A presentation by Sam Pizzigati, the editor of the online weekly Too Much, delivered as part of the UN Decade of Sustainability Speaker Series, Michigan State University, in East Lansing, Michigan, January 27, 2010

1. Sustaining Inequality
How Much Is Too Much?
Sam Pizzigati
UN Decade of Sustainability Speaker Series
Michigan State University, January 27, 2010

2. A Great Recession fantasy
‗Congratulations!
‗You‘re hired.
‗You start the day
after graduation.
‗Your pay: $100,000 a year!‘
Wow! I’m
gonna be rich!

3. Rich? You certainly would be . . .
. . . richer than
the average American.
You‘d be making over
twice the U.S. average.
In 2009, that average:
$19.45 per hour . . .
. . . or $40,456 if you
worked full-time all year.

4. You would certainly be . . .
. . . richer than the average professional.
Computer programmer: $73,470
Environmental engineer: $77,970
Microbiologist: $70,150
Probation officer: $49,520
Math teacher: $68,130
Veterinarian: $89,450
Administrative law judge: $80,870

5. In fact, at $100k, you would . . .
. . . make more than 90 percent of U.S. taxpayers.
Distribution of taxpayers, 2010
98.1% 99.8%
100% 91.7%
80% 75.5%
63.2%
60%
49.5%
40%
20%
0%
Under Under Under Under Under Under $1
$40,000 $50,000 $75,000 $100,000 $200,000 million
Source: Congressional Joint Committee on Taxation, January 13, 2010

6. But you wouldn‘t be rich, not even close
At the top: 2010 incomes
$3,164,725
$100,000
Your fantasy income Average income, taxpayers over $1 million
Source: Congressional Joint Committee on Taxation, January 13, 2010

7. Is Andrew Liveris rich?
CEO,
Dow Chemical
Total pay,
last fiscal year:
$8.53 million
Source: Forbes

8. Compared to what?
Inside the Top 1%: 2007
$35,042,705
$4,024,583
$486,395 $1,021,643
99 - 99.5% 99.5 - 99.9% 99.9 - 99.99% Top 0.01%
Source: IRS, University of California economist Emmanuel Saez

9. At the tippy top: ‗The 400‘
Comparing one Top 400 income and
45,520 MSU students
$348
$263.3
Ever since the
late 19th century,
‗the 400‘ has
connoted the
ultimate in wealth.
Top 400 average income, State appropriation,
2006, in millions MSU, 2006, in millions

10. Should any of this bother us?
Taxpayer share,
49.7%
Income share,
Income share, 14.9%
12.7%
Taxpayer share,
0.6%
Under $40,000 Over $500,000
Source: Congressional Joint Committee on Taxation, January 2010

11. What‘s the big deal?
• You’re just envious.
Forget about the top.
• Focus on helping
the folks at the bottom.
• Talking about the rich just
distracts and divides us.

12. In the U.S. today, a common refrain.
. . . from the right, even from some on the left.
Dalton Conley, dean for the social
sciences at New York University
The American Prospect, Dec. 15, 2009
‗Don‘t Blame the Billionaires‘
‗Let's worry about making
sure the circuitry of the
American dream isn't
shorted, rather than whether
some folks draw more
current from the grid.‘

13. A perfectly acceptable liberal POV
Howard Dean, as a 2004
Presidential candidate
‗I think it‘s less productive to worry
about how much rich people have
than to worry about how much
middle-class and working people have.
The thing to do is concentrate on the
90 percent of people who don‘t have
what they need and make sure they
have it, and not worry about the
people who make $500,000 a year.
Of course, it‘s obscene, but so what?‘

14. ‗So what?‘
A century ago, no self-respecting progressive would
have ever uttered ‗so what?‘ about grand
concentrations of private wealth.

15. ‗So what?‘
Whatever their political stripe, progressives
a century ago believed that grand
accumulations of private wealth endangered
the democratic values they held dear.

