The document summarizes findings from a book on growing U.S. income inequality. It discusses how absolute income inequality is increasing, the middle class is shrinking, and poverty has been increasing. The rich are getting substantially richer, while incomes for most Americans have stagnated or declined. CEO pay has grown massively compared to typical workers. Overall, income inequality in the U.S. has risen dramatically in recent decades.
Narrated public lecture of growing u.s. income inequality
1. Growing U.S. Income Inequality
A Lecture Presented for the Osher
Program
San Diego State University
April 18, 2011
Denny Braun, Ph.D.
1
Professor Emeritus of Sociology
Minnesota State University
3. Major Findings in my Book:
• Absolute income inequality is increasing
(the rich are “getting richer”!)
4. Major Findings in my Book:
• Absolute income inequality is increasing
(the rich are “getting richer”!)
• The middle class is shrinking
5. Major Findings in my Book:
• Absolute income inequality is increasing
(the rich are “getting richer”!)
• The middle class is shrinking
• Poverty has been increasing
6. Major Findings in my Book:
• Absolute income inequality is increasing
(the rich are “getting richer”!)
• The middle class is shrinking
• Poverty has been increasing
• U.S. Multinational Corporations cause mo
inequality both in the U.S. and in the Wor
7. Major Findings in my Book:
• Absolute income inequality is increasing
(the rich are “getting richer”!)
• The middle class is shrinking
• Poverty has been increasing
• U.S. Multinational Corporations cause mo
inequality both in the U.S. and in the Wor
• Huge inequalities exist between U.S. loca
8. Major Findings in my Book:
• Absolute income inequality is increasing
(the rich are “getting richer”!)
• The middle class is shrinking
• Poverty has been increasing
• U.S. Multinational Corporations cause mo
inequality both in the U.S. and in the Wor
• Huge inequalities exist between U.S. loca
• The growth of relative income inequality
not only continuous but has become explo
9. A basic truth about absolute income
differences
is that the U.S. is NOT the richest country!
GDP/ GDP/
Rank Nation capita Rank Nation capita
2009 PPP
1 Luxemb. 104,512 1 Qatar 83,841
2 Norway 79,085 2 Luxemb. 78,395
3 Qatar 68,872 3 Norway 52,561
4 Switz. 67,560 4 Singapore 50,523
5 Denmark 56,115 5 Brunei 49,110
6 Ireland 51,356 6 U.S.A. 46,381
Source: 7 Nether. 48,223 7 Switz. 43,007
Inter-
national
8 U.A.E. 46,857 8 Nether. 39,938
Monetary 9 U.S.A. 46,381 9 Ireland 39,468
Fund
9
10 Austria 45,989 10 Australia 38,911
11. The Best and Worst States on Median Household
Highest Median Income
Lowest Median
Income Household Income Household
States Income 2009 States Income 2009
Maryland $69, 272 Mississippi $36,646
New Jersey $68,342 West Virginia $37,435
Connecticut $67,034 Arkansas $37,823
Alaska $66,953 Kentucky $40,072
Hawaii $64,098 Alabama $40,489
Massachusett $64,081 Oklahoma $41,664
s
11 Source: U.S. Census Bureau, American Community
Surveys, 2008 and 2009
14. Percent Change in Median Household
Income
Within Last Two Decades (2009 Dollars)
-11
African 28
-8 2000-2009
Latinos 19 1991-2000
-5
White 13
-15 -10 -5 0 5 10 15 20 25 30
14 Source: Calculated from Census Data, Report P60-238
15. Who are the poor?
• What are their characteristics?
• Where do they live?
• Have their numbers increased over
time?
• How about the rate of poverty? Is
that unchanged?
16. Percent in Poverty, 2009
30
25.8 25.3
25
20
15
12.5
10 9.4
5
0
White Black Hispanic Asian
16
Source: U.S. Census, Income, Poverty, and Health Insurance Coverage
17. Percent in Poverty, 2009
65 & Over 8.9
18 - 64 Years 12.9
Children (< 18) 20.7
0 5 10 15 20 2
Source: U.S. Census, Income, Poverty, and Health Insurance Coverage
18. Percent in Poverty, 2009
32.5
35
30 22
25
20 14.3
15
5.8
10
5
0
All Persons Single (Non- Married Female
Family) Couple Headed with
Family Children
Source: U.S. Census, Income, Poverty, and Health Insurance Coverage
(Sep., 2010)
20. Facts About U.S. Poverty
•How “poor” is poor? It depends on your
family size and your age. In 2009, if you
were a single mom with 2 kids under
18, you were “poor” if your annual
income was $17,285 or less. For a single
person over 65 years old, the cut off was
$ 10,289.
21. Facts About U.S. Poverty
•How “poor” is poor? It depends on your
family size and your age. In 2009, if you
were a single mom with 2 kids under
18, you were “poor” if your annual
income was $17,285 or less. For a single
person over 65 years old, the cut off was
$ 10,289.
• Within the past decade, the poverty rate
has increased 27% for all persons, and
30% for all families.
22. Facts About U.S. Poverty
• How “poor” is poor? It depends on your
family size and your age. In 2009, if you
were a single mom with 2 kids under
18, you were “poor” if your annual
income was $17,285 or less. For a single
person over 65 years old, the cut off was
$ 10,289.
• Within the past decade, the poverty rate
has increased 27% for all persons, and
30% for all families.
• Thus, the poor grew by 12 million in the past
decade, totally obliterating the 4 million
23. Facts About U.S. Poverty
(Cont.)
•The number of Americans who are poor
today, over 43 million, is at an all time
high and surpasses the population of
most nations. One of every 7 persons in
our country is poor!
24. Facts About U.S. Poverty
(Cont.)
• The number of Americans who are poor
today, over 43 million, is at an all time
high and surpasses the population of
most nations. One of every 7 persons in
our country is poor!
• Many, many Americans have such low
incomes that they are on the brink of
poverty at all times. In the four year
period (2004-2007), just before the onset
of The Great Recession, nearly one in
three Americans fell into poverty for 2 or
25. Facts About U.S. Poverty
(Cont.)
• Lastly, one of 11 elderly (65 and over)
and 1 of 5 children are living under
poverty today.
26. Facts About U.S. Poverty
(Cont.)
• Lastly, one of 11 elderly (65 and over)
and 1 of 5 children are living under
poverty today.
• These two innocent, vulnerable groups
comprise 44% of poor
people, approaching the 20 million mark.
27. Facts About U.S. Poverty
(Cont.)
