Tag: wealth inequality

Eight Wealthiest Men Own the Same Amount as the Poorest Half of The World

According to Oxfam, because of our broken economics, never have so few owned so much.

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Source: AlterNet

Author:Illana Novick

Emphasis Mine

A new Oxfam report confirms many of our worst suspicions about about inequality, that it is horrible and getting worse. Eight men, many have the same wealth as the poorest 50% of the world, or 3.6 billion people, according to the report. It was published to coincide with the start of the World Economic Forum in Davos, Switzerland, the world’s largest gathering of leaders and business heads.

The poorest half of the world owns own the same in assets as that group of eight, $426 billion to be exact. The group of eight is led by Bill Gates, Amancio Ortega, the founder of the Spanish fashion chain Zara, and investor Warren Buffett. The others on the startlingly short list are Carlos Slim Helú, the Mexican telecom tycoon, Jeff Bezos, Mark Zuckerberg, Larry Ellison of Oracle and Michael Bloomberg, former billionaire mayor of New York and founder of Bloomberg news and financial information service.

This information would be frightening enough on its own, but gets even worse when compared to 2016’s data, when a whopping 62 owned the same in assets as the poorest half of the world, partly because new data shows that poverty in India and China is even worse than reported just last year. Such a steep drop should be troubling to anyone concerned the scourge of economic inequality. Oxfam’s report certainly didn’t mince words, calling the data “beyond grotesque,” and, as the Guardian reports, advocating for “a new economic model to reverse an inequality trend that it said helped to explain Brexit and Donald Trump’s victory in the US presidential election.”

“From Brexit to the success of Donald Trump’s presidential campaign, a worrying rise in racism and the widespread disillusionment with mainstream politics, there are increasing signs that more and more people in rich countries are no longer willing to tolerate the status quo,” the report said.

It’s not enough, and in fact, is probably counterproductive, to make these eight men the poster boys for economic evil though they are the beneficiaries. As Mark Goldring, Oxfam’s CEO writes in a Guardian Op-Ed explaining the report, many of the top eight are also among the world’s most prominent philanthropists. Goldring continues,

this is not an exposé of eight people, but of a broken economics. Narrowing the gap between the richest and the rest requires us to take on a more challenging task than asking eight men to change their behaviour. It requires us to create a more human economy; one that does not result in 1% of the world’s population owning the same wealth as the other 99%. One that encourages and rewards enterprise and innovation, yes, but one that also offers everyone, regardless of background, a fair chance in life and ensures when individuals and businesses succeed, they do so for the benefit, rather than at the expense, of others.

Even the Davos heavyweights know this, as, in a study published ahead of the gathering, 700 experts said inequality is the number one threat to the global economy. One way to begin might be to address this threat, aside from a fundamental cultural shift in values, would be to limit tax avoidance, which Goldring reminds us “costs poor countries more than $100bn annually that could be used to provide clean water, lifesaving medicines or education. Rich countries, including the UK, lose countless billions more. Yet governments, anxious to defend their own corporate sectors and perceived national interests, have failed to adequately respond to companies’ use of tax loopholes, corporate power and new technology to avoid paying their fair share.” Also contributing to the inequality are policies allowing aggressive wage restraints.

If any of the well-heeled Davos attendees were serious about fighting this threat they would do well to read both the report, and and Goldring’s commentary.

Ilana Novick is an AlterNet contributing writer and production editor.

 

See: http://www.alternet.org/economy/eight-wealthiest-men?akid=15114.123424.rWHESr&rd=1&src=newsletter1070612&t=14

As Bernie Sanders Is Showing, This Country Is Much More Progressive Than You Think

It’s true. Even as we descend into an election year defined by right-wing extremism, the numbers simply don’t lie.

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Source: AlterNet

Author: Eliza A. Webb

Emphasis Mine

With the races for the presidential nominations heating up, and Iowa and New Hampshire just a stone’s throw away, it is time for Americans to come to terms with the undeniable truth: We are a country of equality-loving, regulation-supporting, bleeding-blue liberals.

Despite the political division in Washington, the far-right rancor being spewed by G.O.P. candidates, and the contention in the Democratic race over Wall Street, campaign finance reform, universal health care, and how to handle ISIS, poll after poll shows that the people of this country strongly support progressive, liberal and democratic socialist ideas.

We just don’t like the linguistic packaging.

On wealth inequality, polls find that “a strong majority” of U.S. citizens believe the current situation is an urgent problem (including one-half of Republicans and two-thirds of independents), and think the current income and wealth distribution is unfair.

