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November 26, 2012

Maine income gap better than most

A new study conducted by the Center on Budget and Policy Priorities and the Economic Policy Institute says that while income gaps have widened in Maine and across the nation between the late '90s and early 2000s, the state's own income inequality is relatively mild.

"Maine's safety net providing temporary assistance to families when they need it most, coupled with critical investments ... in education and health care, have resulted in inequality growing slower here than in other states," says Garrett Martin, executive director of the Maine Center for Economic Policy, a liberal think tank.

However, the report found that low- and moderate-income Maine families did not share in the most recent economic expansion, and warns of a possible widening of the economic gulf.

"Make no mistake: Maine still has a growing gap between rich and poor and recent policy decisions will make it worse," says Martin, citing tax cuts for the wealthy and declining tax relief for modest income families.

The study, "Pulling Apart: A State-by-State Analysis of Income Trends," says the incomes of the richest fifth of Maine households grew by 6.4% while those of the poorest fifth did not grow at all. In the late 1990s, the income of the richest fifth of Maine households was 5.9 times the income of the poorest fifth, but by the mid-2000s that ratio had grown to 6.3. Nationwide, incomes fell about 6% among the bottom fifth of households, on average, while rising by 8.6% among the top fifth.

The 10 states with the smallest income gaps were Iowa, Utah, Wyoming, Vermont, New Hampshire, Wisconsin, Nebraska, Idaho, Maine and Arkansas. The 10 states with the largest income gaps were New Mexico, Arizona, California, Georgia, New York, Louisiana, Texas, Massachusetts, Illinois and Mississippi.

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