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Obama will highlight widening income gap in speech

President Barack Obama unveils new NSA reforms. (Jan.

President Barack Obama unveils new NSA reforms. (Jan. 17, 2013) Credit: News12

WASHINGTON -- President Barack Obama will call for a minimum-wage hike, expanded prekindergarten education and more job training Tuesday night in his State of the Union Address to take on what Democrats call one of the nation's biggest challenges: growing income inequality.

By putting a focus on the widening gap between top earners and low-wage workers in his 9 p.m. speech, Obama will ramp up the political debate among Democrats and Republicans on its cause and what to do about it.

On Long Island and nationally, the wage gap has been growing for years and split wider after the Great Recession of 2007. But the gap shows no sign of closing since the economic recovery began in 2009.

"Inequality has definitely been a long-standing problem for Long Island," said sociology professor Marc Silver at Hofstra University in Hempstead.

"One has to be concerned about the quality of life of those who live and earn their living on Long Island," Silver said. "If people's wages cannot keep up and maintain a quality of life, by definition that means people are hurting."

Silver said the trends he found in an analysis for the Long Island Index, a Rauch Foundation project that tracks data about Long Island, are "troubling for the long-range prospects for the island." The Rauch Foundation is a Long Island-based family foundation.

Mirroring the nation, Long Island saw the median household income drop 7 percent since 2008 -- from $96,600 then to $89,600 in 2012.

The decline in household income, though, was not evenly distributed across pay levels.

The top 10 percent of highest-paid workers on Long Island saw their household income drop 3 percent since its high point in 2008, the data show -- a dip in the minimum pay in this top bracket from $228,200 in 2008 to $220,900 in 2012.

But the bottom 10 percent of lowest-paid workers saw their household income plummet 17 percent from their high point in 2007, according to the data -- a drop from the top pay in this bottom bracket of $25,900 in 2007 to $21,600 in 2012.

Meanwhile, the uneven recovery shows up in the estimates for household incomes in 2011 and 2012: The top 10 percent of wage earners saw a one-year increase of 3 percent, but the bottom 10 percent saw a one-year drop of 5 percent.

Income inequality is an issue driven in part by New York Democrats: Newly elected Mayor Bill de Blasio highlighted it in his Tale of Two Cities campaign.

Sen. Charles Schumer defines it as the need to turn around the "decline of income for the middle class."The debate will revolve around what the government should do and whether it should raise taxes to do it.

Kevin Law, president of the business-oriented Long Island Association, said, "The president needs to focus on education and sustainable private sector job growth to help bridge any inequality gaps rather than trying to devise more ways to redistribute wealth through more taxes on businesses."

Roger Clayman, executive director of the Long Island Federation of Labor, said Obama should raise the minimum wage and put federal money to work.

"We need those investments, in roads, bridges, schools, rails," he said. "Most of the jobs being created since 2008 have been low-wage jobs. These are not middle-class jobs."

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