Post User Polls

What is to blame for the rise in income inequality?

Rising income inequality has led to the top 10 percent of households receiving virtually all of the benefits of economic growth since 1976, columnist Steven Pearlstein writes. Which factor do you think is most responsible for the dramatic rise in income inequality?

By Andrea Caumont  |  October 6, 2010; 10:15 AM ET  | Category:  National Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   StumbleUpon   Technorati  
Previous: Is a national moratorium on foreclosures a
good idea?
| Next: How much do you value nurses?


Please email us to report offensive comments.

How about education? Not enough people have the right education to compete for jobs in the information economy. This drives up the pay for jobs in these sectors while suppressing pay in the other segments.

Posted by: two-cents | October 6, 2010 10:46 AM

I didn't vote because the correct answer wasn't an option. It's tax rates which encourage the rich to keep more and pay their employees (or the employees of corporations in which they own shares) less.

Posted by: fingersfly | October 6, 2010 10:49 AM

You're missing a factor in your poll, or it's not well defined. The biggest factor responsible for the dramatic rise in income inequality is the failure of the House to propose and maintain tax bills to mitigate those inequalities, as well as the Senate's failure to approve those taxes, and the President to sign them into law.

Which really isn't surprising as most of those people filling those roles are the very ones who would be taxed.

Realistically, and as crazy as it sounds, the Constitution needs to be amended to make approval of tax law subject to the popular vote. The political system is so biased in favor of the rich that it is effectively impossible for the lower and middle classes to exercise any form of check and balance on government spending.

Posted by: mhoust | October 6, 2010 10:50 AM

The same thing has been happening across the developed world, including those European countries that far-right Americans consider "socialist". Even the life-expectancy gap between rich and poor is growing - even in countries with "socialised medicine" like Britain.

What's more, it's an absolute mathematical certainty that the gap between rich and poor in the US will be bigger at the end of Obama's presidency than at the beginning. So if he is a communist or socialist, he's a remarkably ineffective one. Wealth continues today to accumulate at the top, as it has done under every president for 40 years.

Posted by: bourassa1 | October 6, 2010 10:53 AM

Inadequate Job skills-directly related to Education, in the broad context of Globalization.

Lack of interest in acquiring skills among younger generation

Posted by: jayrkay | October 6, 2010 11:00 AM

The inability to sacrifice and avoid debt will always keep the middle class and lower class where they are at. You cannot save money if you owe money and every dime you spend on interest goes to wealthy bankers, executives and shareholders.

Posted by: GenXer1 | October 6, 2010 11:04 AM

If you are poor, it's your own fault. Should have stayed in school, kept your legs closed/your thing in your pants, and had a little more initiative in life to do better.

Not saying you'll get rich, but, you'd be better off.

Welfare is there to HELP you, it is not supposed to be a lifestyle.

And this idea of opportunity not being bad do you want it? Apparently some people don't want it bad enough.

Posted by: r_leever | October 6, 2010 11:06 AM

Laziness and expectations that the govt or someone else will prvide them a job that pays well.

Folks need to get off their lazy butts and go to school 4yr college, 2 yr college or trade school it doesn't matter.

A journeyman level auto tech at Mercedes, BMW, Lexus, Acura or range Rover dealer in DC area gets half the labor rate which these days is well over $100 a hour. The car makers will pay for your training. Two years training and after a few years you are making over $120k w/o OT and no studnet loans like your law school friends.

Join the military as enlisted. There are several MOSs that after you get out out after 4 to 6 years pay over $100k.

Get off your lazy butts. No one else will do it for you. I did. If I can do it anyone can.

Posted by: sheepherder | October 6, 2010 11:06 AM


Posted by: rcubedkc | October 6, 2010 11:10 AM


Posted by: topwriter | October 6, 2010 11:11 AM

I honestly don't know the real answer to this. But I guessed globalization. That's because engineers used to be a staple in the American middle class. Now look at what's happening. Engineers can't find work with their expertise and can't find other work at the level of pay they are accustomed to receiving. There are plenty of other people around the world who know engineering and don't need the same pay as Americans because their cost of living is drastically lower. That's why I guessed globalization. Companies can hire anyone from anywhere with any pay.

Posted by: forgetthis | October 6, 2010 11:14 AM


You hit the nail square on.

