Center on Budget and Policy Priorities

Poverty and Income

Income Gaps Hit Record Levels In 2006, New Data Show

Rich-Poor Gap Tripled Between 1979 and 2006

"New data from the Congressional Budget Office (CBO) show that in 2006, the top 1 percent of households had a larger share of the nation’s after-tax income, and the middle and bottom fifths of households had smaller shares, than in any year since 1979, the first year the CBO data cover.

As a result, the gaps in after-tax incomes between households in the top 1 percent and those in the middle and bottom fifths were the widest on record."

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Basics

The poverty line, the federal government’s estimate of the minimum income needed to achieve an adequate standard of living, is $21,200 for a family of four in 2008. The federal minimum wage is currently $6.55 per hour, though many states (and some municipalities) have set their own minimum wages at a higher level.

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The Center analyzes major economic developments affecting low- and moderate-income Americans, including trends in poverty, income inequality, and the working poor. In addition, we analyze the asset rules in various public benefit programs that can discourage low-income people from building modest savings and highlight potential reforms.