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The Rich Get Richer, While the Poor Get Poorer in Kentucky

Frankfort, KY --January 18, 2000 Not only does Kentucky place a harsh tax burden on its poorest citizens, but a report released today by the The Center on Budget and Policy Priorities (CBPP) and the Economic Policy Institute (EPI) shows that between the late ‘70s and the late ‘90s, the income gap between the top and bottom 20% of
Kentucky families has grown. The report, Pulling Apart: A State-by-State Analysis of Income Trends, demonstrated that the ratio of family income of the top and bottom fifths has grown 8th most among all states. “It’s just not right that in a time of unprecedented growth, Kentucky’s poorest families haven’t been able to share in the prosperity”, noted Debra Miller, Executive Director of Kentucky Youth Advocates.

Despite sharing in the economic growth that has swept the nation, the benefits of that growth are not being shared evenly by all Kentuckians. Instead, the rich are getting richer, apparently at the expense of the poor. Indeed, Kentucky has the dubious distinction of being among nine states where the average income of the richest fifth of families was more than eleven times the average income of the bottom fifth of families!

The disparity in incomes in Kentucky, as in the rest of the country, reflects sweeping changes in wage patterns. Globalization, the loss of manufacturing jobs and the expansion of low wage service jobs, have led to the erosion of wages for workers lacking a college education. Because Kentucky’s emphasis on the importance of education is only relatively recent, this wage erosion is felt acutely throughout the Commonwealth.

Kentucky doesn’t have to remain a leader in income disparity, however. Miller noted that Kentucky’s poor and near-poor families would benefit from a wide range of policies available at the state level. “We have a long way to go, but we have several tools at our disposal to help close the gap between the rich and the poor. Some of those tools, such as investing in education and training, may take years to pay dividends, while others, such as a state level earned income tax credit, are simple to implement, and make
a difference immediately.” Policy changes identified in the study to reduce income inequality include increases to the minimum wage, improved unemployment insurance, expanded income support programs, and reformed systems of taxation. Jane Chiles, Executive Director of the Catholic Conference of Kentucky noted that "Kentucky has a moral obligation to address the tax code’s unjust burden on those citizens who work hard but remain in poverty.”

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Catholic Conference of Kentucky

1042 Burlington Lane

Frankfort, Kentucky 40601

502-875-4345 502-875-2841 Fax cckstaffATccky.org

Last modified: October, 2010