Posted by: adrienne_najjar | October 6, 2010 11:18 AM

Opinions expressed deriding the well off as being greedy or deserving higher taxes is pathethic. It is not a moral fault to make money, nor should people be envious of those who have succeeded in their endeavors. It is the well off and successful who create the jobs in this country not the Government. The Government only takes thru taxes and redistributes revenue. Redistribution creates dependency and then the death spiral begins.

Posted by: petespagnuolo | October 6, 2010 11:28 AM

Its all of these, its also the Tax issues, derivatives being unregulated. The housing bubble and rent bubble are a big cause too, especially on the east coast where homes have gone up in value 7 fold over the past 20 years and average salaries have gone up significantly less.

Posted by: alex35332 | October 6, 2010 11:34 AM

I would love to see a study proving that the bush tax cuts created any jobs.

Posted by: alex35332 | October 6, 2010 11:35 AM

Corruption of Government, specifically tax rates.
If a hedge fund manager/capital gains pays 15% or less, and my wife the teacher of learning disabled kids pays 30% it seems to be simple math.

Posted by: lother | October 6, 2010 11:36 AM

How long did Americans think they could have Urban high school drop out rates at or near 50%? Or a generation of youth (18-24) of whom 75% are considered "unfit" for military service? And the fact that less than 50% of American audlts read for pleasure? Or vast numbers of citizens who are ignorant of routine citizenship knowledge?

In a globalized knowledge worker world, the uneducated, unlettered and unmotivated are surely screwed. The only way Democracies really change is via a crisis. Except this time it's too late. 10's of millions of poorly educated/working class/low skilled people will be washed away around the world in the coming decade. The "American Dream" is an anachronism.

Posted by: mewcomm | October 6, 2010 11:38 AM

There has been a gap between rich and poor for ten thousand years. It used to be because people stayed in their social class. Now it is possible to move up-or down.
Actually, whether you get parents who care and have expectations for you, or get parents who could not care less is a crap shoot.

Posted by: leslieswearingen | October 6, 2010 11:54 AM

As others have pointed out its the tax laws which for some reason was not an option in the poll.

Posted by: metroman76 | October 6, 2010 11:54 AM

I work at Comcast.

We are relentlessly off-shoring jobs to "cut costs".

Yet our executives earn over $30,000,000 a year.

You figure it out...

Posted by: beenthere3 | October 6, 2010 12:11 PM

You left out tax cuts. Progressive tax rates mitigate income inequality.

And if anyone still believes that the richest people must be the most productive (because they have the most money,) look around you. Does Paris Hilton work harder than a farm worker or construction worker?

Posted by: Glassyeyed | October 6, 2010 12:54 PM

I couldn't vote for any of the choices, pure greed wasn't one of them.

In 1985 my union was told that our world renowned wire company could no longer afford to give us anything and work with the rules the union had earned over the years. We gave concession after concession which cut the work force from over 800 to 300 and we produced even more than before. It still wasn't enough. The CEO toured the plant in 1987 and pointed to a worker's sandwich and said that he was going to make it so that we wouldn't be able to afford to put meat between the bread. A few weeks later we went out on strike as they cut retirees' pensions in half. It was the year of breaking unions, thanks to St. Ronnie of the Trickle Down. So eventually management hired scabs and continued to suck every drop out of the company. And then they packed it up and shipped it overseas in search of even more money.

My town is a dead one now, we have low paying service jobs in warehouses, and Walmarts. Prisons and hospitals are the only places to make a decent living wage. And now even they are coming under attack. Yet the corporations that sailed away make record profits. Greed has brought us to today, we are living in a country crumbling while China rises.

Posted by: AverageJane | October 6, 2010 1:25 PM

The poll assumes too much. Also, one can hardly limit the reason for income inequality to a single factor.

Several factors are at work:

1) Ronald Reagan and his deficit spending tax cut nonsense, which persists to this day.

2) Globalization.

3) K Street and its ownership of our government.

4) Out sub par public education system.

Posted by: John991 | October 6, 2010 3:39 PM

Do you think the fact that there's been no economic growth in 10 years has anything to do with it? One can debate whether or not it's fair to blame Republicans, but they were in charge for most of that time while most people got poorer. Think about that when Republicans claim that they're good for business.

