American Sauce: This is rich vs. poor
May 16th, 2011
03:39 PM ET
12 years ago

American Sauce: This is rich vs. poor

Capitol Hill (CNN) – President Obama rails against "tax cuts for the wealthy." Republicans passionately push back, saying the president wants to hike taxes on "job creators." Meanwhile, the spending cut knife and partisan debate hover over Medicare and Medicaid, two programs critical to many of the poor. Neither side admits it, but the massive budget battle of 2012 hinges on the age-old debate of rich versus poor.

The twist now: the gap between rich and poor in America is growing dramatically. Yet, few in Congress or the media tackle the uncomfortable topic directly.

Not so, CNN's American Sauce. This week we lay out exactly where things stand for rich and poor in the United States, the status of the middle class (what is the middle class?) and we have blunt conversations with a multimillionaire and a woman of more humble means who are neighbors in New York City.

The point is not to blame either side, but to take a sober look at a tremendous issue in politics and American life.

Comment below. Listen here.
Or keep reading for some key statistics on rich and poor in the U.S.

(All figures from the Census Bureau, unless otherwise stated.)

The Rich:
- The richest 20 percent of Americans get 50.3 percent of the country's income.
- The portion of wealth for the rich has consistently gone up: In 1999, that figure was 49.4 percent. In 1989, it was 46.2 percent. In 1979, 44.2 percent.
- You are in the richest 20 percent, by the way, if those in your household make over $100,000.
- The number of millionaires in America went up 8 percent in 2010, according to the Spectrem Group, to approximately 8.4 million millionaires. That figure also jumped up 16 percent in 2009, following a drop in 2008.

The Poor:
- The poorest 20 percent of Americans get 3.4 percent of the country's income.
- The portion of wealth for the poor has consistently declined: In 1999, the number was 3.6 percent. In 1989, it was 3.8 percent. In 1979, 4.1 percent.
- You are in the poorest 20 percent if you make less than $20,453 in your household.
- Some 43.6 million Americans live in poverty. That is the record high for the 51 years the U.S. has recorded poverty data.
- The number of Americans in poverty jumped 9.5 percent in 2009 alone (the most recent year for which we have data).
- Overall, 14.3 percent of Americans live in poverty.
- You are in poverty, if you have a family of four and total income is under $22,314. For an individual, the poverty line is $11,136.

Disparity on the Rise
- By one key measure, income disparity in the U.S. has increased 40 percent in the past 30 years.
- Our measure: The Gini Index. A Gini Index of "0" means perfect equality in income. An index of "1" means total inequality, so one person has all the income.
- US now: 0.469. (2009 data, the most recent available)
- US in 1998: 0.393
- US in 1989: 0.362
- U.S. in 1979: 0.335

Filed under: American Sauce • Congress • Democrats • Republicans
soundoff (31 Responses)
  1. Wm. McLellan

    The best charities bring together the rich and poor, such as with Habitat for Humanity, where donors, even a former President, work alongside the recipients of the interest free mortgage, who provide their sweat equity. Both sides should gain respect for the other. The recipients will respect the long hours and compassion of the "blue-collar millionaires", and the wealthy will gain respect for the working poor.

    May 16, 2011 03:49 pm at 3:49 pm |
  2. betterdays

    And pretty much every American with the exception of the homeless would be considered "wealthy" in most other countries around the world, every one of which countries contains both "wealthy" people and poor people.

    So there you go. Thanks for the attempt to incite class warfare, but I am a non-combatant. I don't believe that my having less wealth than someone else makes me a victim. I feel fortunate to have what I have. I know this attitude won't help get Democrats elected, but oh well.

    May 16, 2011 03:55 pm at 3:55 pm |
  3. KAYAK

    not to blame either side? Don't blame the poor. They don't want to be poor. The rich want to be richer.. blame them.. They are the greedy bastards driving this nation to bankruptcy so they can buy a fancier car or a bigger yacht and vacation home. Oh yeah, they have to keep up with the Joneses when it comes to their private jet. Heaven forbid their next door neighbor has better leather upolstry in their newest Gulfstream VI than they do.. oh I forget.. the latest crave is to have a private Airbus A380.. a few of those have already been ordered. Where is the guillotine when you need it? Let them eat cake!

    May 16, 2011 03:56 pm at 3:56 pm |
  4. Roan

    Obama and his class politics make him a first rate hypocrite . He is such a loud mouth zealot about taxes but he is the one who extended the Bush tax cuts. If people want to give more to the US Treasury there is that option on your tax forms but otherwise I and most other liberal and conservatives think of every deduction possible. Anyone who thinks their money is better spent by the government than their Church, Synagogue, Am Red Cross or Salvation Army or a host of other worthy causes is an idiot.

