But it doesn’t just affect people who are currently in the workforce. It has also contributed to a growing education gap that is affecting low- and middle-income children, according to a Center for American Progress report on income inequality and the middle class. The lowest-achieving students from high-income backgrounds are more likely to obtain a college education than the highest achieving students from low-income backgrounds, the report showed:

Perhaps most stunningly, there is evidence that low-income children who demonstrate aptitude for postsecondary education do not have the same access as children from higher-income backgrounds. The U.S. Department of Education reports that the probability that a top-scoring low-income student completes college is about the same as the probability that a low-scoring high-income student does, while the probability that a top-scoring middle-income student completes college is about as likely as a middle-scoring high-income student.

As income inequality continues to increase, the gap in educational attainment is growing too. The achievement gap between high- and low-income students is 30 to 40 percent larger than it was a generation ago, according to the paper, and income inequality is the primary reason. Areas of the country in which the middle class makes a higher share of income, meanwhile, demonstrate higher scores on achievement tests.

These problems lead to cycles of inequality that persist through generations. As Alan Krueger, chairman of the president’s Council of Economic Advisers, notes, the future economic mobility of American children is more closely tied to their parents’ income than it is in any other developed country. That means that rising income inequality, and the growing education gap it leads to, is jeopardizing the future for millions of American children before they even have a chance to change it.

Because of this gap women working full time are able to afford less education, housing, transportation, food, and health care for themselves and their families than their male counterparts. As a result women and female-headed households are more likely to be in poverty and less likely to have health insurance. The pay gap translates into a significant economic disadvantage for women and their families, especially when nearly two-thirds (63.9 percent) of women are now either the primary breadwinner or a co-breadwinner, bringing home at least 25 percent of their family’s income.

With the money lost over her lifetime, a woman could feed a family of four for 37 years, pay for seven four-year degrees at a public university, or simply save the money for retirement, boosting her quality of life when she leaves the workforce:

For some women, of course, the pay gap is even worse. According to a report from the Labor Council for Latin American Advancement, Latina women face a pay gap of 40 percent.

This trend continued in last night’s primaries. Even though he won both Maryland and Wisconsin, the results were uneven when broken down by income. Romney’s vote share increases as income goes up, and vice versa. He captured big majorities of the wealthiest voters, but was unable to break 50 percent among those making under $100,000. Exit polls from the two states:

It’s no wonder everyone seems to agree he “favors the rich,” according to a CNN poll.

Today, ThinkProgress spoke with MIT economist Daron Acemoglu, whose new book, Why Nations Fail (co-written by James Robinson), looks at the effect politics and policy have on economic growth and prosperity. Acemoglu said that he believes the most “pernicious” effect of income inequality is that it drains political power from lower- and middle-class Americans and allows the richest to then begin “changing the rules in their favor”:

I think there’s a lot of debate about the economic impact of income inequality. There’s literature on how greater inequality might slow economic growth because it creates a less conducive environment for consumer demand or credit. But at the end, my view, and that of our book with James Robinson, is that the more pernicious effect of economic inequality comes indirectly through its impact on political inequality. it’s a general pattern throughout history, and we see around today, that when economic inequality increases, the people who have become economically more powerful will often attempt to use that power in order to gain even more political power. And once they are able to monopolize political power, they will start using that for changing the rules in their favor. And that sort of political inequality is the real danger that’s facing the United States.

Watch it:

Acemoglu added that the Supreme Court’s decision in Citizens United and the growth in Super PAC spending are only going to make this problem worse by increasing the importance of money in politics. “We already had a very serious problem,” he said. “Instead of trying to stem that tide, we’ve done the opposite and we’ve now opened the sluice gate and said you can use that money with no restrictions whatsoever.” According to calculations by Council of Economic Advisers chairman Alan Kruegar, the shift in income inequality over the last three decades has been the equivalent of moving $1.1 trillion of income from the 99 percent to the top 1 percent every single year.

The 1934 economic rebound was widely shared, with strong income gains for the vast majority, the bottom 90 percent.

In 2010, we saw the opposite as the vast majority lost ground.

National income gained overall in 2010, but all of the gains were among the top 10 percent. Even within those 15.6 million households, the gains were extraordinarily concentrated among the super-rich, the top one percent of the top one percent.

Just 15,600 super-rich households pocketed an astonishing 37 percent of the entire national gain.

During the recovery, corporate profits have also roared back, already hitting their pre-recession heights. Wages, however, have not done the same.

