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How long do fat cats live? A new Cornell University study of the lives of the richest Americans suggests the typical high-income American can expect to live longer than the average person on the planet. But, while the study says the top 10 percent of Americans enjoy a longer life span than people living in poverty, there’s a lot that can cut down on life expectancy.
“The difference in life expectancy between Americans in poverty and Americans in the top one-tenth of 1 percent of wealth is very large,” says Cornell economist Robert Topel, director of the Economic Opportunity Center. “But the differences between the middle, which is the majority of Americans, and the poorest one-tenth of 1 percent is less than 10 years.”
The average life expectancy for a middle class or lower-income American is 79. “Even though the United States has a high level of inequality compared to other countries, the length of our life span for the average middle-class or low-income American is pretty good,” says Topel, who wrote the new report, titled, “Examining the Distribution of Life Expectancies in the U.S.: The Role of Inequality.”
In the U.S. today, says Topel, the poorest Americans are in “greater health than the poor people in most other advanced countries.” Still, he says, the life expectancy of the wealthiest Americans is about 10 years longer than the life expectancy of the poorest Americans.
The new study is one of the first to look at the overall impact of inequality on the U.S. population. There is no single reason why there’s a lot of money in America, says Topel. Income disparity is “a consequence, not a cause,” he says.
In 2012, the top 10 percent of Americans earned 32.4 percent of the national income, while the bottom 90 percent earned only 17.2 percent. The top 1 percent, by comparison, earned 16.2 percent of the national income, while the bottom 99 percent earned only 4.1 percent.
“The income inequality in the U.S. is more than a decade higher than in any other advanced country,” says Topel.
Topel finds that the poor and the middle class are worse off than they were before the 2008 economic crash, and the rich are not as wealthy as they were before the Great Recession. A significant number of Americans have seen their wealth disappear, with the average middle class family’s wealth having fallen by 5 percent between 2007 and 2012.
Still, the rich remain richer than ever. In 2012, the average income of the richest 1 percent of Americans was 15 times greater than the average income of the bottom 90 percent. “Income inequality is going to remain high until the economy improves, and it hasn’t improved very much,” says Topel.
“There has been a massive concentration of income in very few individuals, and we’ve seen that the economic mobility has not improved at all,” says Topel.
In 2012, the top 10 percent of Americans earned 17.5 times as much as the bottom 10 percent of Americans. That’s the highest it has ever been since the federal government began tracking these numbers.
Topel says that although the Great Recession has caused income inequality to worsen, the economy should recover by 2015.
“If the economy comes out of this, you’ll start seeing the trends reverse,” he says.
In fact, Topel projects that by 2018, the top 10 percent of Americans will earn only 13 times as much as the bottom 10 percent.
On May 6, the Census Bureau will release the official poverty numbers for 2013, as well as other economic information. It’s the one time a year that top income earners are likely to pay much attention to the numbers. In February, the Census Bureau said it would stop publishing the official poverty numbers for the year after 2013, and instead count the entire population using a statistical model based on income.
“We’re no longer reporting poverty statistics. We’re really reporting, on a national level, how many people live in poverty,” says Topel. “Our goal is to be on the cutting edge of measuring how the poor are doing.”
The poverty numbers can be a useful indicator of overall economic health, but not in a direct way. A person in poverty may have two incomes or a single parent might be supporting her or him and a sibling.
“When you’re trying to figure out how people are doing, the best indicator is employment,” says Topel.
That means that government efforts to address poverty by expanding access to job training programs and public assistance programs must go beyond the standard minimum wage of $7.25 an hour to better equip the poor to get jobs.
The poverty rate has fallen to its lowest point in 40 years. The rate is 11.3 percent in 2013, down from 12.7 percent in 2012, and the lowest since it hit 10.3 percent in 1973, when gas prices were as low as they are today.
The numbers are even more promising when it comes to children. The poverty rate for children fell to 13.5 percent in 2012, down from 16.1 percent in 2011.
While the federal poverty level remains at $22,050 for a family of four, the percentage of children who live in poverty is at its lowest level in 30 years.
And the poverty numbers for older Americans are dropping.
The rate for older Americans declined from 10.9 percent in 2012 to 10.7 percent in 2013, down from a peak of 12.1 percent in 2009, when the Great Recession began.
The poverty rate for people over 65 fell from 11.8 percent in 2012 to 11.5 percent in 2013.
For all ages, the poverty rate dropped from 15.2 percent in 2011 to 15.0 percent in 2012 and to 14.7 percent in 2013.
A recent poll conducted by CBS News and The New York Times found that just 32 percent of Americans said the federal government should do more to make sure every poor American had access to decent health care. Only 43 percent said it should do more to make sure low-income Americans had access to nutritious foods.
But even the poorest Americans have access to health care, with 91.5 percent covered by Medicaid, Medicare, or the Affordable Care Act in 2013, up from 89.6 percent in 2012.
So is there any hope in the eyes of a nation?
Topel says there is cause for optimism.
The economy added 2.6 million jobs in 2013, well above the expected