    May 16, 2011 03:56 pm at 3:56 pm |
  5. Four and The Door

    Neither side admits it, but the massive budget battle of 2012 hinges on the age-old debate of rich versus poor.
    No, this is the argument Obama is trying to and the Democrats are hoping to have in 2012. But it is not what the Republican platform is all about. The Republicans are focused on getting the economy back up and running. This would be a win-win. Everyone wins when the economy improves...the rich and the poor. Do you know who loses when the economy goes in the dumps? The poor. Obama has had undisputable lousy results with his programs to," fix " the economy. Why would anyone who is not rich support Obama? Under his administration the banks and Wall Street have made a killing, the nation's debt has gone up 40% and the poor have been clobbered. Don't look at what his spin-meisters say. Look at results.

    May 16, 2011 03:57 pm at 3:57 pm |
  6. Democrat Class Warfare - Destroying the economy, destroying the country (the real deal)

    The richest 20 percent of Americans get 50.3 percent of the country's income.
    The poorest 20 percent of Americans get 3.4 percent of the country's income.
    "get"??? "GET"????!!!!!!!!!! If you "get" something, it is because it is "given". Income is EARNED, whether through wages or investments, aka risking your own money to make some more while hopefully not losing it all.

    Does anybody ever ask why all these "poor" people are "poor"? Did they drop out of school? Did they commit crimes and go to jail? Did they have kids at a young age or without a family to raise them? Are there no jobs where they live but they won't relocate to find a job or better job? Are they drunks or druggies? Or is it just assumed all those nasty "rich people" are keeping them down, stealing from them and starving them?

    If so then please explain how so many become rich in America when they start from poor backgrounds? Could the difference be in attitude, mental toughness, persistence, drive, etc? It has been my experience in life that one tends to "get" what one deserves and works for. It was drilled into me from an early age you needed to work hard and get good grades to succeed. Nothing was owed to you.

    Unfortunately, too many people in this country think a life of wealth and riches is owed to them simply because they were born in this country.

    May 16, 2011 03:58 pm at 3:58 pm |
  7. gt

    i would hate to just make just 23,000 that is poor.... but i wonder... how many of those where people who work or did they live off the government a 100,000 is not rich....

    May 16, 2011 04:00 pm at 4:00 pm |
  8. Rudy NYC

    Job creators were given 10 years to create jobs under the "temporary" Bush Tax Cuts. The failed to do so, and lined their pockets instead with taxpayer dollars. It is time for the failure to end. It is has not created jobs, nor will it create jobs.

    Those statistics above paint a bleak picture of reality for trickle down economists and pundits.

    May 16, 2011 04:02 pm at 4:02 pm |
  9. Marry

    Good idea, CNN! It will be interesting to see what you come up with........

    May 16, 2011 04:07 pm at 4:07 pm |
  10. Drellgor

    The real question is how do we solve this issue and who is winning in politics?

    May 16, 2011 04:11 pm at 4:11 pm |
  11. Randy, San Francisco

    GOP/Tea Party supply side trickle down economics is working too pervesrsely well. The middle class will be an endangered species at the current rate of transfer of wealth from the poor/middle class to the rich. Good education, jobs, and health care will be reserved only for the rich.

    May 16, 2011 04:14 pm at 4:14 pm |
  12. Tony in Maine

    CNN reports, "You are in poverty, if you have a family of four and total income is under $22,314. For an individual, the poverty line is $11,136."
    I live in the western foothills of Maine where the cost of living is low. Those figures are ludicrous and demonstrate how completely out of touch the decision makers and those who report on them really are.
    Further comes the admonition not to point the finger of blame. Why? It is obvious that the conservative philosophy of less and less government is responsible for the growing disparity. We are fast approaching the point where the only solution, the only way to right the list, will be to rip up the cobblestones and tip over the streetcars. Relax Wall Streeters, that'll never happen in America. Just keep feeding the sheep a diet of American Idol and Bachelor and they'll remain docile.

    May 16, 2011 04:15 pm at 4:15 pm |
  13. Brian Dodge

    Why do Republicans believe that cutting taxes for the wealthy leads to job creation? the fact is, Bush tax cuts for the wealthy led to the slowest jobs growth in 2000-2007 compared to any period since since WWII, even though the wealthiest 0.1 percent increased their share of income 1.8 fold, from ~7% to ~12% of every dollar earned.

    Tax money spent on teachers, police, emergency responders, transportation infrastructure, and better health care programs directly improve the economy. The people paving roads, maintaining bridges, inspecting the food supply, and fighting crime spend their money on food, housing, clothes, and energy, which also stimulates the economy – that's true "trickle down" job creation.

    The investment by wealthy Wall Street big shots in CDO's, Credit Default Swaps, other esoteric, unregulated, and high risk "financial instruments", and Bernie Madoff style get rich quick schemes haven't created any jobs, won't create any jobs, and if we get more Republican spending cuts and tax cuts the trickle down will kill the recovery.