• Lastly, one of 11 elderly (65 and over)
and 1 of 5 children are living under
poverty today.
• These two innocent, vulnerable groups
comprise 44% of poor
people, approaching the 20 million mark.
• Unfortunately, the United States does
not do a very good job protecting our
poor through social services and other
governmental programs.
28. Facts About U.S. Poverty
(Cont.)
• The U.S. has an initial poverty rate
lower than many of our industrial peers
(26.3%, compared to Sweden’s
26.7%, Germany’s 33.6%, U.K.’s
26.3%, Japan’s 26.9%).
29. Facts About U.S. Poverty
(Cont.)
• The U.S. has an initial poverty rate
lower than many of our industrial peers
(26.3%, compared to Sweden’s
26.7%, Germany’s 33.6%, U.K.’s
26.3%, Japan’s 26.9%).
• After taxes and transfers, however, our
poverty rate only declines to 17.1%. Of
the 20 advanced countries, we are last in
reduction.
30. Facts About U.S. Poverty
(Cont.)
• The U.S. has an initial poverty rate
lower than many of our industrial peers
(26.3%, compared to Sweden’s
26.7%, Germany’s 33.6%, U.K.’s
26.3%, Japan’s 26.9%).
• After taxes and transfers, however, our
poverty rate only declines to 17.1%. Of
the 20 advanced countries, we are last in
reduction.
• For example, Sweden goes down to
5.3%, Germany to 11%, U.K. to 8.3%, and
Japan to 14.9%. (Source: Org. for
32. The Best and the Worst in 2009 on Poverty
Rates
Poorest Percent in Least Poor Percent
States, 2009 Poverty States, 2009 in
Poverty
Mississippi 21.9 New Hampshire 8.5
Arkansas 18.8 Alaska 9.0
Kentucky 18.6 Maryland 9.1
D.C. 18.4 New Jersey 9.4
New Mexico 18.0 Connecticut 9.4
West Virginia 17.7 Wyoming 9.8
Source: U.S. Census Bureau, American Community Survey, 2009
34. Poverty translates into
Hunger
• About 15% of U.S. Households experienced “food
insecurity” in 2009—which translates to over 17
million American families.
Source: USDA, Economic Research Report No. (ERR-108), Nov. 2010
35. Poverty translates into
Hunger
• About 15% of U.S. Households experienced “food
insecurity” in 2009—which translates to over 17
million American families.
• These households were stalked by hunger and at
times did not have enough money to buy enough
food at various times during the year.
Source: USDA, Economic Research Report No. (ERR-108), Nov. 2010
36. Poverty translates into
Hunger
• About 15% of U.S. Households experienced “food
insecurity” in 2009—which translates to over 17 million
American families.
• These households were stalked by hunger and at times
did not have enough money to buy enough food at
various times during the year.
• Nearly 7 million households (with one million children)
had such severe financial problems that they were forced
to miss meals on a regular basis.
Source: USDA, Economic Research Report No. (ERR-108), Nov. 2010
37. Poverty translates into Hunger
(Cont.)
• The number of households with
hunger is at an all-time high since data
began to be gathered in 1995.
Source: USDA, Economic Research Report No. (ERR-108), Nov.
2010
38. Poverty translates into Hunger
(Cont.)
•The number of households with
hunger is at an all-time high since data
began to be gathered in 1995.
•The number of households
experiencing hunger has tripled in the
3 years between 2006 and 2009.
Source: USDA, Economic Research Report No. (ERR-108), Nov.
2010
40. How is the American Middle Class
Doing?
In one word—”Badly”!
41. How is the American Middle Class
Doing?
In one word—”Badly”!
Since peaking in 1999 (at
$38,720), median earnings for male
workers is 6% lower eleven years
later ($36,331 in 2009).
42. How is the American Middle Class
Doing?
In one word—”Badly”!
Since peaking in 1999 (at
$38,720), median earnings for male
workers is 6% lower eleven years
later ($36,331 in 2009)
Female workers have done slightly
better, going from $23,738 to $26,030
in the same period—a 9.7% increase.
43. How is the American Middle Class
Doing?
In one word—”Badly”!
Since peaking in 1999 (at
$38,720), median earnings for male
workers is 6% lower eleven years
later ($36,331 in 2009)
Female workers have done slightly
better, going from $23,738 to $26,030
in the same period—a 9.7% increase
Thus, in a two-earner, husband/wife
family, earnings have been stagnant
for 10 years.
44. How is the American Middle Class
Doing?
In one word—”Badly”!
Even more threatening is anemic job
growth. Only 7 million new jobs were
created in 2002-2007 (before the crash)—
compared to 20 million created in the same
5-year period in the 1990s.
45. How is the American Middle Class
Doing?
In one word—”Badly”!
Even more threatening is anemic job
growth. Only 7 million new jobs were
created in 2002-2007 (before the crash)—
compared to 20 million created in the same
5-year period in the 1990s.
The Bottom Line: Fewer Americans are
employed today than a decade ago, despite
our population growing by 25 million.
48. How have the very rich been
doing?
In 2007, just before the Great
Recession hit us, the top 25 CEOs of
investment houses “earned” $22
billion (about the GDP of Costa Rica).
The top 5 managers each got over $1
billion. (Page and Jacobs)
49. How have the very rich been
doing?
In 2007, just before the Great
Recession hit us, the top 25 CEOs of
investment houses “earned” $22
billion (about the GDP of Costa Rica).
The top 5 managers each got over $1
billion! (Page and Jacobs)
In 2007, America’s top 1% of earners
received 23% of the nation’s total
income (almost triple the 8% share
they got in 1980). (Robert Reich)
50. How have the very rich been
doing?
In the 1960s, CEOs of major American
companies earned 25 times the wages of
their typical workers; by 1980 40 times; by
1990 100 times; by 2007 350 times. (Robert
Reich). As of 2009, Michael Hiltzik (LA
TIMES) reported a Harvard study putting
this ratio at 411 to 1.
51. How have the very rich been
doing?
In the 1960s, CEOs of major American
companies earned 25 times the wages of
their typical workers; by 1980 40 times; by
1990 100 times; by 2007 350 times.
(Robert Reich). As of 2009, Michael Hiltzik
(LA TIMES) reported a Harvard study
putting this ratio at 411 to 1.