Posted by: DaveHarris | October 6, 2010 3:51 PM

None of the above

Look at drop-out rates, the declining quality of education and ultimately...teacher's unions.

Education reform, remove political correctness and teach needed reading, writing, science and math

Liberalism has failed.

Posted by: georgedixon1 | October 6, 2010 3:55 PM

Agreed didn't vote, really do not see anything to blame it is what it is you can choose to be rich or choose to be poor. I guess more people nowadays want to be poor.

Posted by: dctax4u | October 6, 2010 4:14 PM

How about having an extra 11 million low-skilled illegal immigrants in the country pushing wages down? Even when our economy was expanding nicely, the unemployment rate for low-skilled workers was very high and their wages were stagnant or declining. While high-skilled workers had an extremely low unemployment rate (1.8%) and their pay increased significantly. If we had an intelligent immigration policy, we would remove the low-skilled workers and import a few million high-skilled workers. Scientists, engineers, doctors, nurses and teachers -- we need them desperately. They are out there and would love to come here, but we don't let them. If we did this, our employment rate would skyrocket and so would our economy.

Posted by: trazom56 | October 6, 2010 4:48 PM

Reaganomics, the Contract to Rape America, and 8 years of Chimpy

Posted by: alarico | October 6, 2010 4:49 PM

I am part of a sucessful small business. My partners and I are by no means rich, yet would be considered so by Government tax rates and probably by many of you who have commented. We are not greedy, or immoral. We do not try to influence the Government in any way. We do what we do, make money in the proscess, and we employ about a dozen people in jobs that pay them well. The shortest termed employee, in fact, has been with us for nearly ten years, so he must be satisfied with his compensation.
If our taxes were raised, or I should say when our taxes are raised, we will have two choices. We can pass the added expense along to our customers. The problem with this is that we will most likely lose customers, and thereby lose profit and put our company at risk. Or, we can fire one or more employees.
I am sure there is someone out there saying "Or, you could pay yourselves less you greedy capitalist pig!" To you I would say, "Why should I?" Why should I work my butt off for twenty years, take risks, sometimes fail, sometimes succeed, and not reap the rewards of my hard work and talent? Would it have been better that we not start this company, employ hundreds of people over the years, and create product that has benefitted many? I could have worked for the Government, like many people I know, who are now retired at age sixty, collecting pensions nearly equal to thier full salaries, while never having created a single job for anyone else.
In the end, we need sucessful people to make society work, and some sucessful people are going to make a lot of money. The idea of taking that money from them and giving it to less sucessful people will remove the incentive people like me have to work hard and take risks. It is also a profoundly materialistic idea - that simply giving poor people money will make thier lives better. What will make thier lives better is education and the motivation to suceed. That motivation will be greatly reduced if the Government takes 74% of thier income, and dosen't allow them to leave anything to thier children.

Posted by: David90 | October 6, 2010 4:55 PM

In most cases I would blame the inequality on the individual. Though I know environment makes a large difference. Obviously the offspring of a weatlhy family is going to start with an advantage, the best schools the best of everything and more than likely the best of influencial contacts. But for regular people, and the majority of Americans, it is a matter of education and hard work. I feel no remorse for suceeding more than many of my fellow high school classmates. I worked my way through college, earned a BA, a MEd and a MBA (thanks to the GI Bill). I have worked 24 hour days and many weekends and holidays. I adhere that the Constitution grants us one major right, to pursue our happiness. To me that one statement says it all. We have to pursue our dreams and that means hard work and dedication. Do I feel bad because a son or daughter of a Harvard grad dets legacy rights to attend Harvard. No I don't even John Kennedy knew the world was fair. So your poll is bogus for me because you left a key individual to "blame" off your list -- the individual.

Posted by: staterighter | October 6, 2010 5:03 PM

Sorry I meant to say that even John Kennedy knew the world WAS NOT FAIR.