Despite Republican fear-mongering about big government, Americans “favor taxing the wealthy to expand aid to the poor,” and want Congress to rectify this inequality by levying “heavy taxes on [the] rich” and increasing rates on people making over $1 million a year.

Americans also support steep progressive reform on Wall Street, with 50% to 58% of likely voters in favor of breaking up the big financial institutions.

Concerning the infusion of money in politics, Americans want campaign finance reform “with near unanimity,” and half would personally vote for a law establishing the government funding of federal campaigns. The support for reform is strong across party lines, with a prodigious 80% of Republicans, 84% of independents, and 90% of Democrats believing money plays too large a role in the political process. Other polls show three in four Americans think there is too much money in politics and disagree with the concept of unregulated campaign finance.

Americans also support a substantial raise for low-wage workers, with 63% in favor of a $15 minimum wage by 2020, and 75% in favor of $12.50 by the same year. Other polls show that a majority of swing-state Republican voters support an increase, and 69% of working people favor an increase to $15. Concerning workers’ rights, a majority also want to improve scheduling for chain-store and fast-food restaurant employees.

On the power of money and big business in general, 75% of Americans think large corporations have too much influence in the country. With top CEOs making 373 times what their workers do, Americans think the government should take action to narrow the gap: one-third of Republicans want to cap the income of corporate executives, and 59% of Americans support government restriction of CEO pay.

Likewise, there is very strong support for universal health care. Just over 50% of Americans support a single-payer system, and 65% of voters think every American should have access to quality healthcare. Most Americans would be willing to pay higher taxes so everyone could have care, and put more faith in the government’s ability to hold down health-care costs than the private sector’s. 58% of Americans support a Medicare-for-all system, and a majority of Americans think the government should ensure coverage. A majority of voters in Republican states support Medicaid expansion as well, as do 56% of Virginians, including 55% of Republicans. A majority of Americans also support Social Security, with 65% of Americans in favor of its expansion.

On paid family and sick leave, four in five Americans support legislation requiring employers to offer paid parental leave (and even more support paid sick leave). Other polls have similar findings: 70% support paid sick leave, 67% support paid maternal leave, and 55% support paid paternity leave.

On ISIS, Americans oppose military action, with 65% of Americans against sending special forces to the Middle East, and 76% against sending conventional ground troops.Other polls show that a majority of Americans support the regulation of CO2 as a pollutant, with over half of all parties — Democrats (80%), Republicans (54%), Independents (60%) — in agreement.

U.S. citizens also want better trade policies, with almost two-thirds favoring some form of trade restriction.

And on police reform, 86% of Americans think police should be required to use body cameras, and 87% are in favor of independent, outside investigations when police kill unarmed civilians.

Americans are hemorrhaging democratic socialism!

We are a people who idolize Martin Luther King Jr., Gandhi, Jesus Christ, Mother Teresa — individuals who represent solidarity, kinship and empathy. We respect and agree with the teachings that call us to revolution; to fight for all our fellow human beings; to deeply, truly transform the injustice and corruption long imbedded in human society; to eliminate such a tragic non-necessity as poverty with the institution of fair pay, health care, equal education, decent working conditions and financial reform.

We are a people who lionize the 1776 revolution, who look up to and admire those who stood strong against inequality.

We support Robin Hood-like taxes for the rich and the de-infestation of money from politics. We want a hike in pay for working-class people and health care for all humans sick and injured. We are in favor of destroying the vise-like grip corporations and their owners wield over our economy, regulations on the ghastly melting fumes we are spraying on the protector-bubble surrounding our planet, and heavy oversight of the people bestowed with murderous power and the grave duty of protecting others.

This slew of ideas have come to be known as liberal, as progressive, as democratic socialist, when, in reality, they are simply what we teach our children: don’t be greedy, treat others as you want to be treated, and speak up when you see injustice.

Who cares what they’re called?

As poll after poll shows, we like them.

Americans concur: a compassionate, fair land where babies grow up in equality and human beings are treated with respect and dignity is the country for us.

To make our values fit our reality, all we have to do is vote.Because, after all, as studies show, when people vote, liberals win.