But as the Roosevelt Institute’s Mike Konczal pointed out, 2010, the first full year of the recovery, was very good for America’s richest 1 percent. In fact, that year the richest 1 percent captured 93 percent of the nation’s income gains:

Well, we finally have the estimated data for 2010 by income percentile, and it turns out that the top 1% had a fantastic year. The data is in the World Top Income Database, as well as Emmanuel Saez’s updated Striking it Richer: The Evolution of Top Incomes in the United States…The takeaway quote from Saez should be: “The top 1% captured 93% of the income gains in the first year of recovery.”…The bottom 90% of Americans lost $127, the bottom 99% of Americans gained $80, and the top 1% gained $105,637. The bottom 99% is net positive for the year because of around $125 in average capital gains. They can take comfort in efforts by the Right to set the capital gains tax to 0%, which would have netted them an addition couple dozen bucks.

This chart shows that, even discounting capital gains (which are overwhelmingly made by the very rich), the very richest Americans have seen the fastest bounce back in terms of income (the blue line is the richest 0.1 percent, while the red is the richest 1 percent):

During the slow recovery, corporate profits have already roared back to their pre-recession heights. Wages, however, have yet to follow suit, leaving the 99 percent to struggle as the 1 percent enjoys a real recovery.

Joseph Williams

Williams is one of 18 Virginia students participating in a hunger strike — now more than a week long — to protest the poor wages paid to many of the university’s contracted service employees. The strike, organized by the school’s Living Wage Campaign, began on February 17 with the goal of getting a living wage for underpaid employees. “I know first-hand what the economic struggle is like for many of these underpaid workers,” Williams wrote in an essay explaining his participation:

In failing to implement a living wage for its lowest paid employees, the University of Virginia has also failed to uphold the moral standards to which it holds its students. We are engaging in this hunger strike to call attention to the administration’s moral hypocrisy and to finally produce results in the form of a Living Wage. Although I am exhausted, hungry, dry-mouthed, and emotionally taxed, I believe it is my responsibility as a member of the University community, and even more as a member of the human race, to stand up and speak for those whose voices have been silenced and whose livelihoods are marginalized by the policies of the current University administration.

Williams decried the pay disparity between “hundreds of contract workers who may make as little as $7.25/hour” and the university’s top administrators. According to the essay, six of the state’s 10 highest-paid employees are administrators at Virginia. Williams also told the story of one employee who, despite working 40 hours a week, couldn’t afford to pay rent or utility bills.

“We have taken every conventional route towards this goal, garnered wide student, faculty and community support – yet our pleas have been consistently ignored and workers are still paid unjust wages,” Williams wrote. Perhaps the hunger strike and the national notoriety it has received is changing that, though. According to local news reports, University of Virginia president Teresa Sullivan plans to meet with the strikers today.

Companies are improving margins and generating profits as wage growth for the American worker lags behind the prices of goods and services…While benefiting the bottom line for businesses, the decline in inflation-adjusted wages bodes ill for the sustainability of economic growth as consumers may eventually be forced to cut back. [...]

Of the 394 companies in the Standard & Poor’s 500 Index that have reported since Jan. 9, earnings for the quarter ended Dec. 31 increased 5.1 percent on average and beat analyst estimates by 3.2 percent. Some 70 percent of the companies have posted better-than-projected results.

This pattern has become all too familiar during the slow economic recovery. In fact, real wages fell in 2011, despite record corporate profits. “There’s never been a postwar era in which unemployment has been this high for this long,” explained labor economist Gary Burtless. “Workers are in a very weak bargaining position.”

Between 2009 and 2011, 88 percent of national income growth went to corporate profits, while just 1 percent went to wages, a stat that is “historically unprecedented.”

There are some Republicans, however, who aren’t subscribing to this agenda. According to a new poll, a majority of low-income Republicans believe that the America’s economic system unfairly favors the wealthy and that the government does not do enough to help the poor:

In a Pew Research Center survey conducted in early October, 57% of lower-income Republican and Republican-leaning voters said the government does too little for poor people. Just 18% said it does too much.

By contrast, higher-income Republicans took the opposite view; by roughly two-to-one (44% to 21%) Republicans with incomes of $75,000 or more said the government does too much, not too little, for poor people.

Indeed, while sharing the public’s general distrust of the government, 70 percent of low-income Republicans agree with the 99 percent movement that “a few rich people and corporations have too much power in the U.S.” And given that nearly half of all Americans are one financial shock away from falling into poverty, it is no wonder that even Republicans are questioning their party’s priorities.

Though the law expanded the legal remedies available to women who have been victims of discriminatory pay, little has been done to address the pay gap that exists between male and female employees. Since the Equal Pay Act of 1963 was signed into law, the pay gap has closed at less than half-a-cent per year. That trend is continuing, as the pay gap barely closed from 2009 to 2010.

Women made 77 percent of men’s earnings in 2009, the year the law passed. In 2010, that was virtually unchanged, as women’s wages rose to 77.4 percent of men’s. The gap is even larger for African Americans and Latinos: black women made 67.5 percent of all men’s earnings in 2009, while Latino women made 57.7 percent. In 2010, those figures ticked up to 67.7 percent and 58.7 percent, respectively.