The combined wealth in 2005 of Sam
Walton’s family at $90 billion (Walmart
), Bill Gates (Microsoft) at $46 billion, and
Warren Buffet at $44 billion is much more
than the $95 billion combined wealth of
the bottom 40% in the U.S. In short, 3
families own as much as 120 million
52. Average Pay of Top 500 Corporate CEOs, 1989 -
2009
52
Source: Forbes.com. Pay is in constant 2008 dollars
53. Most Americans are Woefully Ignorant
about How Exorbitant CEO Corporate
Pay Actually Is
• When asked how much they believe
typical corporate CEOs “earn” in a year,
Americans estimate their pay at $500,000
(20 times that of unskilled workers or sales
clerks).
54. Most Americans are Woefully Ignorant
about How Exorbitant CEO Corporate
Pay Actually Is
•When asked how much they believe typical
corporate CEOs “earn” in a year, Americans
estimate their pay at $500,000 (20 times that
of unskilled workers or sales clerks).
• In reality, the CEOs of the largest Standard
and Poors 500 corporations make $14
million per year. (See Jacobs and
Page, CLASS WAR).
55. Most Americans are Woefully Ignorant
about How Exorbitant CEO Corporate
Pay Actually Is
• When asked how much they believe typical
corporate CEOs “earn” in a year, Americans
estimate their pay at $500,000 (20 times that of
unskilled workers or sales clerks).
• In reality, the CEOs of the largest Standard
and Poors 500 corporations make $14 million
per year. (See Jacobs and Page, CLASS WAR).
• This is 700 times more than the average
factory worker and 540 times the salary of the
average sales clerk!
56. Most Americans are Woefully Ignorant about
How Exorbitant CEO Corporate Pay Actually
Is (Cont.)
•Hacker and Pierson (WINNER TAKE ALL
POLITICS) assert that these CEOs form the
bulk of the top 0.1% of income recipients.
57. Most Americans are Woefully Ignorant about
How Exorbitant CEO Corporate Pay Actually
Is (Cont.)
•Hacker and Pierson (WINNER TAKE ALL
POLITICS) assert that these CEOs form the
bulk of the top 0.1% of income recipients.
• This top 0.1% increased their share of all
income from 2.7% in 1974 to 12.3% in 2007.
58. Most Americans are Woefully Ignorant
about How Exorbitant CEO Corporate
Pay Actually Is
•Hacker and Pierson (WINNER TAKE ALL
POLITICS) assert that these CEOs and their
lieutenants form the bulk of the top 0.1% of
income recipients.
• This top 0.1% increased their share of all
income from 2.7% in 1974 to 12.3% in 2007.
• When the capital gains of this richest 1-in-
1000 is counted, this equals $1 trillion per
61. The 7 Highest Paid CEO Layoff
Company LeadersTotal
CEO in 2009 Layoffs
2009 Pay (11/08-4/10)
Schering- Fred Hassan $49,653,063 16,000
Plough
Johnson & William Weldon $25,569,844 8,900
Johnson
Hewlett Mark Hurd $24,201,448 6,400
Packard
Walt Disney Robert Iger $21,578,471 3,400
IBM Samuel Palmisano $21,159,289 7,800
AT&T Randall $20,244,312 12,300
Stephenson
Wal-Mart Michael Duke $19,234,269 13,350
61
Source: Institute for Policy Studies
64. What About “Relative”
Income Inequality?
• It was PresidentJohn Kennedy who termed the
phrase—”A Rising Tide Lifts All Boats”—meaning
the poor also benefit from economic growth.
65. What About “Relative”
Income Inequality?
• It was President John Kennedy who termed the
phrase—”A Rising Tide Lifts All Boats”—meaning
the poor also benefit from economic growth.
• It is true that our Real GDP doubled between 1983-
2007 while our population increased only by one-
third, i.e., per capita real GDP actually did grow over
this past quarter century.
66. What About “Relative”
Income Inequality?
• It was John Kennedy who termed the phrase—”A
Rising Tide Lifts All Boats”—meaning the poor also
benefit from economic growth.
• It is true that our Real GDP doubled between 1983-
2007 while our population increased only by one-
third, i.e., per capita real GDP actually did grow over
this past quarter century.
• On average, then, Americans should be better
off—but this is definitely not the case.
67. What About “Relative”
Income Inequality?
• It was John Kennedy who termed the phrase—”A
Rising Tide Lifts All Boats”—meaning the poor also
benefit from economic growth.
• It is true that our Real GDP doubled between 1983-2007
while our population increased only by one-
third, i.e., per capita real GDP actually did grow over this
past quarter century.
• On average, then, Americans should be better off—but
this is definitely not the case.
• To get a better idea of who benefits vs. those who do
not, researchers often divide income recipients into
fifths (called Quintiles, or 20% segments).
68. What About “Relative”
Income Inequality?
• It was John Kennedy who termed the phrase—”A Rising
Tide Lifts All Boats”—meaning the poor also benefit from
economic growth.
• It is true that our Real GDP doubled between 1983-2007
while our population increased only by one-third, i.e., per
capita real GDP actually did grow over this past quarter
century.
• On average, then, Americans should be better off—but
this is definitely not the case.
• To get a better idea of who benefits vs. those who do
not, income recipients are often divided into fifths
(Quintiles, or 20% segments).
69. Percent of all Household Income Received
by each Quintile (5th): 2009
Lowest
5th, 3.4%
Second
5th, 8.6%
Middle
5th, 14.6%
Highest
5th, 50.3%
Fourth
5th, 23.2%
Source: U.S. Census
Bureau, Current Population
Reports, P60-238, Income,
Note: Top 5% received 21.7% Poverty, and Health
69 of ALL household income in Insurance Coverage in the
the U.S. United States: 2009
72. Some Dramatic Shifts
•Between 1945 and 1980, incomes
increased on average by $19,000. While
the richest 10% of our population captured
over 1/3 of this growth in real dollars, the
bottom 90% still received the other 2/3rds
of the income increase.
73. Some Dramatic Shifts
• Between 1945 and 1980, incomes increased on
average by $19,000. The richest 10% of our
population captured over 1/3 of this growth in real
dollars, but the bottom 90% still received the other
2/3rds of the increase.
• Real income rose another $12,000 in the 27 years
between 1981 and 2008. BUT—the richest 10% got
almost all of this increase of income (96%), while
the bottom 90% received only 4% of the growth. In
73
short, the very great majority of Americans have
74. Mean Household Income of Top 5%
Divided by Mean Household Income
of Bottom 40% in 2009 Dollars
27.0
Multiplication Factor
25.0
23.0
21.0
19.0
17.0
15.0
1965 1975 1985 1995 2005
Year
74
Source: Calculated from Census Data in 2010 Income and Poverty
76. 0.5
Household Gini Ratio by Year: 1968-
0.49
0.48
0.47
0.46
0.45
Gini 0.44
Ratio 0.43
0.42
0.41
0.4
0.39
0.38
0.37
0.36
0.35
76 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007
Source: Calculated from Census Data, Income, Poverty, and Health Insurance Coverage in the United
States: 2009, P60-238 .