See: http://www.alternet.org/election-2016/bernie-sanders-showing-country-much-more-progressive-you-think?akid=13893.123424.0yRbD9&rd=1&src=newsletter1049167&t=8

10 Brutal Ways the American Safety Net Is Being Shredded

http://www.alternet.org/economy/10-brutal-ways-american-safety-net-being-shredded?akid=13331.123424.rqA_Q7&rd=1&src=newsletter1039872&t=1

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Source: alterNet

Author: Alex Henderson

Emphasis Mine

On the 80th anniversary of the Social Security Act of 1935, which established the social security system in the United States, President Franklin Delano Roosevelt’s New Deal is on life support as the American middle class continues to be squeezed and millions of Americans struggle with poverty.

1. Income Inequality Is Going from Bad to Worse

FDR firmly believed that capitalism cannot function well without a strong middle class, and even auto magnate Henry Ford agreed with him: Ford famously said that American workers needed to be paid a decent wage in order to be able to afford his products. And during the post-FDR America of the 1950s and 1960s, having a robust middle class was great for a variety of businesses. But in 2015—with the gains of the New Deal having been imperiled by everything from union busting to the outsourcing of millions of American jobs—income inequality in the U.S. is a huge problem. The Organization for Economic Cooperation and Development recently released a report on income inequality among OECD members and found that the U.S. was among the worst offenders. The U.S., Mexico and Turkey had some of highest income inequality of OECD countries, while Denmark, the Czech Republic, Finland, Iceland and Belgium fared much better. OECD Secretary-General Angel Gurría commented that “high inequality is bad for growth,” and he’s absolutely right.

2. Republicans Yearn for Social Security Privatization

Although President Dwight D. Eisenhower was a Republican, he supported elements of the New Deal and saw the need for a strong social safety net: in fact, Eisenhower expanded social security, and in 1954, he bluntly asserted that any oligarchs who would “attempt to abolish social security, unemployment insurance and eliminate labor law and farm programs” were “stupid.” But in the 21st century, Republicans have been going after social security with a vengeance. The privatization of social security was proposed by President George W. Bush in 2004, and far-right Republicans, the Tea Party and wingnut lobbying groups like the Club for Growth have been doubling down on the idea of privatizing social security. GOP presidential hopeful Jeb Bush called for social security privatization at a town hall meeting in New Hampshire in June, and he also favors raising the social security retirement age to 69 or 70, which would be especially bad for blue-collar workers who have spent decades in physically demanding jobs.

3. The 1% Continue to Dodge Taxes

FDR had no problem asking the ultra-wealthy to pay their fair share of taxes: the U.S.’ top marginal tax rate rose to 94% in the early 1940s, when the country entered World War II. Taxes for the ultra-rich didn’t go down much under Republican Eisenhower, who lowered the top tax rate to 91% in the 1950s—and after that rate decreased to 28% under President Reagan, it rose to 39.6% under President Clinton and decreased to 35% under President George W. Bush. Looking at the last 80 years of tax history, one sees a clear pattern: the American middle class does much better when the 1% pay their fair share of taxes. And even though the Tea Party tries to paint Barack Obama as a soak-the-rich president, their assertion is laughable because Obama extended the Bush tax cuts and hasn’t been nearly as forceful as FDR or Eisenhower when it comes to taxing the 1%.

4. The Minimum Wage Is Much Too Low

One of the important elements of the New Deal was FDR’s strong belief in a national minimum wage. FDR began to push for a federal minimum wage after taking office in January 1933, saying, “By living wages, I mean more than a bare subsistence level. I mean the wages of a decent living.” And Congress enacted one in 1938, when the U.S.’ first federal minimum wage was set at 25 cents per hour. But in recent years, the federal minimum wage (which was raised to $7.25 an hour in 2009) has not kept up with inflation. Economist Robert Reich has proposed raising the federal minimum wage to $15 an hour, which he sees as a crucial part of economic recovery. And in some cities, including Los Angeles and Seattle, city councils have raised their local minimum wages to that amount. But at the federal level, an increase to even $10.10 an hour (President Obama’s proposal) is a steep uphill climb when both houses of Congress are dominated by far-right Republicans who hate the poor with a passion.

The U.S. desperately needed a New Deal 3.0 after the crash of September 2008 and a program of aggressive reforms. Instead, most of the welfare that followed the Panic of 2008 has been corporate welfare rather than programs to help America’s embattled poor and middle class. Overall, the U.S. has been moving away from the New Deal when it should be reinvigorating it. Below are 10 ways in which the New Deal (and by extension, LBJ’s Great Society) continues to be under attack in the United States.

