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Entries tagged "wealth inequality"Page 1 • 2 Next
September 12, 2012 · By Karen Dolan
We can’t seem to stop having record numbers of people living in poverty in the United States. The richest continue to get richer and the rest of us continue to see our incomes get lower and lower.
New Census Bureau figures released today, show that 15 percent of the U.S. population lived in poverty in 2011. Over 46 million Americans lived at or below the poverty threshold of a household income of $23,201 per year for a family of four. One in five of our children live in poverty and over one-third of black and Latino children are struggling through impoverishment.
In 2011, we saw the first one-year increase in income inequality since 1993. The top 5 percent gained 5.3 percent in income in 2011 over 2010. The lowest quintile saw little change, but the second-lowest, middle, and fourth-lowest quintiles all experienced a decline in income over the year. Sadly, those who “occupied” Wall Street and city squares across the country in 2011, were right: All of the income gains have concentrated at the top, while the rest of us saw a deterioration or stagnation in our wages and income.
This data also confirms that safety programs work. According to the Census Bureau, unemployment benefits kept 2.3 million of us out of poverty in 2011, Social Security benefits kept over 21 million people out of poverty and, if we count the nutrition aid of the Food Stamps program as income, it would show that 3.9 million people were lifted above the poverty line in 2011.
Increasingly, all of the boost in wealth is concentrated at the top and record numbers of poverty persist, while the middle and lower-economic classes are losing ground. Now is not the time to lower taxes on the wealthiest by cutting proven, effective anti-poverty measures such as Unemployment Insurance, Supplemental Nutrition Assistance, the Earned Income Tax Credit, Social Security, and new coverage benefits gained from the health care reform law.
The rich shouldn't be rewarded while the rest of struggle.
September 5, 2012 · By John Cavanagh
This post originally appeared on Yes! Magazine's New Economy blog.
This fall, the U.S. Congress is going to wage a pitched, dragged-out battle over cutting roughly $120 billion a year to solve the so-called deficit crisis. Vital things like teachers’ jobs and Medicare could well get cut.
The Right is already launching new coalitions to push for an austerity budget, calling for cuts in “wasteful government spending,” including key safety-net programs like Medicare, Medicaid, Social Security, and food stamps. America has overspent, they say. America is broke. But at the same time, they are calling for an extension of the Bush tax cuts and ruling out cuts in military spending—both policies that will increase the deficit.
It doesn’t have to be this way. My colleagues at the Institute for Policy Studies (IPS) have identified seven steps that, together, more than eliminate the deficit while making the country more equitable, green, and secure.
These proposals, from the IPS study called “America is Not Broke,” would also address the two deficits that author David Korten says do more to erode our society than the fiscal deficit does: our social deficits (rising poverty and inequality) and environmental deficits (starting with the climate crisis).
More Fairness, Less Deficit
Our first three proposals could bring in $329 billion a year; this alone would solve the deficit problem while helping to close the yawning inequality gap.
- 1. Tax Wall Street: $150 billion per year. A tiny tax on stock and derivatives transactions, which several European countries are on track to adopt, would discourage Wall Street speculation, fill the hole in the deficit left by the Bush tax cuts, and leave plenty left over to fund lots of programs. The National Nurses Union and many other allies are fighting hard for this.
- 2. Tax Corporations and Stop Tax Haven Abuse: $100 billion per year. The Financial Accountability and Corporate Transparency coalition has pointed out that one of the main ways that corporations avoid paying taxes is by declaring their profits in overseas tax havens like the Cayman Islands.
- 3. Tax the Wealthy Fairly: $79 billion per year. Our rigged tax code lets CEOs pay a lower tax rate than their secretaries do (as Warren Buffett keeps pointing out). The proposed Fairness in Taxation Act (HR 1124) would address this by adding five additional tax brackets for incomes over $1 million.
These three policy changes would go a long way toward making our society more equal, and that means better health, too. There is a terrific body of global evidence, a lot of it compiled by British researchers Richard Wilkinson and Kate Pickett, that more equal societies are much healthier. People at all income levels live longer; they are more fulfilled; and there is less violence. The United States, a relatively equal society as recently as the 1970s, is now off the charts in terms of wealth and income inequality. It doesn’t have to be that way. Just as we created a more just and vibrant economy and a strong middle class through fair taxes between 1940 and 1980, we can do it again through progressive taxation.
More Green, Less Pollution
The second source of revenue would make the economy more green, a key imperative in a world where the environmental crisis is now as deep as the economic one. We found two simple ways to raise revenues and help save the environment.
- 4. Tax Pollution: $75 billion per year. A tax on the carbon content of fossil fuels would reduce our dependence on oil while cutting air pollution and emissions of greenhouse gases. And, as economist Robert Frank pointed out on August 25 in The New York Times, “News that a carbon tax was coming would create a stampede to develop energy-saving technologies.”
