Report shows rising inequality in Oklahoma as lower- and middle-class incomes stagnate

CONTACTS: 
CBPP: Shannon Spillane, 202-408-1080, spillane@cbpp.org
EPI: Phoebe Silag, 202-775-8810, psilag@epi.org
OK POLICY: Gene Perry, 918-794-3944, gperry@okpolicy.org

FOR IMMEDIATE RELEASE: November 15, 2012

Incomes for poor and middle-class families in Oklahoma have stagnated since the late 1990s, with nearly all of the growth in income going to the wealthiest households, according to a new report by the Center on Budget and Policy Priorities and the Economic Policy Institute.

“Hard work should pay off for everyone,” said Gene Perry, a policy analyst with Oklahoma Policy Institute. “What we’re seeing instead in Oklahoma is that when the economy grows, poor and middle-class families are being left out. That’s bad for all of us.”

The report, Pulling Apart: A State-by-State Analysis of Income Trends, provides a troubling snapshot of how households at different income levels are doing in Oklahoma. Since the late 1970s, income inequality between the top and middle saw the third highest increase in the nation, behind only Connecticut and California. Over that time, average household incomes for the wealthiest fifth of Oklahomans grew 63.9 percent, compared to just 16.0 percent for the middle fifth and 5.3 percent for the poorest fifth. Today, Oklahoma has the eighth largest income gap between the top and the middle.

The report finds that low- and moderate-income Oklahoma families did not share in the most recent economic expansion. From the late 1990s to the mid 2000s, the incomes of the richest fifth of households grew by 7.7 percent while incomes for the middle fifth stagnated and incomes for the poorest fifth actually fell by 7.5 percent.

“The drop in incomes among Oklahoma’s poorest families is particularly troubling,” said Perry. “So many of our state’s children growing up in poverty affects everything from their performance in school to their income as adults.”

Income gaps between the richest households and both the poorest and middle-income households have widened significantly in all states since the late 1970s. Income inequality is rising across the nation for a range of reasons, including long periods of high unemployment, more intense competition from foreign firms, a shift from manufacturing to service jobs, and a minimum wage that has not kept up with price increases. 

Many of the reasons for growing income inequality are outside of the control of states.  However, Oklahoma policymakers can take a number of steps to make our economy work better for everyone. Recommendations include:

• Make state tax systems less regressive. Good options for doing this in Oklahoma include exempting groceries from the sales tax and expanding the state Earned Income Tax Credit.
• Strengthen supports for low-income workers. We can improve the health of low-income workers by joining the Medicaid expansion. We should also invest more in workforce training programs to help low-income adults gain entry to occupations that offer better wages, opportunities for advancement, and stable employment.
• Raise the minimum wage and tie to inflation so it keeps pace with rising costs. The purchasing power of the federal minimum wage is 13 percent lower than at the end of the 1970s. Its value falls well short of the amount necessary to meet a family’s basic needs.

The joint CBPP/EPI report, as well as a press release and state fact sheets, are available here: http://www.cbpp.org/cms/index.cfm?fa=view&id=3860

An infographic for Oklahoma is available at:http://www.cbpp.org/files/pullingapart2012/United_States.pdf