5. Infrastructure Continues to Deteriorate

The New Deal was great for the U.S.’ infrastructure thanks to programs that built or strengthened everything from roads to water and electric systems to municipal power plants. But in recent years, the American infrastructure has been seriously decaying—and a major wake-up call came on May 12, when an Amtrak train derailed in Philadelphia and eight passengers were killed. But the nation’s railways are only one of the ways in which the U.S.’ infrastructure has deteriorated. According to Ray LaHood (former secretary of transportation for the Obama Administration), 70,000 bridges in the U.S. are now structurally deficient. That is in addition to all the roads that are in desperate need of repair. And when it comes to high-speed rail travel, the U.S. lags way behind Europe (where one can get from London to Brussels in just under two hours or from Madrid to Barcelona in less than three hours).

6. Union Representation Has Reached Historic Lows 

One of the most important pieces of New Deal-era legislation was the National Labor Relations Act of 1935, a.k.a. the Wagner Act, which did a lot to advance labor unions in the U.S.: by the mid-1950s, around 35% of America’s labor force was unionized. But according to the Bureau of Labor Statistics (BLS), a mere 11.1% of salaried U.S. workers (factoring in both the public and private sectors) were union members in 2014. Among private-sector workers, the number was a paltry 6.6%. And the decline of unions has been encouraged bad working conditions: according to the Economic Policy Institute, executives at large companies earned, on average, 296 times as much as their average workers in 2013 compared to only 20 times as much in 1965. But as much as labor unions have declined in the U.S., Wisconsin Gov. Scott Walker (a GOP presidential hopeful for 2016) and his fellow Republicans would like to see them decline even more. Walker recently set a disturbing precedent in that state when he supported anti-union legislation that prohibits private-sector unions from requiring members to pay union dues; Walker has, in essence, made Wisconsin a northern “right to work” state. And it’s safe to say that Walker, based on his actions in Wisconsin, would be among the most anti-union presidents in U.S. history.

7. “Too Big to Fail” Is Bigger Than Ever

Unlike many of today’s extreme-right Republicans and neoliberal corporatist Democrats, FDR was not afraid of offending the banking sector. FDR said of the banksters of the 1930s, “They are unanimous in their hate for me, and I welcome their hatred.” One of the New Deal achievements that banksters detested was the Glass-Steagall Act of 1933, which mandated a strict separation of commercial and investment banking and was designed to prevent another major Wall Street calamity like the crash of 1929. Glass-Steagall served the U.S. well for many years: although there were some tough recessions in the mid-1970s, early 1980s and early 1990s, none of them cut as deep as the Great Depression. But the repeal of Glass-Steagall in 1999 was a major blow to the New Deal and paved the way for the crash of September 2008, clearly the most devastating financial event in the U.S. since 1929. Unfortunately, there was no real banking reform after the 2008 calamity, and as Vermont Sen. Bernie Sanders points out, JPMorgan Chase, Bank of America and Wells Fargo are now “80% larger” than they were in 2007. Critics of the banking sector propose bringing back Glass-Steagall, including Reich (who warns that another major Wall Street crash “is not unlikely”) and Massachusetts Sen. Elizabeth Warren. And Sanders has proposed New Deal-like legislation that would break up the U.S.’ largest banks.

8. Medicare, An Expansion of the New Deal, Is a Major GOP Target

Medicare, which established a single-payer health care system for Americans 65 and older, was not part of the New Deal per se: Medicare came into being in 1965 as part of Democratic President Lyndon B. Johnson’s Great Society (which was very much an extension of the New Deal). And the program proved to be so popular that even Republican President Richard Nixon (who was considered an arch-conservative in his day) expanded Medicare in both 1969 and 1972. But these days, far-right GOP wingnuts in the House of Representatives—especially Rep. Paul Ryan, chairman of the House Ways and Means Committee—have repeatedly called for drastic Medicare cuts and for replacing traditional Medicare with a privatized voucher program. In June, a variety of pro-Medicare groups (including the Alliance for Retired Americans and the Medicare Rights Center) sent a joint letter to the House criticizing representatives who wanted to cut $700 million from the Medicare program.