Posted by: staterighter | October 6, 2010 5:06 PM

In most cases I would blame the inequality on the individual. Though I know environment makes a large difference. Obviously the offspring of a weatlhy family is going to start with an advantage, the best schools the best of everything and more than likely the best of influencial contacts. But for regular people, and the majority of Americans, it is a matter of education and hard work. I feel no remorse for suceeding more than many of my fellow high school classmates. I worked my way through college, earned a BA, a MEd and a MBA (thanks to the GI Bill). I have worked 24 hour days and many weekends and holidays. I adhere that the Constitution grants us one major right, to pursue our happiness. To me that one statement says it all. We have to pursue our dreams and that means hard work and dedication. Do I feel bad because a son or daughter of a Harvard grad dets legacy rights to attend Harvard. No I don't even John Kennedy knew the world was not fair. So your poll is bogus for me because you left a key individual to "blame" off your list -- the individual.

Posted by: staterighter | October 6, 2010 5:07 PM

If there are 100 apples on an apple tree and a hundred people want them, but 10 folks already have 30 of them, then that means there are 70 left for the other 90 people. That's wealth in a nutshell. And logically speaking you can't have wealth without the other extreme, poverty; i.e. if we say "wealthy" is someone who makes a million, and everyone makes a million-then who's really wealthy? So there is this myth that is perpetuated by those who are already wealthy-that you too can be as wealthy as they are....if you buy their products or subscribe to their philosophy of how we should treat wealth (e.g. tax breaks that benefit the wealthy).

The poorer people become, the more resources there are available for the wealthy. So, it's no surprise that, as a recent studies have illustrated, the ranks of the poor have grown while the rich have become richer-even during these so-called "economic hard times".

Likewise, if you're a, Coca-Cola for example, you know your main competition is Pepsi, which is good, because you can, at some level, collude on prices: it isn't like you're going to sell your can of coke for 75-cents and Pepsi is going to reduce theirs to 70 cents to be more competative against you. No-you both understand that you'll both set the maximum price that a consumer is willing to pay-thus you can spend all your resources in distinguishing youself from the competition (via advertisement) to get consumers to buy your product instead of improving quality. But if another player comes in, say "RC", you're going to want to limit or consume her market share so you and Pepsi can maximize each other's profit...that's just greed. You can do legal things like offering stores free delivery of Coke products if you don't offer RC cola to be sold next to your products. Otherwise, you'll charge for shipping. Yes, the wealthy have worked hard for their money too, but the majority already had a leg up before you knew where yours were at. Saying that, fairness does not necessarily equal righteousness, as in "it's not fair that I give an old lady a seat in the bus when I got there first, but it's the right thing to do". So, for the sustainability of all of society, who is it that keeps the wealthy in check to make sure they don't grab all the apples on the apple tree, as-it-were? Us, the middle-class and poor citizens, the majority, through-our-government-that's who. And that's why the wealthy doesn't like "big government"-government represents us who just want a slice of apple, but ain't tall enough to reach it. Not fair to the rich, but the right thing to do. Just like a firefighter putting out a house fire even though the homeowner didn't pay thier dues.

Posted by: callosumlink | October 6, 2010 5:21 PM


A standard right wing talking point is that tax cuts for the rich and corporations create jobs.

This is, actually, true. They create jobs overseas.

The tax cuts’ two bills, in 2001 and 2003 – changed laws so that personal income tax rates were reduced, exemptions for the Alternative Minimum Tax increased, and dividend and capital gains taxes also cut.

Yet in the debate, it seems of no moment to either side whether the tax cuts were effective in achieving their goal of spurring business investment and making the US economy more competitive.

Our own examination of US non-residential investment indicates that the reduction in capital gains tax rates failed to spur US business investment and failed to improve US economic competitiveness.

The 2000s – that is, the period immediately following the Bush tax cuts – were the weakest decade in US postwar history for real non-residential capital investment.

Not only were the 2000s by far the weakest period, but the tax cuts did not even curtail the secular slowdown in the growth of business structures.

Posted by: tinkabell1 | October 6, 2010 5:21 PM

This would have been John Lennon's 70th birthday. Lennon, who in one of my personal favourite songs said
"Imagine no possesions - it's easy if you try"
became an American citizen to avoid England's excessive tax rates in the 1970's. If even a commited Socialist like he left his native country to avoid giving all of his earned wealth to the Government, what is to stop the successful in America from moving elsewhere? Then who will pay the taxes?

Posted by: David90 | October 6, 2010 5:37 PM

RepubliCONs TREASONOUS votes against America and their constant OUTSOURCING American jobs overseas to other countries. RepubliCONs history proves this by their "Exploition of Man-kind for a PROFIT, hence slavery again in 2010!