    May 16, 2011 04:15 pm at 4:15 pm |
  14. REG in AZ

    Bush-Cheney clearly demonstrated that the "trickle down" theory is a total fraud that benefits the few and is sold on deception to the many while being pushed by politicians to encourage political support. Common sense leaves no doubt that giving more money to those who already spend all they want does nothing for the economy. Giving more to the poor and to the total middle-class gets spent and back into the economy quickly – being spent to pay bills, buy necessities and in encouraging new spending. When we see our representatives not only present other than the truth but also stubbornly and arrogantly try to sell the con while neglecting ever really solving the problems, we should become greatly offend that they take us for granted, that they concentrate on their political ambitions and that they just perform as "puppets" for the few that "pull their strings".

    May 16, 2011 04:19 pm at 4:19 pm |
  15. Alex

    If you were to plot this on a linear scale, there is no middle class. There's only the "less poor". The gap between middle class and poor is often only a few thousand dollars. However, the gap between the middle class and rich is millions.

    May 16, 2011 04:21 pm at 4:21 pm |
  16. Bob in PA

    A nice flat tax on all Americans would help ease the burden. Bt redistribution efforts are just flat out wrong. If someone needs a hand up, fine. If someone needs to rely on others because they are incapacitated, fane. But for those that are addicts or are continually just too lazy, let them work for their Welfare check.

    May 16, 2011 04:23 pm at 4:23 pm |
  17. Richard T.

    The GOP and FOX news like to scream and declare there is "class warfare" against the redistribution of wealth from the rich to the something for nothing poor people by the Democratric Party. Why do they lie and must know it is a lie. Class warfare and income redistribution to the wealth as been published in so many offical reports and independent studies. Lies and more lies that are believed from the possibly intentionally ignorrant Tea Pottiers. The GOP and oil executives talk about prosperity and sharing prosperity but fail to mention that it only for the already prosperous.

    May 16, 2011 04:23 pm at 4:23 pm |
  18. Republican Robber Baron

    "Job Creators" = big hoax by the Republican Establishment too afraid to admit they are sell-outs for the Corporatists. If the Republican claims were true...then why did 1000's of factories get shut down since Bush 1st offered these tax cuts...and MILLIONS of jobs have been permanently eliminated? Where are the jobs GOP? You got your tax cuts since Bush took office and our nation was on the brink of financial collapse. All the new jobs are being sent to sweatshops in India or Commie China.

    The rich are shrewd...and they simply double-down on those tax cuts by reinvesting, saving or doing stock buy-backs to make themselves even more $. This con-job about "job creators" is yet another bait and switch by the GOP.

    May 16, 2011 04:31 pm at 4:31 pm |
  19. Lolo

    And to think that the uneducated and poor republicans want to vote the fools back in office. Only in America. The republicans and tea partiers have spilled the beans on everything and these people still want to vote for them. Now you really see that racism is the motive. Do you see who is anti American now?

    May 16, 2011 04:37 pm at 4:37 pm |
  20. Brian

    The significant problem I have with programs like this that are "critical" to the "poor" is that so many today try to define someone who is poor but can afford the latest $400 cell phone, has a cell phone monthly bill of over $125 per month and many other acceptable expenditures that should be restricted to those who can afford them. If you can't afford to buy groceries for YOUR children, then you should not have a cell phone, cable and 40+ inch flat screen with monthly movie channels costing over $100 per month. That is what I have a problem with. Cut the fraud out of medicare and return it to the program it was supposed to be . . . . something for the poor and not something for those who refuse to pay for the necessities of THEIR children.

    May 16, 2011 04:39 pm at 4:39 pm |
  21. onezerofive

    Odd that no one's commented on this article.... can someone say, case study???

    May 16, 2011 04:44 pm at 4:44 pm |
  22. Vence

    "Poverty is the most extreme form of violence"

    M. K. Ghandy

    May 16, 2011 04:48 pm at 4:48 pm |
  23. kyle

    The South can't bring back slavery, but they can bring back slave wages.

    May 16, 2011 04:49 pm at 4:49 pm |
  24. Not Rich Just Thrifty

    My family makes a little over $100,000. We shop at walmart, clip coupons, and have a 9 year old car and a 7 year old car. Our home will be paid for in a little over 5 years. We give to charity and have a savings account. We don't think of ourselves as rich. But I guess someone living in poverty would. I feel grateful we have been truly Blessed with our health to be able to earn a living. We never forget to give to those that work hard but live in poverty. May God Bless Our Country.

    May 16, 2011 04:52 pm at 4:52 pm |
  25. Russ

    Hike taxes on the JOB CREATORS? Give me a break. They've had ten years of tax cuts and it's the worst job situation in history since the great depression. How does this work? The rich don't create jobs, they pocket the money or spend it on themselves. This hardly creates jobs. It hasn't worked before it's not going to work in the future. How much longer are the ignorant people of this country going to continue to vote Republican? How dumb can you be that you don't see yourself getting poorer on their promises while they get richer? Wake the hell up!

    May 16, 2011 05:05 pm at 5:05 pm |
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