Income study: Gap widens between rich, poor in Nevada

Benjamin Grove

Tuesday, Jan. 18, 2000 | 11:04 a.m.

WASHINGTON -- The gap between the richest and poorest Nevada families has widened in the past two decades, according to a new study released today.

The study found the divide between haves and have-nots expanded in 46 states and suggests that the nation's strong economic growth has not been shared equally by low-, middle- and high-income families.

The study was conducted by two liberal Washington-based groups, the Center on Budget and Policy Priorities, a nonprofit research and policy institute, and the Economic Policy Institute, a nonprofit think tank that studies how to achieve a "fair" economy.

The study, called "Pulling Apart: A State-by-State Analysis of Income Trends," used pretax income figures adjusted for inflation from the Census Bureau annual population surveys of 50,000 families.

The study ranked families according to their income level and then divided them into five groups with an equal number of families.

In Nevada, the families in the richest fifth had average incomes 8.5 times higher than families in the poorest fifth. That's a bigger gap than 20 years ago when the richest families made 6.5 percent more money than the poorest fifth.

The study found the poorest fifth of Nevada families make 5 percent less than they did in the late 1970s, dropping to an average $15,630. The richest fifth make 24 percent more than they did during the same period, an increase to $132,300.

That sounds accurate, Tom Carroll, UNLV economics department chairman, said. Nevada service workers make roughly the same amount, or less, than they did 20 years ago, he said. He said workers also have less union protection, so wages tend to be lower and benefits may offer less.

"The upwardly mobile are much better off," Carroll said. "The under-educated, under-motivated, less-mobile worker tends to be worse off."

The study also found the average income of the middle fifth of Nevada families decreased by $1,200 between the late 1970s and late 1990s to $45,830.

"The old phrase that a rising tide lifts all boats is not a good analogy for today's economy," Carroll said. "It's more like a tidal wave."

The American dream is more like a "nightmare," for poor families, said Bob Fulkerson, director of the Progressive Leadership Alliance of Nevada. The alliance is a coalition of 40 groups including labor, women, nurses, Hispanics, civil rights and educational advocates.

"(The study) just shows that the marginalized population, the vulnerable, those in poverty don't have a voice in government," Fulkerson said. "Not only are things not getting better, they are getting worse. These are people in poverty despite work. That's un-American."

Fulkerson said state and federal government leaders need to pay more attention to getting poor families better access to education and health care.

"This is a stinging indictment of the economy," Fulkerson said. "The wealth is being created at the expense of the poor."

For the nation as a whole, the richest fifth of families made more than 10 times the poorest families, a larger gap than in Nevada.

New York had the largest margin between rich and poor, with the wealthy making 14.1 times more than the poor. Utah had the narrowest gap, with the rich making 6.9 times more than the poor.

The survey said that, in general, wages at low-paying jobs nationwide simply have not risen as quickly as wage increases in high-paying jobs and have not kept pace with inflation.

The study also says recent dips in unemployment as well as minimum wage increases have caused the gap between rich and poor to grow more slowly.

The study did not include capital gains, which boost the incomes of wealthy families. The study also did not include families with a single parent.