If RepubliCONs choose to dispute this, EXPLAIN WHY America has lost NOW over 20 MILLION jobs under the GOP from 2001-2010 as they, GOP congress, has voted, NAY, AGAINST America to removing subsidies to OUTSOURCING Corporations of American jobs.

Posted by: governmentcorruption | October 6, 2010 6:11 PM

Income discrepancy and Middle class being decimated is caused by things your poll does not mention:

NAFTA, H1 visa program, illegal invasion, Great Society Welfare programs since 1964; converting SS into a PONZI scheme, trial lawyers, the breakdown of the two parent family, over taxation at the Fed and State level, union contracts and benefits that cannot be sustained and a centralized government that has failed to limit it's authority to the it's enumerated powers.

Posted by: pcrudy | October 6, 2010 6:46 PM

The increased power of financial markets over real business is a fantasy. But, the kind of attitude the President exhibits when he pushes financial incentives for teachers is a factor. So is the attitude towards celebrity that rewards a few star athletes with huge salaries. Another factor is the increased presence of the financial sector in our economy and the very unequal rewards that come to those who are successful speculators in financial markets. But the biggest factors are the changing nature of work and the diminished competitiveness of the American economy. Unions have declined because there is less work for their members and because foreign workers and non union workers in America are willing to do better quality work for less money. In part, the trend simply reflects real differences in the value to our economy of different people's work. But, in part, it also reflects differences in effectiveness at social competition. When the labor of unskilled workers is a strong requirement for the economy to function, those laborers have a bargaining chip that they understand how to use. But as politics and social competition become bigger factors in dividing up rewards, the less skilled and less educated tend to lose out because they are less effective at the competition. Another big factor in the failure of the union movement has been its inability to ever get beyond a very narrow agenda of demands for more perks for its membership. That kind of failure severely limits its political effectiveness even when a particularly favorable administration like the present one comes along. It also fragments the working class and leads to a situation like the present one where the votes of white workers are likely to be a critical factor for the Republicans in the coming election.

Posted by: dnjake | October 6, 2010 7:12 PM

Some people missed the fact that this was about GROWING income inequality, i.e. those at the top own an increasingly larger share of the total wealth and that wealth translates into political power which creates more wealth for the already wealthy. That is a recipe for financial calamity and we have only to look at the graphs in the accompanying article showing the history of wealth accumulation which is always followed by an economic crisis. The working classes are the economic fuel and when they can't spend (or use credit) the economy tanks. DUH!

Posted by: fingersfly | October 6, 2010 8:31 PM

It's obvious from your poll results that the majority of the respondents are pretty left-wing. The reason for the high unemployment is technological change. I remember back in the fifties when I was a young boy. All the science-fiction mags told stories of the machines taking over. It was looked on as a good thing. Only problem, no one figured out what the humans would do to earn money!

Posted by: jibe | October 6, 2010 8:33 PM

I chose "A change in how much equality is socially acceptable," but I could have chosen any of the six, since the real answer is "all of the above."

Posted by: andym108 | October 6, 2010 8:38 PM

Tax Cuts = Job Cuts.

Here's an example: Congressman Fred Upton. R-Michigan is an heir to the Whirlpool Corporation fortune. He makes more from his trust fund than his congressional pay.

He promises the Bush Tax Cut will create jobs. There are no job increases; instead thousands lose their jobs. Fred makes a bundle, he pays fewer taxes and home values in his district plummet because those who lost their jobs had to move.

Then there are the poor suckers who are working 80+ hours a week to make up for what the laid off people used to do.

We are actually paying the wealthy to cut jobs. We need to take away that incentive.

Posted by: colonelpanic | October 6, 2010 9:18 PM

I find it amazing that so many see wealth as a zero sum game, i.e., if I have more, you must have less. The economy simply doesn't work that way, it's not like dividing up a pie. What drives down middle class wages is companies having to compete in a global marketplace where workers in other countries will, and can do the same work for less than the domestic labor force. The only people doing well are those creating intellectual capital or investing in those that do. Technological advances, like cnc machining are dramatically reducing the need for skilled labor but we have not moved far enough to have found work for the millions displaced. Over time things will improve, but the old model of the middle class has been seriously disrupted, though it is no fault of the economic winners.more govt employment or subsidy does nothing but slow the transition to whatever new model comes along, and exacerbates some problems by absorbing 40 to 50% of GDP when it used to be 20%. we need tremendous private sector capital investment harnessing technology but the govt is pulling too much cash out of circulation. Populist jealousy of winners wealth is just a political ploy to confiscate wealth and give bureaucrats more power.