77.
78. Family Income Gini Score by
Country: 2009
78
Source: CIA- The World Factbook 2009
79. Most Equal Country Gini Most Unequal Gini
Sweden .230 Country
Namibia .707
Norway .250 South Africa .650
Luxembourg .260 Lesotho .632
Czech Republic .260 Botswana .630
Slovakia .260 Sierra Leone .629
Serbia .260 Central Africa Republic .613
Malta .260 Bolivia .592
Austria .260 Haiti .592
Albania .267 Columbia .585
Germany .270 Brazil .567
Belarus .279 Bosnia & Herzegovina .562
Iceland .280 Panama .561
Hungary .280 Guatemala .551
Belgium .280 Chile .549
Slovenia .284 Honduras .538
79
Source: CIA, The World Factbook 2009
80. inequality?
Research shows that high relative income inequality is
associated with:
80
81. inequality?
Research shows that high relative income inequality is associated
with:
High homicide Rates (nations and U.S. states)
82. inequality?
Research shows that high relative income inequality is associated
with:
High homicide Rates (nations and U.S. states)
High rates of imprisonment (nations and U.S.
States)
83. inequality?
Research shows that high relative income inequality is associated
with:
High homicide Rates (nations and U.S. states)
High rates of imprisonment (nations and U.S.
States)
High Teen Birthrates (nations and states)
84. inequality?
Research shows that high relative income inequality is associated
with:
High homicide Rates (nations and U.S. states)
High rates of imprisonment (nations and U.S.
States)
High Teen Birthrates (nations and states)
High rates of illegal drug use (nations)
85. inequality?
Research shows that high relative income inequality is
associated with:
High homicide Rates (nations and U.S. states)
High rates of imprisonment (nations and U.S.
States)
High Teen Birthrates (nations and states)
High rates of illegal drug use (nations)
High infant mortality rates (nations)
86. inequality?
Research shows that high relative income inequality is
associated with:
High homicide Rates (nations and U.S. states)
High rates of imprisonment (nations and U.S.
States)
High Teen Birthrates (nations and states)
High rates of illegal drug use (nations)
High infant mortality rates (nations)
Lower life expectancy (nations)
87. inequality?
Research shows that high relative income inequality is
associated with:
High homicide Rates (nations and U.S. states)
High rates of imprisonment (nations and U.S.
States)
High Teen Birthrates (nations and states)
High rates of illegal drug use (nations)
High infant mortality rates (nations)
Lower life expectancy (nations)
High rates of Mental Illness (nations)
88. inequality?
Research shows that high relative income inequality is associated
with:
High homicide Rates (nations and U.S. states)
High rates of imprisonment (nations and U.S.
States)
High Teen Birthrates (nations and states)
High rates of illegal drug use (nations)
High infant mortality rates (nations)
Lower life expectancy (nations)
High rates of Mental Illness (nations)
Low rates of contraceptive usage (nations)
89. inequality?
Research shows that high relative income inequality is associated
with:
High homicide Rates (nations and U.S. states)
High rates of imprisonment (nations and U.S.
States)
High Teen Birthrates (nations and states)
High rates of illegal drug use (nations)
High infant mortality rates (nations)
Lower life expectancy (nations)
High rates of Mental Illness (nations)
Low rates of contraceptive usage (nations)
Lower access to safe water (nations)
90. For detailed charts and graphs
exploring these findings, see:
Richard Wilkinson and Kate
Pickett, THE SPIRIT LEVEL: WHY
GREATER EQUALITY MAKES
SOCIETIES STRONGER, 2009.
See especially their
free, downloadable Power Point
presentation at
94. Percent Who Say Others Cannot be
Trusted
65
by Household Income Inequality and Year
63
2006
1996
1994
% Cannot Be Trusted
61 1993
59 1983 1986
2000 2004
1990 1998 2002
57 1975
1988 1991
1978 1989
55
53 1976 1987
1980
51 1973
1972
49 1984
47
45
0.39 0.4 0.41 0.42 0.43 0.44 0.45 0.46 0.47 0.48
Household Gini Ratio
94 Source: General Social Survey (GSS) Data
95. Percent of Those Eligible who Voted in
75.0
2008 by State Household Income Gini
Score
MN
70.0 NH ME
WI LA
IA MS
SD ND
% Eligible who Voted
65.0 NE MT MI
OH MO VA NC
WY VT WA RI SC
AK MD OR CO
PA KY MA AL PA
60.0 KS GA
IN
ID
NM
OK NJIL FL
55.0
AZ TN
NV WV
AR NY
CA
50.0 UT
TX
HI
45.0
0.41 0.43 0.45 0.47 0.49
Household Gini Ratio 2007
95
Source: U.S. Census Bureau, Current Population Reports
97. Obesity Rates By Inequality in U.S.
35
States
33 MS
WV AL
31 TN
SC OK
KY
29 OR
Percent Obese 2008
MO AR NC LA
SD MI
PA TX
27 NE DE ND KS GA
AK IN IL
IA MD
WI WA
25 ME NV VA NM
WY FL NY
NH ID MN OR AZ
MT CA
23 UT VT NJ
HI
RI
21 MA CT
19 CO
17
15
0.41 0.42 0.43 0.44 0.45 0.46 0.47 0.48 0.49 0.5
97 Household Gini Ratio 2007
Source: Center for Disease
98. 2010 Unemployment Rate
in States by Gini Ratio
14 NV
MI
CA
12 RI
% Unemployed 2010
FL MS
OH OR SC AL
IL
10 IN NC GA TN
AZ NJ
MO PA MA
ID WA CT
DE WV TX
8 AK ME CO NM
WI NY
UT MT AR
WY IA MN VA OK LA
HI KS
6 NH
VT
NE
SD
4
ND
2
0.41 0.42 0.43 0.44 0.45 0.46 0.47 0.48 0.49 0.5
Source: Bureau of Household Income Gini Ratio 2007
Labor Statistics
101. What is to be Done?
Policies at the National Level
• Allow the Bush-era tax cuts for the very rich to
expire.
