‘Defining Challenge’
“The basic bargain at the heart of our economy has frayed,” Obama said in a Dec. 4 speech in Washington. “This is the defining challenge of our time: Making sure our economy works for every working American.”
Democratic lawmakers also intend to press next year for a higher minimum wage to tackle the yawning gap between rich and poor, Durbin said.
Republicans aren’t ceding the issue.
“The American dream is certainly more in doubt than in decades,” House Speaker John Boehner of Ohio said in response to Obama’s speech. “But after more than five years in office, the president has no one to blame but himself.”
Income inequality has been rising more or less steadily since the mid-1970s. The Gini coefficient, a broad-based measure of inequality, stood at a record high last year, according to Census Bureau data dating back 46 years.
Bear Market
The recession actually interrupted the trend and temporarily narrowed the gap between rich and poor. Wealthy Americans were hurt by the bear market in stocks as the Standard & Poor’s 500 Index fell more than 50 percent, while the poor benefited from increased payments from the Medicaid health program and other government programs.
The disparity has widened since the recovery began in mid-2009. The richest 10 percent of Americans earned a larger share of income last year than at any time since 1917, according to Emmanuel Saez, an economist at the University of California at Berkeley. Those in the top one-tenth of income distribution made at least $146,000 in 2012, almost 12 times what those in the bottom tenth made, Census Bureau data show.
Economists have posited a variety of explanations for the growing differences in incomes. Manufacturing companies moved once high-paying jobs abroad, to China and elsewhere. Technological advances led to the loss of clerical and office work, especially relating to routine tasks. The decline of unions -- 11.3 percent of workers were represented in 2012 compared with 20.1 percent in 1983 -- has advantaged bosses at the expense of their employees.