Women make up half of the American workforce, and in two-thirds of American families, the mother is the primary breadwinner or a co-breadwinner. But they make less than their male counterparts in all 50 states, though the size of each state’s wage gap varies. While the gap continues to close in places like Washington, D.C., where women make 91.8 percent of men’s earnings, it is growing in others, like Wyoming, where women’s earnings dropped from 65.5 percent of men’s in 2009 to just 63.8 percent in 2010.

Because of the gender pay gap, women with the same education doing the same job as men earn far less over their working lifetimes. The wage gap costs $723,000 over a 40-year career for women with college degrees. In some industries, the gap can cost women close to a million dollars.

In November 2010, Senate Republicans killed efforts to close the pay gap when they unanimously voted to block the Paycheck Fairness Act, which would have updated the Equal Pay Act, closed many of its loopholes, and strengthened incentives to prevent pay discrimination.

In an interview with the BBC, Gates noted “taxes are going to have to go up” and thus he’d prefer that they “go up more on the rich than everyone else.” There needs to be “a sense of shared sacrifice,” he said, adding, “right now, I don’t feel like people like myself are paying as much as we should”:

GATES: Well the United States has a huge budget deficit, so taxes are going to have to go up. And I certainly agree that they should go up more on the rich than everyone else. That’s just justice.

BBC HOST: Is that a message you think that works with other people as wealthy as yourself, or is it just a small circle of friends — yourself, Warren Buffet, a few others.

GATES: Well, I hope we can solve that deficit problem with a sense of shared sacrifice — where everybody would feel like they’re doing their part. And right now, I don’t feel like people like myself are paying as much as we should.

Watch it:

GOP presidential candidate Mitt Romney has declared that people with Gates’ view are just riddled with “envy.” But considering that Gates’ wealth dwarfs Romney’s millions, it’s highly doubtful that Gates is envious. He, like an increasing number of millionaires, just views paying his fair share as the right thing to do.

Not surprisingly, this tax cut will benefit the wealthy significantly more. While a family making $600,000 would keep $4,000 of their income, a middle-class family making $50,000 would save only $130:

High-income families would get the biggest boost from his proposed tax cut. Families making more than $500,000 now pay just under 9 percent of their incomes in state taxes. Under Christie’s plan, the highest rate would drop to just over 8 percent, meaning that the annual state income tax paid by a family with $600,000 in taxable income would drop from about $39,000 to around $35,000.

A family making $50,000 would see its tax bill fall from about $1,270 to about $1,140.

Noting that millionaires would reap $7,200 from the tax cut, New Jersey Assembly Speaker Sheila Oliver (D) said, “A 10 percent across-the-board income tax cut might make a nice sound bit, but ultimately it benefits the wealthiest far more than low and middle income earners.” State Senate President Stephen Sweeney (D) just called it “a B.S. tax cut.” “This is another windfall for multi-millionaires at the expense of schools, because that’s where the money comes from,” he said.

Indeed, Christie took an $820 billion bite out of public education in 2010, a cut so severe that it violated the state’s constitution. Christie merely labeled the court “crazy” and complained that he had no way of balancing the budget without gutting education, even when atwo percent tax increase on millionaires would completely plug the hole.

Even now, Christie has not mentioned how he plans to pay for the 10 percent income tax cut that could cost the state over $1.1 billion. But he still managed to blast the state Supreme Court regarding his education cuts. He called on the court to “admit” that its ruling “requiring poor, often urban schools to get increased funding was ‘a failure‘ because pupil performance at those schools has not improved.” Judging by his past and future plans, neither has the governor’s.

Understandably, in today’s economic climate any job is often perceived as better than no job at all. After all, unemployment remains at 8.5 percent, and 8.1 million people are involuntarily working part-time because their hours have been cut or they cannot find full-time work.

But while getting people back to work is an important goal, it is also important that workers be employed in positions where they can earn a living wage and receive benefits.

Case in point, nearly a quarter of a million jobs were added in the retail trade in 2011, and retail is projected to be one of the fastest growing industries though 2018. According to the National Retail Federation, “Retail Means Jobs,” as the industry supports 1 in 4 jobs in America.

On the surface this looks very promising. But a new report released by City University of New York and the Retail Action Project illustrates how the wages and working conditions of retail workers in New York City are often less than ideal — especially for women and people of color.

They surveyed retail workers in New York City — a major retail hub in the United States — and the findings of their study are stark. While about one-third of the survey respondents were economically supporting at least one family member, the median wage was only $9.50 an hour, with about 12 percent earning only the minimum wage of $7.25 an hour.

More than half of the retail workers surveyed were employed part-time, with only 29 percent receiving health benefits, and only 44 percent were entitled to paid sick days. Of those workers who did not receive health benefits from their employer, a quarter had no health insurance and slightly more than a third depended on government programs like Medicaid.