• Since 1995, the richest 400 households have had
their taxes cut 45%, or $46 million per household per
year.
• Even for those earning $1 million per year, their tax
cut equals $128,000 annually.
• For those with middle class incomes, our yearly
tax cut savings comes to $300.
101
• If these “temporary” tax cuts are discontinued, $1
102. What is to be Done?
Policies at the National Level
Allow the Bush-era tax cuts for the very rich to
expire.
Cut defense spending/stop fighting needless wars
(Stiglitz estimates the Iraq War has cost $3 trillion)
103. What is to be Done?
Policies at the National Level
Allow the Bush-era tax cuts for the very rich to
expire.
Cut defense spending/stop fighting needless wars
(Stiglitz estimates the Iraq War has cost $3 trillion)
Invest in R & D (cutting-edge Green Technology)
104. What is to be Done?
Policies at the National Level
Allow the Bush-era tax cuts for the very rich to
expire.
Cut defense spending/stop fighting needless wars
(Stiglitz estimates the Iraq War has cost $3 trillion)
Invest in R & D (cutting-edge Green Technology)
Re-industrialize our country, especially hi-tech
areas!
105. What is to be Done?
Policies at the National Level
Allow the Bush-era tax cuts for the very rich to
expire.
Cut defense spending/stop fighting needless wars
(Stiglitz estimates the Iraq War has cost $3 trillion)
Invest in R & D (cutting-edge Green Technology)
Re-industrialize our country, especially hi-tech
areas!
Continue to fully fund our public university
system—the envy of the world and the font of our
national productivity.
106. What is to be Done?
Policies at the National Level
Allow the Bush-era tax cuts for the very rich to
expire.
Cut defense spending/stop fighting needless wars
(Stiglitz estimates the Iraq War has cost $3 trillion)
Invest in R & D (cutting-edge Green Technology)
Re-industrialize our country, especially hi-tech
areas!
Continue to fully fund our public university
system—the envy of the world and the font of our
national productivity.
107. What is to be Done?
Policies at the National Level
Allow the Bush-era tax cuts for the very rich to
expire.
Cut defense spending/stop fighting needless wars
(Stiglitz estimates the Iraq War has cost $3 trillion)
Invest in R & D (cutting-edge Green Technology)
Re-industrialize our country, especially hi-tech
areas!
Continue to fully fund our public university
system—the envy of the world and the font of our
national productivity.
Reduce our national debt.
108. What is to be Done?
Personal Actions You Can Take
109. What is to be Done?
Personal Actions You Can Take
• “Thing Globally—Act Locally”. Join local action
groups that address social ills
(hunger, homelessness, political advocacy, etc.)
110. What is to be Done?
Personal Actions You Can Take
• “Thing Globally—Act Locally”. Join local action
groups that address social ills
(hunger, homelessness, political advocacy, etc.)
• Consume less, and when you do—buy
carefully, e.g., coops. (Sounds Un-American—
right?) Read Annie Leonard, THE STORY OF
STUFF.
111. What is to be Done?
Personal Actions You Can Take
• “Thing Globally—Act Locally”. Join local action
groups that address social ills
(hunger, homelessness, political advocacy, etc.)
• Consume less, and when you do—buy
carefully, e.g., coops. (Sounds Un-American—
right?) Read Annie Leonard, THE STORY OF
STUFF.
• Read widely (NEVER STOP LEARNING), use
unbiased news sources/avoid hate-mongering
broadcast media pundits, e.g., beware of the FOX in
the hen-house.
112. What is to be Done?
Personal Actions You Can Take
• “Thing Globally—Act Locally”. Join local action
groups that address social ills
(hunger, homelessness, political advocacy, etc.)
• Consume less, and when you do—buy
carefully, e.g., coops. (Sounds Un-American—
right?) Read Annie Leonard, THE STORY OF
STUFF.
• Read widely (NEVER STOP LEARNING), use
unbiased news sources/avoid hate-mongering
broadcast media pundits, e.g., beware of the FOX in
the hen-house.
113. What is to be Done?
Personal Actions You Can Take
(Cont.)
• Invest your retirement, IRAs, 401K money in Social
Responsible Investment (SRI) funding companies
that “Do No Evil”, e.g., Calvert Fund.
114. What is to be Done?
Personal Actions You Can Take
(Cont.)
• Invest your retirement, IRAs, 401K money in Social
Responsible Investment (SRI) funding companies
that “Do No Evil”, e.g., Calvert Fund.
• Avoid simplistic, extremist politicians hawking
know-nothing solutions (cutting taxes will not solve
all of our problems, but only reward the rich).
115. What is to be Done?
Personal Actions You Can Take
(Cont.)
• Invest your retirement, IRAs, 401K money in Social
Responsible Investment (SRI) funding companies
that “Do No Evil”, e.g., Calvert Fund.
• Avoid simplistic, extremist politicians hawking
know-nothing solutions (cutting taxes will not solve
all of our problems, but only reward the rich).
• Network, Network, Network—especially through
the internet. Power accrues to individuals when
they act as groups!
116. What is to be Done?
Personal Actions You Can Take
(Cont.)
• Invest your retirement, IRAs, 401K money in
Social Responsible Investment (SRI) funding
companies that “Do No Evil”, e.g., Calvert Fund.
• Avoid simplistic, extremist politicians hawking
know-nothing solutions (cutting taxes will not solve
all of our problems, but only reward the rich).
• Network, Network, Network—especially through
the internet. Power accrues to individuals when
they act as groups!
• Fatal acceptance leads to defeat. Never lose
hope! To preserve equality and democracy, we
must not fail to act.
This Power Point presentation is a lecture delivered at San Diego State University on April 18th, 2011 to participants in the Osher Program. I am its author, Denny Braun, Professor Emeritus of Sociology, Minnesota State University (Mankato). I began my professional career as a demographer/statistician at the U.S. Census Bureau in Washington, DC. After joining the faculty at MSU in 1968 I remained teaching and doing research at this university until my retirement 33 years later.
Right from the start of my career, I had an interest concerning Income Inequality. Inequality had become virulent by the early 1980s, when I began research for a book on this problem. My 1st Ed. Of THE RICH GET RICHER came out in 1991, and the 2nd Ed. was published in 1997.
Absolute income inequality (in actual dollars) is increasing (the rich are “getting richer”!).
The middle class is shrinking.
Poverty has been increasing
U.S. Multinational Corporations have caused much of this growing income inequality--both in the United States and in the World. Unfortunately, I cannot address this topic today because of time restraints, but it is thoroughly discussed in my book.
