Income Gap Widens Between all Economic Classes
Welcome to the third world, America. Welcome to a future of violence and bloodshed, of turmoil and turbulence and of growing inequality. Welcome to our frightening present in which our wealth as a people is controlled by the hands of a microscopic fragment of the population.
This election season has become the manifestation of critical problems in our democracy. We are bombarded daily with a barrage of political ads online or on TV. After all, the day wouldn’t be complete without hearing “I’m [insert candidate name here] and I approve this message.”
Yet, between the negative attack ads and the blatant misinformation, no one seems to be addressing what is really happening to the American people, or the profound impact the recession has on the middle class and income in this country.
The pundits and talking heads often mention “class warfare” and “redistribution of wealth,” pretending that President Barack Obama is pursuing an agenda that is radical and is taking wealth from those who earned it and giving it to the poor, lazy masses.
Although this is far from the truth, the notion of wealth redistribution is not. Over several decades, there has been a dramatic upward shift in wealth distribution, as the income gap between the middle class and the very wealthy has become a gorge, weakening the strong, foundational middle class that was once the engine of growth in this country.
Two weeks ago, the Census Bureau Organization (CBO) released a report on jobs, income and the status of our economic recovery for the year 2011. According to the report, 46.2 million Americans remain below the poverty line.
This is a whopping 15 percent of the population, a number unchanged from 2010, which was the highest in nearly half a century.
Median household income, hovering just above $50,000 a year, fell 1.5 percent last year and is down 8 percent since before the recession hit in 2007.
This means that half of all American households earn $50,000 or less every year, yet, the bottom 50 percent of income earners have slightly less than 20 percent of the nation’s wealth.
One fifth of the pie now goes to half the people in the room, and to add insult to injury, our standard of living has plummeted. This means that the fewer dollars we now have don’t stretch as far as they did before the recession.
While this data is dismal and is a reality check, it is more shocking when compared to the levels of income between economic classes.
Between 1979 and 2007, income grew by 275 percent for the top 1 percent of families in the U.S., according to the CBO. The rest of the country watched as the 1 percent’s income grew immensely while their own barely changed.
These changes are hidden in plain sight. Every day, we hear more dismal reports about the unemployment rate or the number of Americans on food stamps.
Half of all children in public school receive Free or Reduced Lunch. Everywhere we look, there is another student struggling to pay tuition, another mom counting coupons at the grocery store and another employee working extra hours for pathetic pay, a pittance compared to the concentration of wealth at the top.
According to the Economic Policy Institute (EPI), worker productivity has steadily grown over the past three decades, while worker compensation has barely waivered. On average, hourly pay has not grown at all since 2002 for workers with a college degree. The EPI also stated that CEO pay, which was 30 times the average laborer’s wage in 1979, has skyrocketed to 206 times the typical laborer in 2011.
All of this data raises one important question: why? In the U.S., where we boast of our moral sense of equality and personify our character as a dream to which anyone has access, how was this able to happen?
Of course, a myriad of factors are to blame. From globalization to immigration, from increased technological power to increasingly outsourced jobs, or from regressive tax policies pursued over the past few decades to an erosion of social programs that benefit the majority of Americans.
We remain unable to change what has happened, but we can pursue policies now that address the problem and stop our inequality from reaching heights that are out of our control.
We are the most unequal society in the developed world, as our gap between the extremely rich and everyone else continues to grow. The impact of this problem carries drastic implications.
The fact remains that money buys influence and power, and in today’s political climate, money practically wins elections. They have all the money. Indeed, welcome to the third world, America. I hope you get comfortable, because it will be a bumpy ride.