- 5. End Fossil Fuel Subsidies: $12 billion per year. This call should unite left and right. Why would anyone want to maintain a giant government subsidy to an industry that is the world’s major contributor to fossil-fuel emissions? 350.org has made this a centerpiece of their work. We should be able to win this.
More Savings, Less War
Finally, there are simple ways to cut the military while making the country and the world more secure. More than half of government discretionary spending now goes to the military. Congress has long avoided cuts, in part because they equate military spending with jobs, but IPS has pointed out that almost every other industry employs more workers per dollar than the military. Plus, there is now bipartisan support for two sets of significant cuts.
- 6. End Military Waste: $109 billion per year. A broad spectrum of experts has found over $100 billion a year in waste that could be eliminated with no sacrifice in security. Three recent commissions, two of them bi-partisan, have recommended roughly $1 trillion in military cuts over 10 years.
- 7. Close a third of our overseas bases and our Iraq operations: $21 billion per year. Over two decades after the Cold War ended, the United States still maintains roughly 1,000 military installations in other countries. A majority of the President’s own deficit commission, which includes three Republican senators—the National Commission on Financial Responsibility and Reform—backed a proposal to close one third of our overseas military bases.
These seven simple steps would raise close to $550 billion a year. They would quickly erase the fiscal deficit and return the country to a healthy budget surplus. There would be hundreds of billions left to invest in key sectors that could make the country more secure, more green, and more equitable: care jobs, green jobs, infrastructure jobs.
In other words, this plan could help erase the nation’s dangerous social and environmental deficits.
Many groups—from Jobs with Justice to National People’s Action to the AFL-CIO—are organizing to counter a push by the Right to use the deficit crisis to shred social programs and our nation’s safety net. Let’s up the ante and spread the message. America is not broke. We have plenty of resources to rebuild shared prosperity in the U.S.
March 13, 2012 · By Sam Pizzigati
We can wait all we want, but sometimes history never gets around to repeating.
History — more specifically, the history of the Great Depression in the 1930s — has been a constant presence in America’s political discourse ever since the Great Recession started slamming us in 2008.
Analysts have drawn all sorts of useful and entirely appropriate parallels between the run-up to the Great Depression and the years before the Great Recession. And inequality — the gap between America’s rich and everyone else — has figured prominently in those parallels.
In 1928, the year before the stock market crash, America’s richest 1 percent were taking in just shy of 24 percent of the nation’s income, a modern-day high.
In 2007, the year before our Great Recession's Wall Street meltdown, America’s top 1 percenters were pulling in 23.5 percent of the nation’s income, the top's highest share since 1928.
But the parallels go even deeper.
The early years of both the Great Depression and the Great Recession hammered incomes at America’s economic summit. In 1928, the nation's top 1 percent were averaging just over $400,000, in today's dollars. Two years later, that top 1 percent average income had dropped by half, to just over $256,000.
The early years of the Great Recession had much the same impact. America’s top 1 percent averaged $1.44 million in 2007, the year before Wall Street's epic meltdown. In 2009 top 1 percenters averaged over $520,000 less, more than a 36 percent dropoff.
Back in the Great Depression, after the initial income shock for the super rich, the shocking would continue. Top incomes kept dipping as the Great Depression wore on. Average top 1 percent income didn’t reach the $256,000 level of 1930 again until 1936 and didn’t regain 1928’s $400,000 level — the inflation-adjusted pre-Great Depression high-water mark — until decades later, in 1965.
By that time, the incomes of America’s bottom 90 percent had jumped from just over $9,400 — their 1928 level — to nearly $28,000.
In other words, in the three decades after the onset of the Great Depression, the incomes of America’s top 1 percent — after you take inflation into account — essentially didn’t rise at all. Over those same years, Americans in the bottom 90 percent saw their average incomes triple.
No gains for America’s rich. Big gains for average Americans. By the 1960s, those average Americans were sharing in the wealth their labor created. The United States had become a fundamentally more equal and prosperous place.
A history worth repeating? Absolutely. But this history, new data released earlier this month indicate, isn't repeating. Not at all. Our contemporary rich have already resumed their rocket ride to ever grander fortune.
The rich back in the 1930s were still reeling three years after the Great Depression hit. The rich today, we now know from the newly released data, are reeling no longer.
The new data comes from University of California at Berkeley economist Emmanuel Saez, the scholar who has revolutionized our understanding of America’s highest incomes with his work over the last decade.
Saez has spent this last decade parsing IRS statistical records to tease out the incomes of America’s richest, over time, and compare the incomes of these rich — in the top 1, top 0.1, and top 0.01 percent — to the incomes of much more average Americans.
Earlier this month, using newly available IRS data, Saez updated his numbers, to take the U.S. income story through 2010. The Great Recession, Saez found, is most definitely no longer following the Great Depression script.
