All Income Growth is Going to the Richest 1 Percent of Washingtonians
It’s time for policymakers in Washington state to take steps to reverse decades of widening economic disparities that threaten broad prosperity, now that it has again been shown that all income growth since 2009 continues to flow to the wealthiest Washingtonians.
An updated report from the Economic Policy Institute (EPI) shows that the richest 1 percent of households – those making over $388,000 a year – captured all of the new income generated in Washington state between 2009 and 2013 (see graph). By contrast, and in a stark reversal from past decades, average incomes among the remaining 99 percent of Washingtonians declined during this period, causing far too many hardworking families to fall even further behind.
The richest 1 percent of Washingtonians didn’t always reap such an outsized share of income gains during periods of economic growth. Prior to 1980, the 99 percent typically captured at least 80 percent of all income gains during economic expansions.
Further, as the EPI report points out, it used to be considered outrageous for executives to receive multimillion dollar salaries and outsized bonuses while laying off workers. Today, as the vast majority of working people and families in Washington state continue to struggle, super-rich CEOs living here are doing better than ever. In fact, in 2015, the CEO of Washington state-based Expedia received the highest pay ($94.6 million) of any corporate chief executive in the county.
It has become abundantly clear in recent years that everyday Americans and Washingtonians are tired of the economic inequality that has become the norm. In our state, we need policies that help all communities thrive by strengthening employment and creating more living-wage jobs. We need to make sure our tax code doesn’t favor the wealthy and the politically connected over the common good.
In fact, our upside-down tax system – where Washingtonians with the lowest incomes pay seven times as much in state and local taxes as a share of their income than the richest 1 percent – makes it even harder for the 99 percent to get ahead.
Building a stronger Washington economy requires greater economic equality and overall equity. Lawmakers must undo the systemic inequities that have created gaps in opportunity for many people of color to receive good jobs and living-wage salaries.
In Washington state:
- Voters can help advance economic equality and close the opportunity gap if Initiative 1433, now gathering signatures, makes it on the November ballot and passes. It would incrementally raise the minimum wage to $13.50 over four years, increasing the take-home pay for 730,000 people working across a range of sectors. It would also provide paid sick leave, so parents don’t lose wages when they need to take care of themselves or their children when they’re sick.
- Lawmakers during the 2017 legislative session must pass the capital gains tax recently proposed by Governor Inslee and leaders in the State House, which has been endorsed by major papers and many community groups throughout our state. And they should use the revenue from capital gains to invest in education, health care, and other services that expand economic opportunities for everyone.
And as lawmakers work to craft policies that seek to provide economic opportunity to Washingtonians, they must be especially mindful that those policies empower those who have been most harmed by racism and other structural inequalities that fuel the rise in economic inequality.