While the Occupy Wall Street protests continue across the nation, Democratic U.S. Rep. Keith Ellison believes that people are still confused about the movement’s message. To clarify, Ellison created a brief video to explain what Occupy Wall Street is all about – and that income inequality is among the group’s top frustrations.
“For the last 30 years, the average working American has seen their pay stay flat,” Ellison says in the video as a graph appears beside him. “During the same period, the top one percent have seen their income grow.”
It’s true that the rich have gotten richer by leaps and bounds in the last 30 years and that everyone else has struggled to increase their earnings. But to say that the average American’s pay has been stagnant is incorrect.
The graph that appears in Ellison’s video is from an article in the publication Mother Jones, said Ellison’s spokesman. Using inflation-adjusted data from the period between 1978 and 2008, it shows that the bottom 90 percent’s income has been stagnant over the last 30 years – averaging about $31,000 – and that the top 1 percent’s income has risen dramatically.
But lumping together income for everyone in the bottom 90 percent disguises the fact that lots of people saw income increases in the last 30 years; the data for the 90 percent used by Mother Jones cannot be parsed more narrowly, so the income gap appears more dramatic as a result.
A recent report from the non-partisan Congressional Budget Office, illustrates income inequality more clearly.
– For those in the 81st through 99th percentiles, after-tax, inflation-adjusted average income grew by 65 percent between 1979 and 2007.
– Those in the 21st through the 80th percentiles – the middle of the income scale – saw their average income grow by nearly 40 percent during the same period of time.
– And for everyone in the lowest income percentile, average income grew by 18 percent.
Certainly, those are small gains when compared to the top 1 percent, who saw their income increase by 275 percent between 1979 and 2007, according to the CBO report. And it’s clear that income has grown far slower for those in the lower and middle classes than it has for top earners.
To that end, Ellison’s underlying point that the income gap is expanding is undeniable, said Chad Stone who is chief economist for the Center on Budget and Policy Priorities.
“The one thing that stands out almost no matter how you do it is that huge gains have accrued to the top one percent of households, while growth, to the extent that there has been growth farther down the income distribution has been much slower,” Stone said. “There’s an unmistakable widening of inequality.”
Ellison is clearly correct that the rich have gotten much, much richer in the last 30 years. And his underlying point that the income gap has grown substantially is spot-on.
But a CBO report shows that the first part of his claim, that the average worker’s pay has remained stagnant for three decades, is incorrect.
So, for getting the first part of his statement wrong, and the second part right, PoliGraph is issuing a rarely-used “True/False” ruling for this claim.
YouTube, DFL Rep. Keith Ellison on the Occupy Wall Street movement, Nov. 2, 2011
Mother Jones, Charts: Who Are the 1 Percent?, by Dave Gilson, Oct. 10, 2011
The World Top Incomes Database, accessed Nov. 10, 2011
The Economist, The 99 percent, Oct 26th 2011
The Congressional Budget Office, Trends in the Distribution of Household Income Between 1979 and 2007, Oct. 2011
The Center on Budget and Policy Priorities, Income Gaps Between Very Rich and Everyone Else More Than Tripled In Last Three Decades, New Data Show, by Arloc Sherman and Chad Stone, June 25, 2010
Interview, Chad Stone, Chief Economist at the Center on Budget and Policy Priorities, Nov. 11, 2011