A week ago, when Congress was facing off in a game of fiscal chicken over the national debt, The Associated Press reported on the widening income gap among Americans. Based on U.S. Census data, the gap was deepest for ethnic minorities.
"The recession and uneven recovery have erased decades of minority gains, leaving whites on average with 20 times the net worth of blacks and 18 times that of Hispanics," the AP report said ("Wealth gap widens for whites and minorities," The Maui News, July 26, 2011).
The story linked the debate in Congress over the federal debt with minority groups urging the federal government to maintain social safety nets for lower-income Americans.
The Budget Control Act approved by Congress did little to protect social safety nets while blocking President Obama's effort to increase revenues with restoration of higher tax rates on the wealthiest Americans - reflecting the increasing political gap that is impelling a reversal of progressive tax policies.
There is a comprehensive analysis of the political gap in the 2006 study "Polarized America: The dance of ideology and unequal riches" (Nolan McCarthy, Keith T. Poole, Howard Rosenthal, MIT Press, 2006).
In analyzing the growing inequity in accumulation of wealth, Polarized America found that America's lower-income population since the 1970s has increasingly comprised immigrants - noncitizen workers, whether legally in the country or not.
"In 1972, noncitizens were a small fraction of the United States population. They were also relatively well-to-do. In fact the median income of a noncitizen was actually higher than that of citizens reporting themselves as having not voted," Polarized America says.
Barriers to immigration were dismantled in 1965 with changes to the Immigration and Nationality Act of 1952. Subsequently, the noncitizen population has increased while the median income of those noncitizens fell.
"One of the main reasons for the dramatic change in the number and poverty of noncitizens is federal legislation that has opened the doors to increased legal immigration while doing little to control illegal immigration," Polarized America says.
While the 2006 study does not include losses from the 2008 economic collapse, both the study and AP recognize that white Americans generally did better in maintaining wealth.
Polarized America's analysis of economic changes through 2000 showed that while noncitizens increasingly had the lowest incomes, median income for voters was as high as it had ever been.
That's not to say that median-income voters were increasing their income. Relative to the highest incomes, Americans on average have lost ground. One analysis of incomes between 1970 and 2008 found that the top 0.1 percent had incomes grow 385 percent; the top 5 percent had incomes grow 59 percent. The bottom 90 percent of Americans had their incomes fall 1 percent ("Not spreading the wealth," June 18, 2011, The Washington Post).
But with lowest incomes on the bottom 20 percent comprising more noncitizens, median-income Americans are increasingly protective of their own income stream and resisting government policies seen as redistributive. Polarized America holds that income inequality bolstered by an influx of immigrant poor is affecting attitudes toward tax policies.
"A voter of a given income is less eager to redistribute if that redistribution has to be shared with the noncitizen poor," it says.
Polarized America theorized a resistance to taxation that is the foundation of the Tea Party.
"In theory, both declining trust and cross-class bonds may make higher-income citizens less likely to tax themselves for redistribution to lower classes. This disincentive to redistribute may be especially large in diverse communities where the upper and lower classes may be separated not only by income but by race or ethnicity."
* Edwin Tanji is a former city editor of The Maui News. He can be reached at hakumoolelo@earthlink.net. "Haku Mo'olelo," "writing stories," is about stories that are being written or have been written. It appears every Friday.