16. A national leader
sets the tone
Theodore Roosevelt, President, 1901-09
‗The prime object should be to put
a constantly increasing burden on
the inheritance of those swollen
fortunes which it is certainly of no
benefit to this country to
perpetuate.‘
16

17. A great publisher
sounds the call
Joseph Pulitzer, Post-Dispatch, 1907
‗. . . always oppose privileged
classes . . . never be afraid to attack
wrong, whether by predatory
plutocracy or predatory poverty.‘
17

18. A voice thunders
from the Midwest
Gov. Robert LaFollette, Wisconsin, 1901
‗The supreme issue, involving all
of the others, is the encroachment
of the powerful few upon the
rights of the many.‘
18

19. A great reformer
sums it all up
Louis Brandeis, Supreme Court,1916-39
‗We can either have democracy in
this country or we can have great
wealth concentrated in the hands
of few. But we can't have both.‘
19

20. Brandeis was saying nothing new
Our Founding Fathers believed as he did:
Concentrated wealth endangers democracy.
‗The balance of power in a society
accompanies the balance of property in land.
The only possible way, then, of preserving the
balance of power on the side of equal liberty
and public virtue, is to make the acquisition of
land easy to every member of society; to
John Adams, 1776
make the division of the land into small
quantities, so that the multitude may be
possessed of landed estates.‘

21. The Founders knew their history
Plutarch, ancient
Greek historian
‗An imbalance between
rich and poor is the
oldest and most fatal
ailment of all republics.‘

22. What the Founders didn‘t know
. . . and what progressives like Louis
Brandeis didn‘t know either . . .
Extreme inequality – what we get
when wealth concentrates –
doesn‘t just endanger democracy.
Extreme inequality endangers
everything basic to social decency.

23. The more equal a society . . .
 The more democratic
 The more economically vibrant
 The more environmentally sound
 The more honest
 The more trustful
 The more compassionate
 The more healthy

24. People in unequal societies . . .
Enjoy less Have less
leisure time economic security Vote less
Have longer Work in more regularly
commutes stressful jobs Live shorter,
Pay more Worry more less healthy lives
for housing about crime Face more
Visit museums poverty
Suffer more
obesity less often Spend more time
Confront looking for parking
Contribute less
to charities more corruption

25. How do we know all this?
We‘ve seen an explosion of research on what happens
when societies grow more equal — and when they don‘t.
Economists
Epidemiologists
Psychologists
Sociologists Political scientists
Environmental scientists Demographers

26. Best exposition yet of this research
By British
epidemiologists
Richard Wilkinson
and Kate Pickett
‗ . . . what might be the most
important book of the year.‘
Guardian, London, March 12, 2009
Published in the United States:
December 22, 2009

27. What can epidemiologists teach us?
Epidemiologists study
the health of populations.
About 25 years ago, epidemiological research
began showing an amazing set of findings:
The greater the gap between a society‘s top
and bottom, the worse the society‘s health.
Inequality has more of an impact on health than
health care or individual health behaviors.

28. In equal societies, people live longer.
Not just poor people, but all people.
If you‘re middle income in relatively equal
society, you‘re going to live longer than a
middle-income person in an unequal society.

31. This same inequality dynamic
shows up almost everywhere.

45. ‗If you want to know why one
country does better or worse than
another, the first thing to look at is
the extent of inequality.‘
Richard Wilkinson and Kate Pickett,
The Spirit Level

47. The same dynamic holds true
for U.S. states.

50. In mature developed societies. . .
. . . how much wealth a society generates matters
little for our well-being.
What matters much more: How a society
distributes that wealth.

51. What makes inequality so debilitating?
Sociological Biological
dynamic dynamic

52. The sociological dynamic
. . . the more . . . the less
The more vibrant
inequality . . . tattered our
safety net . . . our public
spaces

53. Why do safety nets always
fray amid inequality?
U.S. safety net programs only reduce poverty by 28
percent. In more equal nations, safety nets reduce
poverty by over 70 percent.
In equal societies, few of us have enough personal
wealth to be totally secure, no matter what. We
worry about what could happen to our loved ones
should we lose a job. Or get sick.
We join with others to push for safety net programs
that insure us help when we need it. In an equal
society, we enthusiastically support a strong safety
net because, simply put, someday we may need it.

