Study: Income inequality grows in N.M.

Sociologist says state has two separate economies

ALBUQUERQUE, N.M. – The gap between wealthy households and poor families continues to grow in New Mexico, and the difference between their incomes now is the largest in the nation, according to a study.

From 2008 to 2010, the richest 5 percent of households had average incomes that were nearly 17 times higher than the bottom 20 percent of households, according to the report from the Washington, D.C.-based groups Center on Budget and Policy Priorities and the Economic Policy Institute. That’s a jump from two years earlier, when the difference was around 14 times.

In addition, household income for the richest 20 percent of households in New Mexico was 9.9 times greater than for the poorest 20 percent, the report said. That’s the highest ratio in the nation.

Arizona had the second-highest ratio, at 9.8-to-1, followed by California, with a ratio of 9.5-to-1.

Across all states, the average income of the richest fifth of households was eight times higher than the poorest fifth, the study showed.

Elizabeth McNichol, a fellow at the Center on Budget and Policy Priorities and a co-author of the report, which was issued last week, said growing inequality in New Mexico follows a trend that began in the 1970s and has gotten progressively more pronounced as the state’s economy struggles.

“The last decade was a lost decade for poor and middle-income households,” McNichol said.

She said that since 1970, average income for poor New Mexico families has grown around $2,000 while jumping an average $68,000 for wealthy households.

The report’s authors blame the state’s income inequality partly on low union membership and wage disparities.

According to rough calculations by the Census Bureau, New Mexico had the nation’s highest rate of people below the poverty line, at 22.2 percent of the population in 2011. The state has high unemployment among its various Native American reservations and a large high school dropout rate among its sizable Mexican-American population.

The gap in New Mexico persists because the state has two economies – one that attracts highly educated scientists to high-paying jobs at places like Los Alamos National Laboratory, and another rural and agricultural system that struggles to find jobs for unskilled workers, said Andrew Schrank, a University of New Mexico sociologist.

“The reality is that (the workers) don’t work in the same workforce,” Schrank said. “This is a reflection of deep inequality that remains in New Mexico.”

Peter B. Edelman, a Georgetown Law professor and author of So Rich So Poor: Why It’s So Hard to End Poverty in America, said the income gap in New Mexico has been widening ever since the state has been losing manufacturing jobs for low-paying service jobs, most connected to tourism.

“The changes in tax structures have been gifts to those at the very top,” Edelman said.

But with the focus on revising the federal tax code in Washington with proposals for tax increases on the wealthy, Edelman said the country now has an opportunity to talk about income inequality.

“This has been going on for 40 years,” Edelman said. “I’m hopeful we can start a discussion about it.”

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