Personal Finance: Rich man, poor man

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Michelle Singletary
Thursday, September 30, 2010; 10:53 AM

"I've been rich and I've been poor. Believe me, rich is better."

The bawdy 1930s actress Mae West may have been joking when she said that, but her words aren't so funny given new figures just released by the Census Bureau that show the gulf between the rich and the rest of America is growing alarmingly large.

The top-earning 20 percent of Americans - those making more than $100,000 each year - received 49.4 percent of all income generated in the U.S., compared with the 3.4 percent earned by the bottom 20 percent of wage-earners.

Three states - New York, Connecticut and Texas - and the District of Columbia had the largest gaps between rich and poor, reports Hope Yen of the Associated Press. At the city level, huge income gaps were found in New York, Miami, Los Angeles, Boston and Atlanta.

The income gap may also be impacting marriage. Sociologists say younger people are increasingly choosing to delay marriage as they struggle to find work and, as a result, put off making long-term commitments.

Here's the thing. We all have to be concerned about this widening gap, even you're doing well. The rich do live better. Compared with the millions living below the poverty line, they have the means to buy healthier food. They have access to better health care. They can pay for their kids to go to college without sinking their household into debt for decades. They can afford housing without plunging their household into debt until they're old and gray.

And while many of us have achieved middle class status, that position, for many, is just a paycheck away from poverty. As many people have learned, they have income wealth but not enough net worth to sustain a long stretch of unemployment or major illness.

"Beyond what Congress can do immediately, it's clear that America needs a broader movement to create a more just and higher-wage economy," writes the Post's Katrina vanden Heuvel. "This devastating economic reality has the potential to create new political alliances -- and shape a 21st-century anti-poverty movement. Such a movement is urgently needed because the voices of the poor, of workers and of those struggling to get by are barely heard in the halls of power these days."

What do you think? The Color of Money Question of the Week: How concerned are you about the growing gap between the rich and poor? Send your comments to colorofmoney@washpost.com. In the subject line put "Rich Man, Poor Man."

Retiring the Retirement Goal

In 1998, 11.9 percent of workers 65 and older remained in the labor force. In 2008, 16.8 percent of seniors kept working past 65.

This year, 18 percent of older workers say they will keep working. By 2018, the Bureau of Labor Statistics projects 22 percent of older workers will still be working, reports CNNMoney.com writer Jessica Dickler in 'I'll work till I die': Older workers say no to retirement.


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