Posted by: hdc77494 | October 6, 2010 9:39 PM

I couldn't vote in the poll, because all of the listed answers are significant factors in the rising inequality which is killing the American middle class. The biggest factor, however, which underlies everything else, is that the obscenely rich and multinational corporations have bought and paid for our government. This means that our fine public servants have been enlisted in the class war which has been and is being waged by the rich against the rest of us; of course the rich are winning and we're not permitted to talk about that.

Posted by: ejs2 | October 6, 2010 9:44 PM

Couldn't agree more with EJS2. Having lived in rural WV and now in rural Vermont. I see what big business moving the jobs overseas and big Agro ruining family farms has done to the landscape. I see as much poverty in rural America as I did when I was an inner city teacher.

Posted by: mountainsister41 | October 6, 2010 10:13 PM

The rich have made their wealth on the backs of the middle class. Once the middle class is gone the demise of the wealthy is not far behind.

Posted by: marcchagall2 | October 6, 2010 11:17 PM

DAVID90 wrote:

"I am part of a sucessful small business..."

"The shortest termed employee, in fact, has been with us for nearly ten years..."

"If our taxes were raised, ... We can pass the added expense along to our customers. Or, we can fire one or more employees."

"That motivation will be greatly reduced if the Government takes 74% of thier income, and dosen't allow them to leave anything to thier children."
Great post, Dave. I pasted a few of your major points here. I want to keep the context and comment on them. People can read your full post above if they like.

Here's some points.

1) Your shortest term employee has been around for about ten years? That means you didn't hire anybody when you got your tax cut. You understand that was the deal: We give you the tax cut, you hire?

2) You say if/when your tax cut is repealed you'll have to get rid of somebody. Hmmm. You didn't hire with the cut, but you'll have to fire if we repeal the cut? Sounds fishy. Or, it sounds like you got less efficient and used the tax cut to pad your books and make yourself look profitable. That's my hypothesis, Dave; tax cuts made business people lazy. They didn't have to work as hard to make the same amount of money. And that's what I see in your story.

3) If taxes went to 75% incentive to work would be greatly reduced.

OK. Let's go back to a time when taxes were that high, or higher.

Did Neil Armstrong say, "That's one small step for man, one giant leap in my tax rate?" We put a man on the moon before Reagan. Do we do great things like that any more?

High taxes didn't keep Steves Jobs and Wozniak from inventing the personal computer industry.

They didn't keep Jack Kilby from inventing the microchip, did they?

Or Drs. Jonas Salk and Albert Sabin from developing their polio vaccines? Hey remember when tax dollars funded research at hospitals and universities that cured real diseases? And we didn't have to rely on big Pharma for pills for invented ills like "Nervous Leg Syndrome?"

Remember at high tax rates Bill Gates founded and grew a software company that made him the richest man in the world.

In 1962, when marginal tax rates were sky high, Warren Buffett became a millionaire and founded Berkshire-Hathaway.

Both Buffett and Gates argue for higher tax rates on high incomes.

Finally, in the 1950s, "The Golden Age of Capitalism" when tax rates were at their very highest, General Motors was the world's biggest employer. Now, after the Reagan and Bush tax cuts they are begging for money.

Tax cuts have made business people lazy and inefficient.

I think its time to go back to a time when people valued greatness and integrity instead of money.

I had cancer surgery last year, Dave. I picked the surgeon who wanted to save my life, not make more money.

Posted by: colonelpanic | October 6, 2010 11:23 PM

Didn't vote the answer is not listed. There are many contributing factors from society to economics. Lately it is the regulations on everything to the extreme that has made it more difficult for anyone to succeed. As well as the itemized taxation to groups or products rather than general universal taxation equal to all.

Posted by: jaclk | October 16, 2010 10:46 AM

The comments to this entry are closed.

RSS Feed
Subscribe to The Post

© 2011 The Washington Post Company