Huge disparities exist between U.S. locales on income inequality
The growth of relative income inequality is not only continuous but has become explosive
Gross Domestic Product (GDP) per capita is the value of all final goods and services produced within a nation in a given year divided by its mid-year population, converted at market exchange rates to U.S. dollars. PPP means “Purchasing Power Parity” which adjusts for differences of inflation, cost-of-living, taxes, etc. These and other concepts are more fully explained in the accompanying Word document entitled “Suggested Further Sources on Growing Income Inequality”. To begin with, The U.S. is NOT the richest country in the world, ranking 9th behind such European countries as Luxembourg (#1), Norway (#2), Switzerland,Denmark, etc. Two anomalies, Qatar and the United Arab Emirates, are oil rich sheikdoms illustrating the great wealth characteristic of oil exporting nations. The PPP column in the far right of this table illustrates that the U.S., with its comparatively “light” tax burden among nations, improves its world position to 6th richest. But even here, note that we are still 69% below second place Luxembourg
When median household income is compared among U.S. states, one can easily see the richest states (dark green) are on the Eastern seaboard and in New England, together with Alaska and Hawaii. A second tier of well-off states (medium green) form the Upper Midwest and a few western states extending to the Pacific coast. Poor states (light yellow) are mostly in the South. Median household income for the entire U.S. was $50,303 in 2008.
Specifically, here are the top and bottom 6 states by median household income. While Maryland is a “Southern” state, it contains wealthy suburbs next to Washington, DC.
By looking at household income in our 3140 U.S. counties, these regional patterns still prevail. Note that even wealthy states have some counties that are not affluent. One can also see richer, metropolitan counties that have household income well above average: Dallas, Houston, Denver, Minneapolis-St. Paul, Chicago, Seattle, San Francisco, Los Angeles/Orange County, and San Diego.
When median household income is adjusted for inflation, it is called “REAL MEDIAN INCOME”. This allows us to compare trends over a period of 42 years translated to today’s dollars (2009 in our table). It is easy to see a flattening of income from the year 2000 to the present for all racial groups. This occurred well before the Great Recession which began in January of 2008. In constant 2009 dollars, median House Hold income peaked in 1999 at $52,301 for all households and has DECLINED ever since—reaching a low of $49,777 in 2009 (-5% over all)!
This bar chart indicates that the loss of income was not shared equally. Looking at the red bars on the left, which describe the past decade, one can see African American households lost 11% of their income, compared to minus 8% of Latinos and -5% for whites. The major point here, however, is that all groups have been losing income within the past decade. Looking at the pink bars on the right, which describe the 1991-2000 decade, it is obvious that all racial groups made huge gains in real income prior to the start of this century.
Who are the poor? What are their characteristics?Where do they live? Have their numbers increased over time? How about the rate of poverty? Is that unchanged?
We can see that poverty contains a strong racial component: Blacks and Hispanics are two and one-half times as likely to be poor than whites (comprising one fourth of their entire populations). ). It is important to remember, however, that Non-Hispanic Whites are the largest component of poor people at 43% in 2010.
The good news is that since the mid-1960s, when Social Security payments were indexed to inflation, the elderly are less likely to be poor. The bad news is that one of every five American children lives under poverty.
Many of those poor children live in female headed families, where nearly one-third of families of this type are under poverty. Intact, married couple families are quite low on poverty (about 1 in 16).
This chart recounts the number and percent of those living under poverty over the past 40 years. On the right side of the graph, one can see a rise in the rate of poverty since the year 2000 AND a very steep increase in the number of poor persons since that date as well.
To begin with, how “poor” is poor? It depends on your family size and your age. In 2009, if you were a single mom with 2 kids under 18, you were “poor” if your annual income was $17,285 or less. For a single person over 65 years old, the cut off was $ 10,289.
Within the past decade, the poverty rate has increased 27% for all persons, and 30% for all families.
Thus, the poor grew by 12 million in the past decade, totally obliterating the 4 million reduction in poor persons that occurred in the 1990s.
The number of Americans who are poor today, over 43 million, is at an all time high and surpasses the population of most nations. One of every 7 persons in our country is poor!
Many, many Americans have such low incomes that they are on the brink of poverty at all times. In the four year period (2004-2007), just before the onset of The Great Recession, nearly one in three Americans fell into poverty for 2 or more months. The 2008-2011 figures will surely be even grimmer!
Lastly, one of 11 elderly (65 and over) and 1 of every 5 children are living under poverty today.
These two innocent, vulnerable groups comprise 44% of poor people, approaching the 20 million mark.
Unfortunately, the United States does not do a very good job protecting our poor through social services and other governmental programs.
The U.S. has an initial poverty rate lower than many of our industrial peers (26.3%, compared to Sweden’s 26.7%, Germany’s 33.6%, U.K.’s 26.3%, Japan’s 26.9%).
After taxes and transfers, however, our poverty rate only declines to 17.1%. Of the 20 advanced countries, we are last in reduction.
For example, Sweden goes down to 5.3%, Germany to 11%, U.K. to 8.3%, and Japan to 14.9%.
Comparing poverty rates among U.S. states, it is easy to see that the South leads the nation in the percentage of poor persons (dark blue states). Poverty is least likely to exist along the northeastern coast (including New England) and in Alaska and Hawaii (white states).
Among the 6 best and 6 worst states on poverty rates, Wyoming is the only state that stands out for its lack of poverty—and I am not sure why.
Looking at poverty among all 3,140 counties, the poorest in 2010 are in dark purple. Counties with the lowest poverty are white. Both poor whites and blacks drive up poverty in the South, especially in rural counties. Lastly, even “rich” states have pockets of poverty!
About 15% of U.S. Households experienced “food insecurity” in 2009—which translates to over 17 million American families
These households were stalked by hunger and at times did not have enough money to buy enough food at various times during the year. . In California, 1 in 5 persons during 2010 did not have enough money at times to buy food that they needed! (http://www.frac.org/wp-content/uploads/2010/12/FoodHardship_State2010.pdf)
Nearly 7 million households (with one million children) had such severe financial problems that they were forced to miss meals on a regular basis.
Today, the number of households with hunger is at an all-time high since data began to be gathered in 1995.
The number of households experiencing hunger has tripled in the 3 years between 2006 and 2009.
So, what is the message we may hear from Wall Street Tycoons and the very rich? Now that the stock market is making a rebound, and economists have declared the Great Recession officially over, working Americans should “Get over it!”