54. Safety nets amid inequality
In more unequal societies, significant numbers of
people — wealthy people — don‘t have to worry
about their basic economic security.
These affluent have enough wealth to weather
any storm. They require no public safety net.
Feeling totally self-sufficient, the rich wonder
why everyone else can‘t be self-sufficient, too.
In an unequal society, the rich feel no vested self-
interest in maintaining a strong and stable safety net.
The more people without this vested self-interest,
the less the support for safety net programs.

55. Why does the public commons
crumble amid inequality?
Our community institutions – our schools, our parks,
our libraries – make up our ‗commons.‘
In an equal society, most everyone depends
on this public commons.
But where wealth concentrates, not everyone needs
the commons. The wealthy don‘t send their kids to
public schools. Or go to public libraries. Or take
public transportation or visit public parks.
The wealthy live in private worlds. The more
unequal a society, the bigger these worlds. The
bigger the private worlds, the more the rich grumble
about paying taxes for services they never use.

56. The commons in crisis
The wealthy don‘t just grumble about taxes for services
they don't use. They lead campaigns to cut these taxes.
In an unequal society, with significant numbers of really
rich people, these campaigns start to succeed.
The more tax cuts, the more public services
deteriorate. Soon the modestly affluent feel better off
going life alone, on their own nickel — better off in a
private country club, with their kids in private school, in
a private gated development.
With fewer people who care about public services,
more cutbacks become inevitable. Services deteriorate
even further. Our public space no longer provides a
place where we all come together. We go our separate
ways. Our sense of community collapses.

57. The biology of inequality
The cortisol molecule

58. Feeling threatened?

59. The short take
The hormone cortisol floods our bodies
when we feel threatened, helpless, or stressed.
We get a quick energy burst :
That‘s really great for fight or flight.
But that‘s horrible if repeated over and over.
Chronic stress wears down our immune system.
Unequal societies generate chronic stress. People
don‘t trust each other, don‘t support each other.

60. So what can we do
about all this?

61. Some say we can do nothing
Rich always getting richer, poor always getting poorer.
That‘s the way of the world.
Why waste time tilting against windmills?
All Americans want to be rich.
That‘s a character trait hard-wired into us.
If we try to change America‘s distribution of
income and wealth, we‘re doomed to frustration.

62. Inequality can‘t possibly
be ‗hard-wired‘ into us.
We have changed enormously over time.

63. Our 20th century equality story
Average income of top 0.01 percent of U.S. families as a multiple
of average income of bottom 90 percent of U.S. families
1000
900
800
700
600
500
400
300
200
100
0

64. 800
1000
600
200
400
0
1917
1919
1921
1923
1925
1927
1929
1931
1933
1935
1937
1939
1941
1943
1945
1947
1949
1951
1953
1955
1957
1959
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
of average income of bottom 90 percent of U.S. families
1981
1983
Average income of top 0.01 percent of U.S. families as a multiple
1985
1987
1989
1991
1993
1995
1997
1999
2001
The last 30 years: A grand reversal
2003
2005

65. Remember our look at top 400?
$263.3
Average annual incomes,
400 highest-earning
Americans
(inflation adjusted to 2006)
$13.7
1961 2006

66. Back to the future
Gap between the average income of the top 0.01%
and the average income of the bottom 90
976 times
892 times
179 times 176 times
1928 1955 1980 2006
66

67. The distribution of income
and wealth can change.
We changed it.

68. We need to change
that distribution again.
We have a new reason.

70. If Louis Brandeis
were with us
here today . . .
“We can either have
inequality or we can
have a sustainable Earth.
But we can't have both.‖
70

71. Why should equality matter
to people who care
about our Earth?

72. Reason #1 why inequality matters to sustainability
Greater equality reduces
the cultural pressure to consume.
In a more equal society, where most
people can afford the same things,
things don‘t matter so much.
But where most people can‘t afford
the same things, things become a
powerful marker of social status.
In a society growing more unequal, you
either accumulate more and bigger
things or find yourself labeled a failure.

