Income and Wealth of the Rich Are Growing At Our Expense
Our income and wealth are under attack! We’re in a class war. It’s the corporations and the very wealthiest against all the rest of us – and we’re losing! [Let me explain.] Words: 996
Wealth of Top 1% of American Households Continues to Escalate
In 1962 the wealthiest 1 percent of American households had 125 times the wealth of the median household – now it’s 190 times as much. Things started to slow down for average people in 1964 when there was a large tax cut and by the mid-’70s the rise in the wealth of the middle class stalled. From 1975 to 2010 median family income rose… less than six-tenths of 1 percent per year.
Income of the Richest 1% of Americans is Soaring
Briefly, when taxes went up under Clinton, median income rose… and then, after Bush cut taxes, declined. (Keep in mind that this is median family income. In the ’50s and ’60s, family income was usually earned by a single person. Today, family income normally comes from at least two people.) At the same time, income for the richest soared. In 1979 the richest 1 percent of Americans earned 9 percent of all U.S. income. Now they earn 24 percent of all U.S. income. One percent of Americans earn nearly one-fourth of all the income in the country.
Don’t forget to sign up for the FREE weekly “Top 100 Stock Market, Asset Ratio & Economic Indicators in Review”
The Rich are Getting Richer
The crashes of 2001 and 2008 and the recessions that followed have only made things worse… From 1990 to 2005, adjusted for inflation — the minimum wage is down 9 percent, production workers’ pay is up only 4.3 percent over the last 15 years [while, during] the same time, the rich get richer: corporate profits are up 106.7 percent, the S&P 500 is up 141.4 percent, CEO compensation is up 282 percent. Call it transfer of wealth – or call it class warfare.
What’s Wrong with the Rich Getting Richer?
Countries with wide income inequality don’t lead the world in research, technology, industry, and innovation. They’re unstable. They have large underclasses. They have high rates of crime. They have little opportunity. In such countries the rich have disproportionate power. They take control of all aspects of society, especially government, the police, and the judiciary. They become self perpetuating… Countries with high levels of income inequality are third-world countries.
What’s the Solution to Wealth Inequality?
Here’s how regular people can deal with cultures of high wealth inequality:
1. [We can implement] a progressive tax structure. As people move up the income ladder they pay a higher rate at each rung. Unearned income –from dividends and capital gains – is taxed at least as high as earned income (money that people actually work for.) Tax cuts for the wealthy mark, with great precision, the decline in fortunes of ordinary Americans. Tax cuts for the wealthy mark, with equal precision, the increase in inequality. We had a chance to slow the process by letting the last round, the Bush tax cuts, expire.
We’ve lost that round.
2. People can become educated and move on up. Back in the ’60s, when I was growing up,… if a student didn’t get a scholarship, he or she could easily earn enough to pay tuition with a summer job… Today, students have to borrow. The median student debt for an undergraduate degree – forget about a doctorate, law school, and med school – is $20,000. The first, and truest, lesson you learn when you go to college is how to be in service to the banks.
We’ve lost that battle.
Lack of income/wealth inequality means that: 1. “Children from low-income families have only a 1 percent chance of reaching the top 5 percent of the income distribution, versus children of the rich who have about a 22 percent chance and 2. children born to the middle quintile of parental family income ($42,000 to $54,300) had about the same chance of ending up in a lower quintile than their parents (39.5 percent) as they did of moving to a higher quintile (36.5 percent). Their chances of attaining the top five percentiles of the income distribution were just 1.8 percent.” (Understanding Mobility in America, April 26, 2006, Tom Hertz, American University.)
3. Working people can organize and form unions. Unions do more than raise wages. They improve working conditions and safety. They provide protection against abuse, intimidation and wrongful dismissal. Non-union employers have to compete, partly to keep out unions, so the existence of unions helps everyone. Unions also have political power, they spend money and mobilize their members to vote. In the 1940s a third of private sector employees were unionized. Now it’s down to just 7.2 percent. Unions only remain strong in the public sector, where membership is 37 percent.[Unions are under attack everywhere and losing the battle – everywhere.]
4. [Americans] can run to another country that is richer and freer. [In the past] when a country was, or became, a third-world country, people could run to some place richer and freer – like America.
When America becomes Mexico, [however,] where are you gonna run to?
*http://www.alternet.org/story/149531/ (Larry Beinhart is the author of “Wag the Dog,” “The Librarian,” and “Fog Facts: Searching for Truth in the Land of Spin.” His latest book is Salvation Boulevard. Responses can be sent to firstname.lastname@example.org.)
- The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
- Permission to reprint in whole or in part is gladly granted, provided full credit is given as per paragraph 2 above.
- Sign up to receive every article posted via Twitter, Facebook, RSS feed or our FREE Weekly Newsletter.
- Submit a comment. Share your views on the subject with all our readers.