Household income declined across all groups, but at sharper percentage levels for middle-income and poor Americans. Median income fell last year from $52,163 to $50,303, wiping out a decades worth of gains to hit the lowest level since 1997.
Poverty jumped sharply to 13.2%, an 11-year high.
No one should be surprised at the increased disparity, said Richard Freeman, an economist at Harvard University. Unemployment hurts normal workers who do not have the golden parachutes the folks at the top have.
Analysts attributed the widening gap to the wave of layoffs in the economic downturn that have devastated household budgets. They said while the richest Americans may be seeing reductions in executive pay, those at the bottom of the income ladder are often unemployed and struggling to get by. Large cities such as Atlanta, Washington, New York, San Francisco, Miami and Chicago had the most inequality, due largely to years of middle-class flight to the suburbs. Declining industrial cities with pockets of well-off neighborhoods, such as Pittsburgh, Cleveland and Buffalo, New York, also had sharp disparities.