Jobs gap between US rich, poor widest in decade

President Barack Obama has stressed the need to address widening inequality, warning that proposed budget cuts will worsen the gap. (Reuters)

The gap in employment rates between America's highest- and lowest-income families has stretched to its widest levels since officials began tracking the data a decade ago, according to an analysis of government data conducted for The Associated Press.

Rates of unemployment for the lowest-income families – those earning less than $20,000 ((euro) 15,000) – have topped 21 per cent, nearly matching the rate for all workers during the 1930s Great Depression.

U.S. households with income of more than $150,000 ((euro) 113,000) a year have an unemployment rate of 3.2 per cent, a level traditionally defined as full employment. At the same time, middle-income workers are increasingly pushed into lower-wage jobs. Many of them in turn are displacing lower-skilled, low-income workers, who become unemployed or are forced to work fewer hours, the analysis shows.

"This was no 'equal opportunity' recession or an 'equal opportunity' recovery,'' said Andrew Sum, director of the Center for Labor Market Studies at Northeastern University. "One part of America is in depression, while another part is in full employment.''

The findings follow the government's tepid jobs report this month that showed a steep decline in the share of Americans working or looking for work. On Sunday, President Barack Obama stressed the need to address widening inequality, warning that proposed budget cuts will worsen the gap.

"The folks in the middle and at the bottom haven't seen wage or income growth,'' Obama said on ABC's "This Week.''

While the link between income and joblessness may seem apparent, the data are the first to establish how this factor has contributed to the erosion of the middle class, a traditional strength of the U.S. economy.

Based on employment-to-population ratios, which are seen as a reliable gauge of the labor market, the employment disparity between rich and poor households remains at the highest levels in more than a decade, the period for which comparable data are available.