem of income inequality in this country.  According to the report, jobs lost during the Great Recession are being replaced with jobs that pay 23 percent lower—which represents $93 billion in lost wages.  Meanwhile, income gains are mostly going to the wealthiest U.S. households. The report also forecasts that income inequality will continue to persist and middle-income households will continue to fall behind unless policies are developed to mitigate these trends.

The U.S. Conference of Mayors report follows on the heels of a report released by the Federal Reserve which also reveals that a significant number of Americans are still struggling financially after the Great Recession.  The report, which was based on responses to a survey of over 4,100 people taken in 2013, shows that while a majority of U.S. households said they were “living comfortably” or “doing okay,” almost 40 percent reported that their families were “just getting by” or struggling financially.

The rating agency Standard & Poor’s also weighed in on the national conversation about the widening gap between the rich and poor and announced this month that it had trimmed its economic outlook for the U.S. due, in part, to income inequality.