Gap between Maine’s Wealthiest and Poorest Families Grows

Augusta, Maine — Income gaps widened in Maine and across the nation between the late 1990s and the mid-2000s, but Maine’s inequality problem is milder than in most other states, according to a new study by the Center on Budget and Policy Priorities (CBPP) and the Economic Policy Institute (EPI).

“As Maine’s policymakers prepare for the coming legislative session, their agenda should include policies that narrow – rather than widen – the income gaps between rich and poor in our state,” said Garrett Martin, Executive Director of the Maine Center for Economic Policy (MECEP).  “Maine’s safety net providing temporary assistance to families when they need it most, coupled with critical investments over the past thirty years in education and health care, have resulted in inequality growing slower here than in other states. But make no mistake: Maine still has a growing gap between rich and poor and recent policy decisions will make it worse. Giving tax cuts to the wealthy while dismantling the safety net, cutting property tax relief for low- and middle-income families, and shifting more of the costs for maintaining roads, educating our children, and preserving public safety onto low- and middle-income families is the wrong way to go.”

The report, Pulling Apart: A State-by-State Analysis of Income Trends, released in Maine in coordination with MECEP, found that low- and moderate-income Maine families did not share in the most recent economic expansion: 

• The incomes of the richest fifth of households grew by 6.4% while those of the poorest fifth did not grow at all from the late 1990s to the mid-2000s.  

• In the late 1990s, the income of the richest fifth of Maine households was 5.9 times the income of the poorest fifth, but by the mid-2000s that ratio had grown to 6.3.

Nationwide, incomes fell by close to 6 percent among the bottom fifth of households, on average, while rising by 8.6% among the top fifth.  Incomes grew even faster — 14% — among the top 5 percent of households.

“Income stagnation among Maine’s poorest households is particularly troubling,” said Martin. “Growing up in poverty is harmful to our children, affecting everything from their performance in school to their earnings as adults.  A fairer state and local tax system and bold new investments in education¬ and training at all levels would enable individuals and families to move up the income ladder.”