Back in the early 1930s, incomes for America’s top 1 percent were still dipping two, three, four, and more years into the Great Depression. In our Great Recession, the dipping of high incomes hasn't even lasted two years.
In 2010, the incomes of America’s top 1 percent did not decline. These incomes rose sharply — by an average $105,638, or 11.6 percent, over 2009 levels.
Incomes for America’s bottom 90 percent? These incomes did continue to dip in 2010 — by $127, to $29,840. Some perspective: In 1973, after adjusting for inflation, America’s bottom 90 percent took home an average $33,795.
So where do all these numbers leave us? Back in 1929 Coca-Cola filled the airwaves with what would prove to be an all-time classic advertising slogan, “the pause that refreshes.” Our Great Recession, if current income trends continue, may prove to be the pause that refreshes . . . inequality.
The Great Depression began a hammering of incomes at the top that left the United States more equal. The Great Recession, the new Emmanuel Saez data suggest, will have nowhere near that impact. Our rich appear about to regain most all the ground they lost in the Great Recession's early stages.
But we need some caveats here. They marched and rallied and staged walkouts and sitdowns. They elected candidates who fought to level up America’s least fortunate and level down our most fortunate and powerful few.
All this mobilizing would take years to make a significant equalizing impact. We today can make a significant equalizing impact, too. We just need to get going. History will only repeat if we make it.
February 12, 2012 · By Matias Ramos
Bill Moyers, the journalist and political commentator who first came to prominence as LBJ's press secretary, calls out the plutocracy and recommends Too Much, an IPS newsletter.
In America’s Plutocrats Play the Political Ponies, Sam Pizzigati described how the current electoral process resembles a horse race. "Wealthy connoisseurs of political talent pick a candidate. These wealthy connoisseurs then keep that candidate racing until they lose interest," wrote Pizzigati. You can watch an excerpt from Moyers' new show here:
To get the "Too Much" newsletter in your inbox every Monday, click here.
February 6, 2012 · By Lacy MacAuley
This past weekend, I stood in the rain at Occupy DC as police in riot gear trampled through the camp at McPherson Square. I ran as they charged the crowd with police horses. I watched as they grabbed clothing, books, tents, shoes, and other personal property, and tossed it all into dumpsters.
Some are asking how the Occupy movement will accomplish anything now. I say, it already has. It has already changed our world.
I marched through New York in September of last year on the first day of Occupy Wall Street. I laid down my sleeping bag in the open air in Zuccotti Park on the first intense nights of the occupation. Then, I brought my sleeping bag back to Washington DC, where I live. With some hopeful companions, I began occupying McPherson Square on K Street, home to some of the most corrupt lobbyists in the world. We held meetings in the cool October air, not yet the biting chill of winter. And we went to work building a library, a clinic, a kitchen, a media center — a small village. A second camp quickly emerged in another part of town, within sight of Congress.
I occupied because the rich are too rich, because Wall Street and the corporations control too much, and because all of our governments won’t even begin to seriously address some of the biggest challenges of our time, like climate change. I occupied because, like so many in the 99 percent, I am fed up with the status quo. I occupied because people are suffering all over the country and all over the world, while the power to build a better future is in our hands.
Now, most of Occupy DC has been emptied. Many occupiers were made homeless. Miraculously, the cops spared my humble little tent, with a newly broken pole, but sleeping in the park would now likely get me arrested. (I hadn’t slept at the park recently anyway. Another occupier was staying in my tent.)
Was it all worth it? Yes, and I’ll do it again.
This week, the Senate Budget Committee will hold a hearing about inequality and social mobility, hearing from experts like Sarah Anderson at the Institute for Policy Studies, who has published studies on the CEO-worker pay gap for 18 years. Would the Senate be doing this before Occupy? Probably not.
Mitt Romney is struggling to shed the stigma of being a “one percent candidate,” because his Richie Rich image continues to harm his campaign. Even Newt “Huge Tiffany’s Tab” Gingrich is making jabs at Romney’s wealth. Would this have happened before Occupy? Probably not.
One of President Barack Obama’s favorite stump speeches these days is on making the wealthiest Americans and biggest corporations pay their fair share, which would reduce inequality in this country. Would this have become a favorite presidential refrain before Occupy? Probably not.
A thousand plans are afoot to “re-occupy” this spring. But even if the camps were to end now, the Occupy movement has made millions of Americans think harder about our economic, environmental, and political realities, and that has the potential to change everything. It has created spaces for us to bring a bold new world to life. It has sparked conversations and ideas that no police barricade can hold back. And it has opened dreams that we are all still dreaming — whether we campers are allowed to sleep or not.
Lacy MacAuley wears two hats, which isn’t always easy. She is the media relations manager at the Institute for Policy Studies and a participant in the Occupy movement. www.ips-dc.org