9. Home Ownership Is Becoming Increasingly Difficult for Many Americans, and the Rent Is Too Damn High

Before the New Deal, five-year or 10-year mortgages were the norm in the U.S., and were unaffordable for most Americans. But FDR saw home ownership as a crucial part of building a strong middle class: between the Federal Housing Administration, the Home Owners’ Loan Corporation and the introduction of 30-year fixed-rate mortgages—all of which came about under FDR—home ownership in the U.S. gradually increased. According to the U.S. Census Bureau, home ownership in the U.S. went from 45% in 1920 and 47% in 1930 to 55% in 1950, 61% in 1960 and 62% in 1970. But the Crash of 2008 has been terrible for American homeowners, resulting in countless foreclosures, and banksters have been allowed to acquire and rent out many foreclosed homes. The private equity firm Blackstone Group had, as of late 2013, bought almost 40,000 homes in the U.S. in order to rent them. To make matters worse, all those post-2008 foreclosures have caused rents to skyrocket all over the country. And the more one pays in rent, the harder it is to save for a down payment on a home. To quote Jimmy McMillan, the rent is too damn high.

10. Wingnut Attacks on Food Stamps Never End

The American food stamps program started on a pilot basis under FDR’s secretary of agriculture, Henry A. Wallace, in 1939 but became permanent when LBJ signed the Food Stamp Act of 1964 into law as part of his Great Society. In recent years, the U.S.’ economic decline has been so painful that, according to the U.S. Department of Agriculture, the number of Americans poor enough to quality for food stamps was 46.2 million in 2014 compared to only 17 million in 2000. Food stamps, as envisioned under the New Deal and the Great Society, are designed to be a stepping stone for the poor—and the benefits (which presently average $127.91 per month per person, according to USDA figures) are hardly lavish. But that has not prevented Republicans in Congress from repeatedly proposing dramatic food stamp cuts during the Great Recession. And in Wisconsin, Gov. Scott Walker has been trying to punish and shame food stamp recipients by subjecting them to drug-testing.

Alex Henderson’s work has appeared in the L.A. Weekly, Billboard, Spin, Creem, the Pasadena Weekly and many other publications. Follow him on Twitter @alexvhenderson.

 

See: http://www.alternet.org/economy/10-brutal-ways-american-safety-net-being-shredded?akid=13331.123424.rqA_Q7&rd=1&src=newsletter1039872&t=1

35 Mind-Blowing Facts About Inequality

Bernie Sanders realizes that runaway inequality is a critical issue. How come the other candidates don’t?

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Source: AlterNet

Author: Larry Swartz

Emphasis Mine

While Hillary Clinton occasionally gives some lip service to the problem of extreme inequality, Bernie Sanders is the only candidate really hammering away at it. He has even blasted the orthodoxy of economic growth for its own sake, saying according to Monday’s Washington Post that unless economic spoils can be redistributed to make more Americans’ lives better, all the growth will go to the top 1% anyway, so who needs it? Sanders might know his history, but the rest of the candidates could use a little primer.

The United States was not always the most powerful nation on Earth. It was only with the end of World War II, with the rest of the developed world in smoldering ruins, that America emerged as the free world’s leader. This coincided with the expansion of the U.S. middle class. With the other war combatants trying to recover from the destruction of the war, America became the supermarket, hardware store and auto dealership to the world. Markets for American products abounded and opportunity was everywhere for American workers of all economic means to get ahead. America had a virtual monopoly on rebuilding the world. Combined with the G.I. Bill of 1944, which provided money for returning veterans to go to college, and government loans to buy houses and start businesses, the middle class in America boomed, as did American power, wealth and prestige. Between 1946 and 1973, productivity in America grew by 104 percent. Unions led the way in assuring wages for workers grew by an equal amount.

The 1970s, however, brought a screeching halt to the expansion of the American middle class. The Arab oil embargo in 1973 marked the end of cheap oil and the beginning of the middle-class decline. The Iranian Revolution in 1979, with more resultant oil instability, combined with the rise of Ronald Reagan’s conservative revolution at home, accelerated the long and painful contraction of the middle class. CCuts in corporate taxes, stagnant worker wage growth, the right-wing war on unions, and corporate outsourcing of work overseas greased the wheels of the middle-class decline and the upper-class elevation. Cuts in taxes on the wealthy, under the guise of trickle-down economics, have resulted in lower government revenue and cuts to all kinds of services. All of which has led to today, an era of national and international inequality unparalleled since the days of the Roaring ’20s. 

Here are 35 astounding facts about inequality that will fry your brain.

1. In 81 percent of American counties, the median income, about $52,000, is less than it was 15 years ago. This is despite the fact that the economy has grown 83 percent in the past quarter-century and corporate profits have doubled. American workers produce twice the amount of goods and services as 25 years ago, but get less of the pie.

