NC Budget and Tax Center

Prosperity Watch: Rising economic growth fails to lift all boats

All too often, we hear the comforting notion that when it comes to economic growth, a “rising tide lifts all boats”–that a growing economy benefits everyone through rising incomes. As the latest issue of Prosperity Watch makes clear, however, the reality of North Carolina’s economic growth has exploded this myth for far too many families in the state. Despite steady growth in Gross State Product–the total value of all the goods and services produced in North Carolina–median household income has actually declined since 2004, suggesting that the rising tide of growth is leaving too many families alone to sink. See the latest issue of Prosperity Watch for details.

4 Comments

  1. Alex

    November 7, 2013 at 7:21 am

    Recent article about income growth in the US :

    “US income inequality grew four times faster in the first three years of the Obama administration than under Bush, according to figures published Saturday in the New York Times .
    The Times reached this conclusion by comparing the median wage—which measures the income of a household in the middle of the income scale—and the average wage, which tallies all income and divides it by the number of earners. As society has grown more unequal, the average wage has grown relatively more quickly, while median wages have grown more slowly, and stagnated in real terms.
    This is exactly what has happened. As the newspaper reports, “From 2001 through 2008, during the George W. Bush administration,” the ratio of mean (average) to median income “grew at 0.28 percentage points per year. From 2009 through 2011, the latest year for which the data is available, the ratio increased 1.14 percentage points annually, or roughly four times faster.”
    These figures add to earlier studies showing that growth in income during the so-called economic “recovery” has gone almost exclusively to the wealthiest layers of society. A study released earlier this year, entitled “Striking it Richer: The Evolution of Top Incomes in the United States” by University of California, Berkeley economist Emmanuel Saez, shows that since the recession was officially declared to be over in 2009, 93 percent of all income gains have gone to the top 1 percent, while the incomes of the rest of the population have remained stagnant.
    According to the study, since 2010 the top 1 percent of society has seen an income growth of 11.6 percent, while the rest of the population’s incomes have grown by a dismal 0.2 percent.The so-called economic “recovery” has led to falling wages, speedup and more casualized labor. The jobs which have accounted for the majority of employment since the end of the recession have been composed mainly of part-time and low-paying service industry work.
    According to data from the Bureau of Labor Statistics, in the period from June to July of this year, over 148,000 full-time jobs were eliminated, while in their place over 534,000 part-time positions were added.”

  2. gregflynn

    November 7, 2013 at 9:53 am

    You missed a line from the bottom of the original article:
    “Copyright © 1998-2013 World Socialist Web Site – All rights reserved”

  3. Alex

    November 7, 2013 at 1:27 pm

    The numbers tell the story greg !

  4. gregflynn

    November 8, 2013 at 10:03 am

    I’m just so happy you recognize income disparity as an issue.