What about the “average” American? How is the proverbial American middle class doing? In a word—“badly”!
As a reminder, in all income comparisons from year-to-year and decade-to-decade, the effect of inflation has been factored out (called “constant dollars” or “real dollars”). Since peaking in 1999 (at $38,720), median earnings for male workers had sank 6% lower eleven years later ($36,331 in 2009).
Female workers have done slightly better, going from $23,738 to $26,030 in the same period—a 9.7% increase
Thus, in a two-earner, husband/wife family, this means that earnings have been stagnant for 10 years.
Even more threatening is anemic job growth. Only 7 million new jobs were created in 2002-2007 (before the crash)—compared to 20 million created in the same 5-year period in the 1990s.
The Bottom Line: Fewer Americans are employed today than a decade ago, despite our population growing by 25 million.
With an unemployment rate that recently peaked at 10%, the collapse of the housing market, upside down mortgages where millions now owe more than their homes are worth, and a foreclosure epidemic—we have witnessed a new wave of homelessness hitting the middle class.
Now that we’ve briefly looked at the poor and middle class in America, we can ask how the very rich have been doing?
In 2007, just before the Great Recession hit us, the top 25 CEOs of investment houses “earned” $22 billion (about the GDP of Costa Rica). The top 5 managers each got over $1 billion in that year! (Page and Jacobs)
In 2007, America’s top 1% of earners received 23% of the nation’s total income (almost triple the 8% share they got in 1980). (Robert Reich).
In the 1960s, CEOs of major American companies earned 25 times the wages of their typical workers; by 1980 40 times; by 1990 100 times; by 2007 350 times. (Robert Reich). As of 2009, Michael Hiltzik (LA TIMES) reported a Harvard study putting this ratio at 411 to 1.
Now that we’ve briefly looked at the poor and middle class in America, we can ask how the very rich have been doing?
This bar chart documents the pay (in constant 2009 dollars) of the CEOs in charge of our largest 500 corporations. Ignore the colors (separate salary sources) and focus on the height of the bars. Even with a recession dip, they are making 5 times their 1990 salaries.
Most Americans are woefully Ignorant about how exorbitant CEO corporate pay actually is. When asked how much they believe typical corporate CEOs “earn” in a year, Americans estimate their pay at $500,000 (20 times that of unskilled workers or sales clerks
In reality, the CEOs of the largest Standard and Poors 500 corporations make $14 million per year. (See Jacobs and Page, CLASS WAR).
This is 700 times more than the average factory worker and 540 times the salary of the average sales clerk! . This nearly tripled CEO pay (in “real” or “constant” dollars) compared to 1989!
Hacker and Pierson (in their book WINNER TAKE ALL POLITICS) assert that these CEOs form the bulk of the top 0.1% of income recipients in the United States.
This top 0.1% (1 in every 1,000) increased their share of all income in the U.S. from 2.7% in 1974 to 12.3% in 2007. This percentage is the highest ever since the creation of the income tax in 1913.
When the capital gains of this richest 1-in-1000 is counted, this equals $1 trillion per year.
Looking at the data over the past 60 years, it is obvious that the stupendous growth of income for the top 1% took off in 1980 (red line), after the election of RonaldReagan and the introduction of “trickle down” economics, tax cuts for the very rich, and de-regulation of businesses, banks, and Wall Street firms. Again, while increases for persons in the 95th to 99th percentile were gradual (gray line), they were not that substantial in comparison to the top 1%.
This cartoon portrays the relentless march of CEO pay into the stratosphere. Nearly all studies indicate that CEO pay in the U.S. is quite unrelated to how well their companies perform—there is a severe disconnect—CEOs are paid exorbitant salaries even when their companies do poorly. See especially graefcrystal.com. The cartoon also illustrates how ineffective efforts have been by various groups to reign in these excessive salaries.
Most of these corporations that lavish pay on their CEOs are household names. Take note of Mark Hurd, at California firm Hewlett Packard. He resigned in August over a personal relationship with a marketing contractor, but was awarded $53 million in severance pay by the HP Board of Directors just to get him out the door. Shareholders are now suing in the San Jose Federal Court in an attempt to get the money back.
While CEO pay remained in the tens of millions, many Americans have experienced a nosedive in their retirement portfolios, mortgages that have turned upside down so that they owe much more than their home is worth , outright foreclosures or short sales, and an unemployment rate near 10%--the highest rate in nearly a third of a century.
For the remainder of my talk we will shift gears. Rather than speaking of absolute dollar differences, we will now look at how income is “shared” in the United States. We will examine “relative” income inequality, in the sense that we can say the poor have only a third of the income of the middle class—and so on. Why this is very important will be discussed as we go along.
It was John Kennedy who termed the phrase—”A Rising Tide Lifts All Boats”—meaning the poor also benefit from economic growth.
It is true that our Real GDP doubled between 1983-2007 while our population increased only by one-third, i.e., per capita real GDP actually did grow over this past quarter century.
On average, then, Americans should be better off—but this is definitely not the case.
To get a better idea of who benefits vs. those who do not, researchers often divide income recipients into fifths (called Quintiles, or 20% segments).
If income were even, each pie slice would be the same size. There would be 5 equal slices.
This is far from the case! For the last year of available data, in 2009, we can see that the top 5th gets half the pie! In fact, the richest 5% of American households received nearly one-fourth of ALL U.S. income. The bottom 3 slices—60% of all Americans—can be described as “not getting their fair share”. The poorest 5th only received less than 4% of all income!
Since 1947, at the end of WW II, every segment of American society benefitted from economic growth until 1973. (top 3rd of graph). The bottom third of this histogram shows that such sharing of income among all segments of our society ended by the year 2000. The middle segment of bar charts shows a sharp developing of income inequality starting in 1973 up to the year 2000. While all segments are still gaining income, note that the top 5th has increased its income at six times the rate as the poorest 5th. Since the richest 20% of families have much more income than the poorest 20%, this means the absolute dollar increase would be very high for the wealthiest families. Lastly, the bottom level of bar charts traces what has happened since the start of this century. The great majority of American families (the bottom 60%) are now losing money, while there is only slight growth in the richest two quintiles. To reiterate: about two-thirds of American families have seen their incomes slide down over the past decade. Moreover, since the impact of the Great Recession is not accounted for in this data, this loss will be even more severe in the future when data become available. (Source: Economic Policy Institute using Census data)
This bar chart captures what has happened in the past few years. The Great Recession has made everyone less well-off, but there has been much less income decline at the top than at the bottom. And, as a reminder, the top 1% has likely become ever richer despite the Great Recession.