2. The amount of money that was given out in bonuses on Wall Street last year is twice the amount all minimum-wage workers earned in the country combined.

3. The wealthiest 85 people on the planet have more money that the poorest 3.5 billion people combined.

4. The average wealth of an American adult is in the range of $250,000-$300,000. But that average number includes incomprehensibly wealthy people like Bill Gates. Imagine 10 people in a bar. When Bill Gates walks in, the average wealth in the bar increases unbelievably, but that number doesn’t make the other 10 people in the bar richer. The median per adult number is only about $39,000, placing the U.S. about 27th among the world’s nations, behind Australia, most of Europe and even small countries like New Zealand, Ireland and Kuwait.

5. Italians, Belgians and Japanese citizens are wealthier than Americans.

6. The poorest half of the Earth’s population owns 1% of the Earth’s wealth. The richest 1% of the Earth’s population owns 46% of the Earth’s wealth.

7. More locally, the poorest half of the US owns 2.5% of the country’s wealth. The top 1% owns 35% of it.

8. Inequality is a worldwide problem. In the UK, doctors no longer occupy a place in the top 1% of income earners, London plays host to the largest congregation of Russian millionaires outside of Moscow, and also houses more ultra-rich people (defined as owning more than $30 million in assets outside of their home) than anywhere else on Earth.

9. The slice of the national income pie going to the wealthiest 1% of Americans has doubled since 1979.

10. The 1% also takes home 20% of the income. This figure is the most since the 1920s era of laissez faire government (under Republicans Warren Harding, Calvin Coolidge and Herbert Hoover).

11. The super rich .01% of America, such as Jamie Dimon, CEO of JP Morgan, take home a whopping 6% of the national income, earning around $23 million a year. Compare that to the average $30,000 a year earned by the bottom 90 percent of America.

12. The top 1% of America owns 50% of investment assets (stocks, bonds, mutual funds). The poorest half of America owns just .5% of the investments.

13. The poorest Americans do come out ahead in one statistic: the bottom 90% of America owns 73% of the debt.

14. Tax rates for the middle class have remained essentially unchanged since 1960. Tax rates on the highest earning Americans have plunged from an almost 70% tax rate in 1945 down to around 35% today. Corporate tax rates have dropped from 30 percent in the 1950s to under 10 percent today.  (N.B.: the maximum tax rate was 91% from WWII until the early 1960’s)

15. Since 1990, CEO compensation has increased by 300%. Corporate profits have doubled. The average worker’s salary has increased 4%. Adjusted for inflation, the minimum wage has actually decreased. 

16. CEOs in 1965 earned about 24 times the amount of the average worker. In 1980 they earned 42 times as much. Today, CEOs earn 325 times the average worker.

17. Wages, as a percent of the overall economy, have dropped to an historic low.

18. In a study of 34 developed countries, the United States had the second highest level of income inequality, ahead of only Chile.

19. Young people in the U.S. are getting poorer. The median wealth of people under 35 has dropped 68% since 1984. The median wealth of older Americans has increased 42%.

20. The average white American’s median wealth is 20 times higher ($113,000) than the average African American ($5,600) and 18 times the Hispanic American ($6,300).

21. America’s highest income inequality is located in the states surrounding Wall Street (New York City) and the oil-rich states.

22. Since 1979, high school dropouts have seen median weekly income drop by 22 percent. Ethnically, the highest dropout rates are among Hispanic and African American children.

23. In 1970, a woman earned about 60% of the amount a man earned. In 2005 a woman earned about 80% of what a man earned. Since 2005, there has been no change in that figure. African-American women earn just 64% of what a white male earns, and Hispanic women just 56%.

24. Over 20 percent of all American children live below the poverty line. This rate is higher than almost all other developed countries.

25. Union membership in the US is at an all-time low, about 11% of the workforce. In 1978, 40 percent of blue-collar workers were unionized. With that declining influence has come a concurrent decline in the real value of the minimum wage.

26. Four hundred Americans have more wealth, $2 trillion, than half of all Americans combined. That is approximately the GDP of Russia.

27. In 1946, a child born into poverty had about a 50 percent chance of scaling the income ladder into the middle class. In 1980, the chances were 40 percent. A child born today has about a 33 percent chance.

28. Despite massive tax cuts, corporations have not created new jobs in America. The job creators have been small new businesses that have not enjoyed the same huge tax breaks.

29. More than half of the members of the United States Congress, where laws are passed deciding how millionaires are taxed, are millionaires.

