Editorial: Rich and poor (Rutland Herald)

Economic inequality is growing faster in New England than in any other region of the nation.

That's according to a report by two economists from New Hampshire in a publication of the Federal Reserve Bank of Boston.

Overall, New England is doing well economically in relation to the other states. Connecticut, Massachusetts and New Hampshire number among the top six in the United States for per capita and median household income, according to the others of the study. Vermont and Rhode Island are at about the national average.

And poverty is low in New England. New Hampshire, Vermont, Connecticut and Massachusetts are among the eight states with the lowest rates of poverty; New Hampshire is the lowest.

Nor is the region's income inequality great in relation to the nation as a whole. Income inequality in the region is at about the national average. But that ranking represents a dramatic change. Between 1989, when inequality in the region was low, and 2004, inequality rose faster in New England than anywhere else.

The numbers for New England give a picture of the kind of changes that have been experienced elsewhere in the nation. Average household income for the lowest-income 20 percent of the population actually fell 5.1 percent in the 15 year period. For the lowest 60 percent — a majority of the people — it barely rose, or it fell. That is in contrast to the incomes of the highest 20 percent, which grew by 19.8 percent. Income for the top 5 percent rose by 26.9 percent.

So it's true: The rich are getting richer, and the poor are getting poorer. Economic disparities are so great, according to an article in the The New Republic magazine, the concentration of wealth in America today is comparable to the concentration in the Moghul Empire of India in the 16th century.

Gains among the wealthy in New England are due to the gains in high-tech businesses and other enterprises dependent on a highly educated workforce. At the same time, the region has seen a precipitous decline in manufacturing, a sector that previously provided workers with less education a hold on the middle class.

The authors of the study, Ross Gittell and Jason Rudokas, write: "Fortunately, New England has a stronger economic and workforce foundation to address rising income inequality than other regions. It does not suffer, as regions in the South do, from high overall rates of poverty and low educational achievement." The key is to continue improve the education and technological skills of workers in all households.

Some of the causes of rising inequality are beyond our control, but others are not. At the federal level, tax cuts for the very rich have widened inequality on the theory that helping the rich get richer allows them to employ more people to build their mansions and trim their hedges.

It is not an accident of nature that our economy has worsened the economic plight of a majority and enriched the very richest. It is how our policymakers have designed the system. The question is how much longer the majority will allow those policies to widen the gap between rich and poor.