WASHINGTON -- What follows is for the benefit of the economically smug, the financially complacent, the politically myopic:
Since 1977, the average household income for the least well-off fifth of the American public - after taxes and inflation - has gone down, by nearly 10 percent.
Over the same neatly bipartisan period -- Carter and Clinton, Reagan and Bush -- the average household income for the middle fifth of the populace - after taxes and inflation - has risen all of 8 percent, or a whopping 0.5 percent a year.
Also since '77, the average household income for the best-off 1 percent has more than doubled, up by 115 percent. What goes for income, moreover, goes nearly double for wealth.
As of 1995, the last year for which full Federal Reserve numbers are available, the top 20 percent of households, while receiving more than half the after-tax income, were holding 84 percent of the wealth - meaning stock portfolios, home equity and the like.
The bottom 80 percent owned 16 percent of the wealth. That was less than half the wealth owned by the wealthiest 1 percent.
The 1-percenters, while getting 13 percent of all the household income, were holding a share three times as large in assets. And all these numbers on the concentration of wealth showed a larger set of disparities than at any time since the Depression.
These numbers, as well as others, were disgorged over the weekend by the Center on Budget and Policy Priorities, the economic analysis shop for progressives, but an odd bird famous for using conservative data that shreds conservative myths. The household income numbers come from the Congressional Budget Office, and are the most broadly defined around for both the rich and poor; the wealth information is from a study compiled from raw material at the Fed's surveys of consumer finance.
According to Bob Greenstein of the Center, there are at least three analytical conclusions to be drawn just five months before the economic expansion of the 1990s becomes the longest period of uninterrupted economic growth ever:
The growth, to put it extremely mildly, has been very uneven.
The gaps between rich and poor, between middle-class and rich, are as wide as they have ever been in our statistically recorded history.
Tax cuts benefiting the already well-off, along with wage erosion hurting those who already struggle, have been at the causative center of the trends.
Isaac Shapiro, Greenstein's co-author on the study, makes an additional point: The CBO's conservative projections for this year strongly suggest that the continuing expansion and the tax cuts in the 1997 budget agreement will act to widen the income and wealth disparities.
The changes were much sharper during the fiscally insane '80s. But the data show that the positive changes in the '90s (tax increases on the very wealthy, a huge expansion in the earned income tax credit for the working poor, a higher minimum wage after 1996, and the tax credit for families with children) did not stop the trend. On taxes alone, the study shows that for the top 1 percent of households, the average tax cut received since '77 was worth $40,000-plus. That is nine grand above the entire, after-tax income for the average household in the middle-fifth of the spectrum today.
During 1999, in other words, the widened income disparity is such that the best-off 1 percent will have as much after-tax income as the bottom 38 percent combined; that 2.7 million people will have the same combined income as 100 million people. The mere rise in income at the top will exceed the total income of the bottom 20 percent.
Beyond taxes and the explosion in asset values, Greenstein also points at two developments that have clearly hurt the poor considerably: the erosion in pay from downsizing, job-exporting, and a largely stagnant minimum wage; and the plunge in the value of welfare assistance in the late '70s and early '80s because of high inflation and the cruel nonresponses from the states.
The latest statistics also have obvious political and policy implications. The most obvious:
There is no justification, none, for even a dollar more of rich-tilted, across-the-board income tax cuts.
To would-be Reform Party convert Pat Buchanan: Your famous brigades need more than pitchforks and protectionism. They need more income, starting with a higher minimum wage.
To Bill Bradley and especially Al Gore, to celebrate the economy is to celebrate numbers more than reality. The reality is that most households have to struggle simply to get by. What has happened in the '90s is in many respects a miracle, but it is also just a start. Also, to focus too much on policy topics like health insurance availability and poverty among children is to take a commendable detour, but still a detour. The bigger issue is economic security for working families. Big thinking is what's called for.
Thomas Oliphant is a Globe columnist.
