NCPA - National Center for Policy Analysis

Income Inequality Is Rising Under Clinton

October 5, 1998

The increase in income inequality has accelerated under the Clinton administration, says analyst Bruce Bartlett, but the media have ignored or denied it.

  • According to the most recent Census report, the share of total income going to the top 20 percent of households increased from 49 percent to 49.4 percent.
  • And the share going to the lowest 20 percent fell from 3.7 percent to 3.6 percent (see figure).
  • Indeed, the income share fell for every income group except those at the top.

And lest one miss the point, the Census Bureau even provides a summary measure of income inequality called the "Gini coefficient." This is a number between zero and one, with zero signifying total equality (everyone has exactly the same income) and one signifying total inequality (one person has all the income). In 1990, this figure stood at 0.428, rising to 0.455 in 1996 and 0.459 last year. In other words, the increase in the Gini coefficient clearly indicates a rise in overall income inequality during the Clinton Administration.

The trend toward rising income inequality has been going on for a long time and no one really knows the cause. Among the culprits: trade, immigration, the decline of labor unions, welfare, demographics and technological change. A key reason seems to be the increasing value of education and training; those who have them are increasing their earnings, those without are falling further and further behind.

Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis, October 5, 1998.

 

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