WASHINGTON – The income gap between the richest and poorest Maryland families is steadily increasing, despite a strong national and state economy, according to a study released this week.
The richest families in the state earned nine times more than the poorest families between 1996 and 1998, according to the report released Tuesday by the Economic Policy Institute and the Center on Budget and Policy Priority.
The gap has risen since the late 1970s, when wealthy Marylanders made 6.7 times as much as the state’s poor. It mirrors a 20-year national trend in which the rich have gotten richer and everyone else essentially stayed the same or, in some states, gotten poorer, according to the report.
“Maryland has the lowest poverty rate in the nation, and the second- highest family income,” said Neil Bergsman, executive director of the Maryland Office of Budget Analysis. “But, even though we’re in the greatest economic expansion since the Civil War, there are people who are in great pockets of distress.”
The two liberal Washington-based think tanks that prepared the report based their findings on Census Bureau statistics.
The report found that the poorest fifth of Maryland’s families earned an average annual salary of $17,941 from 1996-`98, an increase of about $753 over their average salaries in the late 1980s. Middle-income families saw their average income rise by $1,540 during the same period, to $59,879, while the wealthiest saw their incomes balloon by $30,930, to an average of $164,816.
Maryland’s gap was slightly better than the national average, with 30 states posting wider discrepancies. New York State had the highest difference in average family earnings, with the rich earning about 14 times more than the poor, while the narrowest gap was in Utah, where the rich earned seven times more than the poor.
One reason the rich keep getting richer in Maryland is because there is more room for growth in jobs that require a higher level of education and skill, while jobs for low-income Marylanders do not have that potential for financial growth, one analyst said.
“The days when it was easy for someone with relatively little education to walk into a factory and get a relatively good paying job are over,” said Nick Johnson, senior analyst at the Maryland Budget & Tax Policy Institute, of the Maryland Association of Nonprofit Organizations. “There aren’t as many good- paying jobs for a large portion of the work force.”
Maryland’s low-income families hold a large number of jobs in restaurant and retail industries where there is not much room for financial growth, Johnson said. It is becoming increasingly difficult for minimum-wage earners to make large financial gains as inflation rises, he said.
But critics said the report presents a distorted picture.
“There are many things that EPI and CBPP did not take into consideration,” said Mark Wilson, a research fellow at the conservative Heritage Foundation in Washington. “They tend to shade the description of their analysis in ways that support their legislative agenda.”
Wilson said the report focuses on family income, but “all families aren’t equal.” Many of the poorest families are run by single-parents, he noted, while wealthier families tend to have two breadwinners.
He also said the report ignores the fact that many of the poorest fifth are retirees on fixed incomes so, naturally “[their salaries] will appear to stagnate.” And supplements to the poorest in the state, like food stamps, are also ignored in the report, said Wilson.
“While there is supposed to be equality under the law, God did not create us all equally,” Wilson said. “As a result, there is also going to be a dispersion of income along those lines.”
But while the report did not include income assistance like food stamps for the poor, Johnson pointed out that it also did not include capital gains earned by the rich on stocks, bank holdings and property.
While there has been growth in income for the poor, largely due to a slight minimum wage increase and a growing economy, it can be wiped out in the blink of an eye, he said.
“The gain that we have seen over the past two years is so small, that it would be wiped out immediately if we were to experience any type of recession,” Johnson said.