Rhode Island’s economy is recovering. But not for the 99 percent it isn’t.
A new report by the Economic Analysis and Research Network shows that between 2009 and 2011, the 99 percent – those Rhode Island’s who make on average $41,958 a year – saw an average decline of 4.1 percent in their earnings.
On the other hand, the one percent in Rhode Island – those who make at least $287,311 a year – did quite well in the same two years. Their earnings increased by 17.3 percent from 2009 to 2011.
“Rhode Island has not escaped the disturbing trend of growing inequality over the past decades,” said Kate Brewster, executive director of The Economic Progress Institute. “Today, the average income of the top one percent is 20.3 times the average income of the bottom 99 percent. We call on leaders in Washington and here at home to put in place policies that increase income for the majority and help close the income gap.”
Only in four other states – North Dakota, Massachusetts, Texas and Colorado – did the one percent fare better from 2009 to 2011. And only the 99 percent in Nevada fared worse than the 99 percent in Rhode Island did from 2009 to 2011.
Conversely, there was less income disparity between the one percent and the 99 percent in Rhode Island from 1979 and 2007, and Rhode Island had less income disparity than the national average. The richest one percent of Rhode Islanders income grew by 170.3 percent from 1979 to 2007 compared to 40.4 percent for the poorest 99 percent of Rhode Islanders. Nationally during that same time frame, the richest one percent increased their earnings by 200.5 percent and the poorest 99 percent increased by only 18.9 percent.
The change in income distribution coincided with not only the economic collapse but also broad income tax cuts for the top tax bracket in Rhode Island proposed by former Governor Don Carcieri, a tea party Republican, and approved by the General Assembly, which took a hard turn to the right on economic policy during and after the Carcieri era.
From 2005 to 2011, the highest income tax rate in Rhode Island dropped from 9.9 percent to 5.99 percent. And during that same time frame that taxes were lowered on Rhode Island’s richest residents and they simultaneously started to earn a higher percentage of the state’s overall income, the unemployment rate creeped up to among the highest in the nation, further eroding the talking point from the far right and conservative Democrats that tax cuts help create new jobs.
The new report released today does not breaks down the data only into the one percent versus the 99 percent. You can read the full report here. Or check out the online version here. Here’s the Rhode Island-specific data.
In 2007, the one percent in Rhode Island accounted for 18.1 percent of all income. That was up from 1979, when the one percent only accounted for 10.3 percent. In 1928, the one percent in Rhode Island were responsible for 23.6 percent of all income.