30. Twenty five of the largest corporations in America in 2010 paid their CEOs more money than they paid in taxes that year.

31. In the first decade of the 21st century, the U.S. borrowed $1 trillion in order to give tax cuts to households earning over $250,000.

32. In 1970, there were five registered lobbyists working on behalf of wealthy corporations for every one of the 535 members of Congress. Today there are 22 lobbyists per congressperson.

33. In 1962, the 1% household median wealth was 125 times the average median wealth. In 2010 the divide was 288 times.

34. During the Great Recession, the average wealth of the 1% dropped about 16 percent. Meanwhile the wealth of the 99% dropped 47 percent.

35. Between 1979 and 2007, the wages of the top 1% rose 10 times more than the bottom 90 percent.

Larry Schwartz is a Brooklyn-based freelance writer with a focus on health, science and American history. 

See: http://www.alternet.org/economy/35-mind-blowing-facts-about-inequality?akid=13299.123424.f5Kr9w&rd=1&src=newsletter1039283&t=3

.1% of America Now Controls 22% of Wealth: The Wealth Gap Has Killed the Middle Class

The stats are more damning than we thought.

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Source: AlterNet

Author: Natalie Shure

Emphasis Mine

 A new working paper by London School of Economics professors Emmanuel Saez and Gabriel Zucman sheds some very unflattering light on the American wealth gap, which has reached levels unseen since the Roaring ‘20s. The wealth gap has been overtaking the income gap as a popular cultural topic since Thomas Piketty’s splashy Capital in the 21st Century, and Saez and Zucman’s work fills in some crucial blanks to flesh out Piketty’s contentions. Saez and Zucman conclude that the top .1% of America now controls 22% of the aggregate wealth – an especially troubling figure when examined in the context of America’s stubbornly conservative political landscape.

Piketty – who has worked alongside Saez in the past – sealed his rock star status this year with his argument that the megarich hold an increasing share of capital in the Western world. To combat the potentially frightening fallout, Piketty controversially recommends a worldwide progressive tax on wealth instead of income. How exactly this might work has been the topic of much squabbling, nicely boiled down by James Galbraith in Dissent:

In any case, as Piketty admits, this proposal is “utopian.” To begin with, in a world where only a few countries accurately measure high incomes, it would require an entirely new tax base, a worldwide Domesday Book recording an annual measure of everyone’s personal net worth. That is beyond the abilities of even the NSA. And if the proposal is utopian, which is a synonym for futile, then why make it?

That’s where Saez and Zucman come in. Their paper ambitiously takes up the challenge of measuring a century of American wealth, the existing data on which is notably scarce. To do this, the duo had to synthesize information from a variety of sources. They explain their methodology in a post for the Washington Center for Equitable Growth:

We try to measure wealth in another way.  We use comprehensive data on capital income—such as dividends, interest, rents, and business profits—that is reported on individual income tax returns since 1913. We then capitalize this income so that it matches the amount of wealth recorded in the Federal Reserve’s Flow of Funds, the national balance sheets that measure aggregate wealth of U.S. families. In this way we obtain annual estimates of U.S. wealth inequality stretching back a century.

They found that the level of wealth controlled by the top .1% of Americans has followed a “spectacular U-shape evolution.” That is, the hyper-elite held up to 25% of the country’s wealth on the eve of the Great Depression. These resources were then more democratically distributed for four decades – the .1% share was only 7% in 1977 – only to flip

The Return of the Roaring Twenties
Photo Credit:
Emmanuel Saez and Gabriel Zucman
Click to enlarge.

While the top .1% got richer, so too did the Bottom 90% get poorer. Saez and Zucman find that the portion of total wealth held by the bulk of America peaked in 1980 at 36%. Today, the bulk of America hangs onto a mere 23%, and the number seems poised to tumble further.

back to 1920’s numbers in the ‘80s and beyond.

The Rise and Fall of Middle Class Wealth.
Photo Credit:
Emmanuel Saez and Gabriel Zucman
Click to enlarge.

Unsurprisingly, the majority was also hit far harder by the economic crisis than their monied counterparts, for whom “the Great Recession looks only like a small bump along an upward trajectory.” The shrinking 90%, Saez and Zucman contend, is a result of rising debt, especially from mortgages and student loans.

