A new report released this week by Center on Budget and Policy Priorities analyzes state income trends and highlights significant disparities in growth rates since the 1970s.
Nationally, the report found that higher income households have seen substantial income growth while those in lower and middle income households had experienced only modest gains. Households of all income levels experienced losses during the recent recession, but higher income households have started to see growth again while middle and lower income households have not.
In Nebraska, the report found that the late 1990s to the mid 2000s were essentially a “lost decade” for income growth for lower income families. There was no significant income growth for the poorest Nebraska families while incomes among the top earners grew 7.4%.
The report also found that the richest 5 percent of Nebraska households have average incomes 10.1 times as large as the bottom 20 percent of households and 4.0 times as large as the middle 20 percent of households.
In spite of stagnant income growth for many families over this time period, the cost of goods and services has continued to increase, making it more challenging for lower and middle income working families to meet their basic needs.
The report offers a series of recommendations including raising the minimum wage, making tax systems more progressive and strengthening the safety net.
As we consider potential budget cuts and tax proposals, it is important to keep this information in mind. What would budget cuts to critical work supports like child care on both the state and federal level mean to families whose incomes have not been able to keep pace with increasing costs? And how would an increased reliance on sales taxes impact consumers who are more likely to spend more of their incomes on consumable goods?
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