The findings were even more disheartening for women and people of color employed in retail, particularly given the fact that they comprise the majority of the workforce. Women earned less money, were more likely to be employed part-time, were less likely to have health coverage, and were less likely to be offered promotions than men.

These same patterns were true for people of color as well. Black and Latino retails workers are far less likely to be offered promotions, and as a result the wage gap increases significantly with job tenure. For example, white workers who had been on the job for six months or less still earned more than Latino workers who had been at the same job for more than two years.

As our nation’s economy continues to recover, we will be well served to remember that getting people back to work is not enough in and of itself. A strong middle class creates both economic growth and stability. The demand for goods and services that grows the economy comes mostly from the spending patterns of middle class consumers. Jobs that pay less than a living wage and that result in high levels of dependency on government services like Medicaid are not the answer to our economic problems.

CEA Chairman Alan Krueger With President Obama

However, there are real negative consequences to income inequality. Studies have shown that inequality can severely restrict economic growth. Today, ThinkProgress asked Alan Krueger, chairman of President Obama’s Council of Economic Advisers, to respond to Romney’s assertions. Krueger replied by noting that addressing income inequality is “not about envy at all,” but about ensuring that all segments of the population share in economic growth:

The trends that have taken place in the U.S. over the last three decades are particularly of concern to economists and others. We’ve seen a steady decline, erosion, in the size of the middle class. That’s not good for the economy. That’s not good for all segments of American society. And I think some of [the government's] policies have exacerbated that…There are certainly legitimate policy issues, and as the President’s economic adviser, it’s certainly something that we’re focused on. I don’t think this is an issue about envy at all. I think we’d like to see all segments of society do well. The President has said ‘when all Americans do well, America does well.’ The accumulating evidence suggests that the erosion of the middle class has been bad for the economy.

Watch it:

According to Krueger, the shift in income inequality over the last three decades is the equivalent of moving $1.1 trillion of income from the 99 percent to the top 1 percent every single year. This has led to a severe shrinking of the middle class:

Romney though, would prefer that these facts stay in “quiet rooms,” rather than be discussed by lawmakers and the public.

Now even members of his own party are damning the callous nature of his work. Chafing from the criticism, Romney blasted his “desperate” opponents yesterday for joining President Obama in “put[ting] free enterprise on trial” and engaging in “the bitter politics of envy.”

This morning on the Today Show, host Matt Lauer asked Romney — twice — whether he truly believed any questions regarding the practices of Wall Street or the distribution of wealth and power is merely “envious” or more about “fairness.” Both times, Romney insisted that it was solely an “envy-oriented” attack on “millionaires and billionaires and executives and Wall Street”:

LAUER: When you said that we already have a leader who divides us with the bitter politics of envy, I’m curious about the word ‘envy.’ Did you suggest that anyone who questions the policies and practices of Wall Street and financial institutions, anyone who has questions about the distribution of wealth and power in this country, is envious? Is it about jealousy, or fairness?

ROMNEY: You know, I think it’s about envy. I think it’s about class warfare. When you have a president encouraging the idea of dividing America based on the 99 percent versus one percent — and those people who have been most successful will be in the one percent — you have opened up a whole new wave of approach in this country which is entirely inconsistent with the concept of one nation under God. The American people, I believe in the final analysis, will reject it.

LAUER: Yeah but envy? Are there no fair questions about the distribution of wealth without it being seen as ‘envy,’ though?

ROMNEY: I think it’s fine to talk about those things in quiet rooms and discussions about tax policy and the like. But the president has made it part of his campaign rally. Everywhere he goes we hear him talking about millionaires and billionaires and executives and Wall Street. It’s a very envy-oriented, attack-oriented approach and I think it will fail.

Watch it:

The exchange is indeed shocking in what it reveals. In a time when income inequality is at its worst level since the Great Depression and Americans are increasingly concerned over the shrinking middle class, Romney is insisting that anyone who questions — let alone tries to reform — the unfair advantages of the extremely wealthy or the destructive practices of the financial industry that single-handedly shoved America into a recession is nothing more than “envious” of these people’s success.

Perhaps his answer shouldn’t be so surprising given how myopic the view is from his high perch. Romney is, after all, a millionaire who is still making money from the predatory equity firm while paying little in taxes and owes much of his political viability to Wall Street’s pocketbook. Indeed, he suggested the public office should be the province of rich people. Perhaps he’s just defending his own.

As the Washington Post’s Greg Sargent points out, “Romney was twice given a chance to nod in the direction of saying that concerns about these problems have at least some legitimacy to them, that they are about something more than mere envy or class warfare, and that they are deserving of a public debate. And this is the answer he gave.” Fellow candidate Newt Gingrich had another description for Romney’s answer: “baloney.”