Their work provides a persuasive counterpoint to the criticism that the soaring .1% owes itself more to the rise of cultural megastars in entertainment and tech than it does to structural trends. The .1% is surely just stocked with the likes of anomalies like Mark Zuckerburg and J.K. Rowling, dissenters allege. (According to Piketty’s own research , these unicorns account for only 30% of the top.) Zucman and Saez add weight to the viewpoint that elite wealth increasingly comes from preexisting wealth, not labor or accomplishments.

As evidence of the staggering American wealth gap mounts, the debate about it will likely shift from its allegedly dubious existence to whether or not it matters enough to be changed. The conservative side of this discussion is likely to be disingenuous – not to mention, depressingly rigged by the ever-strengthening correlation between American capital and political agency.

Take, for example, the Right’s tone-deaf response to Piketty’s Capital in the 21st Century. In an analysis of the conservative critique, Brian Beutler at the New Republic noted that “Conservatives don’t like Piketty’s policy remedy, and other far-reaching proposals to reduce or curb the growth of inequality. That’s in part because they don’t agree with his normative premise that massive wealth concentration is undemocratic.” Garrett Jones at Reason went so far as to argue that “the best way to defuse the situation is to teach tolerance for inequality” – which sounds pretty darn close to, ‘just get over it, poors!’

But to deny that the American wealth gap is undemocratic is to deny decades of policies that have colluded not only to concentrate wealth at the top, but to solidify it as the primary means of political influence. Saez and Zucman point out that the reasons for the exploding wealth gap are similar to the oft-documented causes of the more-scrutinized income gap – deregulation at the top, and degraded labor and debt at the bottom. If this weren’t enough to cast serious doubt on the meritocracy invoked by the debunked American Dream, capital is now more inexplicably tied to basic survival than ever before.

When considering the wealth gap, you must also consider political developments like the landmark decision in Citizens United vs. FEC, which famously ruled that political spending by corporations cannot be legally capped. This obviously ensures a serious entanglement of money and politics. And while the Court argued that this spending will be subject to the pressure of shareholders, it would be batty to posit that their interests aren’t aligned. After all, the 1980s ushered in an era of thought that maximizing shareholder value should come at any cost – one source of the very wealth discussed by Saez, Zucman and Piketty. In other words, not only does a Reagan-inspired ideology of deregulation and taxing boost corporations and the people who invest in them, it also gives them free reign over the American political system.

As the ultra-rich have been enriched and empowered, the middle class and poor have weathered an equal and opposite reaction. As globalization and anti-union sentiments push former middle-class positions overseas, higher education has become a practical requirement for basic livelihood, but accessing it comes with a price. Saez and Zucman find that student loans are one of the main sources of debt weighing down the bottom 90%. Perhaps the most clearcut example of poverty barring citizens from civic participation are the rise of voting restrictions that disproportionately affect the poor—often backed by the same Republicans who fight against basic protections of the middle class. All things considered, it’s no surprise that a recent Princeton study deemed the United States to be an oligarchy instead of a democracy. Their reasons had all to do with the toxic combination of the American wealth gap and pro-corporate politics : “The central point that emerges from our research is that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy,” wrote researchers Martin Gilens and Benjamin Page, “while mass-based interest groups and average citizens have little or no independent influence.” (Indeed, monied interests seem to be getting their way regardless of the party in power – as noted by The Nation, the Obama-era rich are wealthier than ever.)

So where do we go from here to salvage democracy and avoid calamity? Saez and Zucman have a few ideas:

What should be done to avoid this dystopian future? We need policies that reduce the concentration of wealth, prevent the transformation of self-made wealth into inherited fortunes, and encourage savings among the middle class. First, current preferential tax rates on capital income compared to wage income are hard to defend in light of the rise of wealth inequality and the very high savings rate of the wealthy. Second, estate taxation is the most direct tool to prevent self-made fortunes from becoming inherited wealth—the least justifiable form of inequality in the American meritocratic ideal. Progressive estate and income taxation were the key tools that reduced the concentration of wealth after the Great Depression. The same proven tools are needed again today.

In short, as long as accrued capital continues to overshadow earned income as the determining factor of having and having not, let’s be honest about it and tax what really matters. Only then will Americans have any hope of getting by based on on what they do, rather than who they are.

Natalie Shure has written for the Atlantic, Gawker, Slate, Metro, New York Observer and the Awl.

 

 

See: http://www.alternet.org/economy/1-america-now-controls-22-wealth-wealth-gap-has-killed-middle-class?akid=12466.123424.2jkFMn&rd=1&src=newsletter1027058&t=8