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U.S. Income Equality May Equal Mexico’s by 2043
Two reports out this week offer a telling glimpse into the direction of the nation.
- The number of U.S. households with a net worth of at least $1 million jumped 16 percent last year after dipping sharply during the financial crisis, according to a new report. The Spectrem Group study also found “ultra-high net worth families—those with at least $5 million—grew 17 percent last year to 980,000.
- Some 6 percent of all workers were living in poverty in 2008, up from 5.1 percent in 2007—the highest proportion since 6.2 percent in 1994, according to the U.S. Bureau of Labor Statistics. In 2008, some 8.9 million adults were among the “working poor”—1.4 million more than in 2007.
These are more than one-off data. They are the most recent indicators of the long-term trend toward growing inequality in this nation. The gap between the annual income of the top 10 percent and the rest of us has been widening sharply for the past 30 years. According to one analyst—who estimates that income inequality in the United States is now greater than it has ever been over the past century—the wealthiest 10 percent took between 30 percent and 35 percent of total national income from the early 1940s to the early 1980s. After that, their share rose to its current 45 percent to 50 percent level.
As the Economic Policy Institute (EPI) points out, the 400 American households with the highest incomes also have enjoyed a much faster pace of income growth than the vast majority of households.
The median pre-tax household income for a family of four in 2007 was $50,233, while the top-earning 400 households earned a median $345 million, almost 6,900 times as much income.
Put another way: If our income had kept pace with compensation distribution rates established in the early 1970s, we would all be making at least three times as much as we are currently making. How different would your life be if you were making $120,000 a year, instead of $40,000?
What does it mean for a nation to have an income gap that’s 6,900 times that of the median—not the lowest income, the median-income?
For one, studies show a correlation between unequal societies and an increase in illness and social problems, including mental illness and drug use. The lower the income gap in a society, the healthier it is overall.
Makes sense. Because a massive and growing income gap also means what Business Week, not exactly a radical media outlet, calls “the rise of the permanent temporary workforce.” One in which we see falling pay, vanishing benefits and where no one’s job is secure. When people work one or more jobs and still can’t afford health care or hope for retirement security—and when they can’t count on having a job at all—illness, addiction and other social ills quickly follow.
What does massive and growing inequality mean for the United States? It means that unless lawmakers directly address the crisis through coordinated policies—like establishing a national manufacturing policy and creating tax incentives for corporations to remain in the United States rather than ship jobs overseas, for starters—the United States by 2043 will have the same income inequality as Mexico.
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7 Comments
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Put simply, we’re rapidly becoming a third world country! And if that doesn’t scare the hell out of all of you it should! As long as our government continues to allow corporations to outsource jobs and import ‘cheap’ labor the decline will continue. I expect it will even escalate. Greed is a powerful drug and the more money and power some people achieve the more they want. And now that Bill Gates has once again been knocked off his richest man in the world pedastal it probably won’t be long before he’ll be back in Washington once again begging Congress for more H1-B visas!
To build a political movement capable of changing the growing income disparity will require building a network of news and political consciousness independent of the corporate elite system presently incontrol of our culture and the masses sense of posibilities. Good luck to do that!
My grandfather told me in 1957 that by the year 2010 there would be a depression that makes the depression of the 30’s look like a Sunday school picnic. People won’t be able to make enough to buy food and will be eating each other to survive. ( you better make sure to fatten up your neighbor ) Looks like he was right.
Are you ready for a $100 loaf of bread?
The way to stop this insanity is to do what Japan did in the 60′s. Make it illegal to take our currency out of the country. Trade should be just that, trade. No money exchanged. A bushel of apples for a bushel of bananas, etc.
There are three things that are causing our decline to third world nation status.
1.Our constant increasing trade deficit.
2.Our insistence on interfering with the internal workings of every nation on earth. (we are not the worlds police force. Foreign nations are building up their militarys as a deterrent to American aggression)
3.Our government constantly printing up treasury bills to sell to the Federal Reserve at interest. (The Constitution of the United States section 8 , Powers of Congress, states: To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures. The United States Government should be printing our money not having a private banking cabal, The Federal Reserve, printing it for us and then loaning it to the government at interest. Yes the Federal Reserve is a private bank. They are neither Federal nor do they have any reserves.
I am 100% in agreement with everything your saying Bruce. One thing I’ve seen that could cut this crap and bring back the Treasury notes is HR 1207 and S 604 these bills would audit the “Fedaeral Reserve.” There’s only one problem, it might work to well. One fear among people wanting to audit the FR is that it would halt the economy altogether and that the damage would be irepairable. I’m not really sure myself, but I know this plutocracy can’t be allowed go on forever.
When are we citizens of this Country going to demand that the gutless congress impose higher tariffs on imports and raise the taxes on the top 10%?
Representative Peter DeFazio of Oregon had introduced a bill to Congress back in April of ’09 called “H.R. 1875 Emergency Commission to End The Trade Deficit” which would, among other things, actually enforce all of the rules in the existing trade agreements, thereby making it much more difficult for American companies to ship any more jobs overseas. The bill was submitted to the House Ways and Means Committee in April of 2009 and not much has been done about it since. So my suggestion to the readers of this blog is to contact their elected representative and urge them to get moving on this bill and others like it.
http://www.contactingthecongress.org/
The full article, excerpts below, is from the World Socialist Web Site: http://www.wsws.org
link to full article:
http://www.wsws.org/articles/2010/mar2010/forb-m12.shtml
World’s billionaires grew 50 percent richer in 2009
By Andre Damon
12 March 2010
2009 will be remembered by millions of ordinary people as the year they lost their job, their house, or the prospect of an education. For the rich, however, it was a bonanza.
The world’s billionaires saw their wealth grow by 50 percent last year, and their ranks swell to 1,011, from 793, according to the latest Forbes list of billionaires.
The combined net worth of these 1,011 individuals increased to $3.6 trillion, up $1.2 trillion from the year before. On average, each billionaire had his or her wealth increase by $500 million.
Four hundred and three billionaires reside in the United States. They constitute just 0.00014 percent of the country’s total population, but control 8 percent of the national wealth. Each of these individuals holds over 300 million times more wealth than the average US resident.
…
Carlos Slim Helú, a Mexican telecommunications tycoon, moved up to the first position on the list at $53.5 billion, beating out Americans Bill Gates ($53 billion) and Warren Buffet ($47 billion). The wealth of all three men rose dramatically. Over the last several years Slim Helú made roughly $27 million a day compared with the average daily income of $16.50 for Mexican workers.
…
Aside from direct government handouts to the banks and super-rich, the major driver of the recovery of corporate profits—and thus the stock market—was productivity growth and corporate downsizing.
In 2009, the unemployment rate rose from 7.7 to 10 percent, three million jobs were lost, and wages fell dramatically. Millions of families lost their homes and became dislocated. But productivity, the amount of output that is produced from each hour of work, rose by 7 percent.
The money freed up through the destruction of social programs, higher employee output, and corporate restructuring has found its way into the pockets of the people on Forbes’ list.