73. The inequality mantra: More, bigger
The growing size of the median American home
2,500
1,500
Square feet: 1970 Square feet: 2006
Number of people Number of people
in typical household: in typical household:
3.14 2.57

74. Reason #2 why inequality matters to sustainability
The super rich stomp out
a huge carbon footprint.
The private jet: the badge of ultra high net worth status

75. Flying Hummers on steroids
Lbs. CO2 per passenger Number of private jets
8,892 in active service
10,000
1,546
1,000
Commercial jet Private jet 1970 2006

76. Reason #3 why inequality matters to sustainability
Sustainability demands public spiritedness.

78. Given the reality of massive inequality,
is our ecological goose cooked?

79. The good news
Richard Wilkinson
and Kate Pickett
―It is fortunate that just when the human
species discovers that the environment
cannot absorb further increases in
emissions, we also learn that further
economic growth in the developed world
no longer improves health, happiness, or
measures of well-being.‖
79

80. We don‘t need to make more
to improve our standard of living.
We need to share more.

81. How can we best share?
We already have a minimum wage.
How about a maximum?
An absolutely off-the-wall notion?
Not to President Franklin Roosevelt.

83. Maximum wage idea predates FDR
Felix Adler, founder of
Ethical Culture Society,
first proposes a 100 percent
top tax rate in 1880.
During World War I,
New York attorney
Amos Pinchot,
brother of
Pennsylvania
Governor Gifford
Pinchot, calls for
a 100 percent top
In 1917, publisher E. W. Scripps
tax rate on income
calls for a 100 percent tax on all
over $100,000.
income over $50,000.

84. What might a maximum wage
approach look like for 21st century?
Not a set cap.
A set ratio between
top and bottom.

85. Ratios at the
bargaining table
Unions could make a 40-to-1 ratio
between executives and workers central
to their negotiating strategies.
Manning Marable, Columbia University
―Suppose trade unions fought for and won
contracts that linked the salaries and overall
compensation of top executives to the wage levels
of the fullest, full-time employees. An executive
who wanted a financial package of salary, stock
options, interest and other compensation of $2
million, for example, could only obtain that figure if
the corporation‘s lowest paid, full-time employee
earned at least $50,000 annually.‖

86. Ratios in
the tax law
Under current law, the more
corporations overpay executives, the
more they can deduct off their taxes.
Rep. Barbara Lee (D-Calif.)
The pending Income Equity Act (HR 1594),
introduced by Rep. Lee, would deny all
corporations tax deductions on any executive
pay that runs over $500,000 or 25 times the
pay of a company‘s lowest-wage worker.

87. The first
legislated ratio
The Bankruptcy Act of 2005, as
amended by Senator Edward Kennedy,
features the first-ever federal ratio
limit on executive pay.
No company in bankruptcy can lavish on its
executives any ‗retention‘ bonus or severance
pay that runs over 10 times the average bonus
or severance awarded to regular employees in
the previous year.

88. A bolder
ratio approach
From Executive Excess 2009, the
latest annual report on CEO
pay from the Institute for Policy
Studies: Link a ratio limit to the
expenditure of our tax dollars.
Deny all government contracts to
companies that pay their top
executives over 25 times what their
lowest-paid workers receive.

89. Leveraging the public purse
Every major business These many billions Our equality choice
owes its success, in no in contracts and • We as a society have
small measure, to giveaways do come decided that we will not
taxpayer dollars. with strings. subsidize, with our tax
dollars, companies that
• Government has • Our public bodies do
increase racial and
become America‘s not award contracts to
gender inequality.
largest consumer of companies that
business products and discriminate by race or • Why should we
services. gender. subsidize companies
that increase economic
• Federal procurement • If you discriminate in
inequality?
officials alone let to your employment
private businesses over practices, you do not get
$350 billion a year in to do business with
contracts. Uncle Sam.
• Billions more flow to
businesses as subsidies
and tax breaks.

90. Think of the dynamic
these ratios could create.
If we tied the top to the bottom,
the top could only advance
if the bottom advanced first.
Our richest and most powerful
would have a vested personal interest
in helping our poorest and weakest.

91. A quarter-century from now, what sort
of America do we want to see?
The top 1% share of national income
27%
in the United States, 1913 - 203
23.94% 21.83%
8%
0000000000000
000000000000
91

92. Become informed
For background For staying in touch
An email newsletter available at . . .
www.toomuchonline.org
An intro to
understanding
and overcoming
the inequality
that limits our
lives. Available
to read online . . .
www.greedandgood.org