Between 1945 and 1980, incomes increased on average by $19,000. While the richest 10% of our population captured over 1/3 of this growth in real dollars, the bottom 90% still received the other 2/3rds of the income increase.
It is not mere coincidence that starting in 1981--with the birth of Reaganomics--trickle-down economic theories, de-regulation of Wall Street and the banking industry, huge tax cuts for the very rich, etc.–began and still continues to this day.
How much are these differences between groups in real dollars? In 2009, the mean income of top 5% of households was over $295,000. For the bottom 5th, mean income stood at $11,552. This graph shows that this disparity has been growing relentlessly over the past 40 years.
The degree of relative income inequality can be graphed in what is called a “Lorenz Curve”. The green line in this graph indicates perfect equality, where everyone receives exactly the same income. The red line indicates reality, because no society is perfectly equal. We can see that 40% of all the income (the Y or vertical axis) goes to the bottom 60% of all households (the X or horizontal axis). Exploring further, we can see that 60% of all income goes to the bottom 80% of households. The Gini ratio is the area between the red and green lines divided by the area in the the triangle—between the green and blue lines. If all households had exactly the same income, Gini would equal zero (0). If one household had all the income, and the rest of the households had no income, Gini would equal 1.0. Obviously, for all societies reality lies in between.
Some less technical reports now multiply the Gini score by 100%, implying that the U.S. household income Gini score of .468 in 2009 is what we might call 47% unequal. However you interpret it, the march toward inequality has been relentless! The household Gini score in 1968 was .386, compared to .468 in 2009—a 21% increase in relative inequality occurring over 41 years!
A quick glance of this U.S. map shows the most highly unequal states (in red) are in the South and in the Northeast (NY, Conn., Mass.). Calif. Is the lone western state among the most unequal. Green states are especially equal, comprising the Midwest and New England.
How to do we compare to the rest of the world in terms of our relative income inequality measure, the Gini Ratio? This map courtesy of the CIA World Fact book begins to indicate how UNEQUAL the U.S. is when compared to other nations. While green and blue countries are more equal, purple and red nations are quite unequal.
The U.S. has a family income Gini score (not house hold Gini) of .450, which makes us the 42ndmost UNEQUAL of 134 countries ranked by the CIA. This means our percentile rank of 31% on the World Equality Index puts us in the bottom third of all nations when it comes to economic equality among all families throughout the world! One can easily see that the most equal countries are European. Sweden, at the top of the list with a Gini of .23, has a score that would literally have to double to become as unequal as the United States in its pattern of family income dispersion.
It can be asked Why we should worry about relative income inequality anyway? In terms of wealth, our country is still quite rich. Even if our bottom two quintiles (40%) of households are much less well off than the top quintile, are not they still better off in real dollars than in less developed countries? There is room for grave concern, because research shows that high relative income inequality is associated with a number of negative trends.
High homicide Rates (among nations and among U.S. states)
High rates of imprisonment (among nations and among U.S. States)
High Teen Birthrates (among nations and among states)
High rates of illegal drug use (nations)
High infant mortality rates (nations
Lower life expectancy (nations)
High rates of Mental Illness (nations
Low rates of contraceptive usage (nations)
Lower access to safe water (nations)
For detailed charts and graphs exploring these findings, see: Richard Wilkinson and Kate Pickett, THE SPIRIT LEVEL: WHY GREATER EQUALITY MAKES SOCIETIES STRONGER, 2009. See especially their free, downloadable Power Point presentation at www.equalitytrust.org.uk
For comparison between nations, Wilkinson & Pickett use the ratio of income received by the top 20% of households divided by the bottom 20%. In comparing U.S. States, they use household Gini ratios. Both are comparable inequality measures. You can easily see in this scatter plot that U.S. states with high income inequality also have much higher high school dropout rates. You will note that California, our home state, is high on both measures. The area I am from, comprising the upper-Midwest states of Minnesota, Iowa, and Wisconsin (together with Alaska, Utah, and New Hampshire), are very low on both measurements.
Nations with greater income inequality tend to have high school students with much lower math and reading test scores. Note that the U.S. is at the far right in the graph, reflecting high inequality and low educational scores.
Murder rates are higher in more unequal U.S. States.
Basic trust in our fellow human beings has been diminishing over time in the U.S. as relative income inequality has risen. Distrust of others was at an all-time high in 2006, the last year that data was available for this measure. This is quite serious, since it equates with a breakdown of community—the sense that we all have a shared destiny and that we’re all “in this together”.
High relative income inequality among U.S. states is associated with low levels of voter turnout. The latest data (2009) from the Center for Responsive Politics reports that nearly half (261 of the 535 members) of Congress are millionaires, while their yearly median income is $911,000. For Senators, median income is even higher at $2.38 million per year. My question would be: how can these elected officials really relate to the average American household, which now has less than $50,000 in yearly household income? It may be that many poor and average income Americans have become so dispirited with uncaring, nonresponsive politicians that they no longer bother to vote.
This cartoon illustrates the reality that political power is increasingly being wrested away from us by corporations, banks, and the very rich. For a cogent, detailed, well-researched book on the damaging effect of corporations financing politicians and political campaigns, see: Jacob S. Hacker and Paul Pierson, WINNER-TAKE-ALL POLITICS: HOW WASHINGTON MADE THE RICH RICHER—AND TURNED ITS BACK ON THE MIDDLE CLASS. 2010(on handout).
Our propensity to become fat, and therefore less healthy, is also related to high relative income inequality. States with high levels of obesity also tend to have high relative income inequality.
Lastly, unemployment tends to rise in U.S. states that are also high on relative income inequality.
It must be noted that American are aware of these incredible levels of income inequality in our country. A majority of all Americans (black bars) want to see income inequality reduced. This is true even among those who are Republican (gray bars) and those with high incomes (white bars).
Crankshaft has a compassionate view of income inequality despite his being a curmudgeon! Here he is out having lunch with his buddies, explaining that it will not matter if the economy improves unless everyone becomes better off.
Finally, be sure to read Robert Reich, a former Secretary of Labor and renowned economist, who has DETAILED suggestions in his must-read book, AFTERSHOCK. His data show no trickle-down or economic boost given to Americans by these cuts. Rather, investment by the very rich typically goes to building new factories in China—further depriving our country of needed jobs.
Cut defense spending/stop fighting needless wars (Stiglitz estimates the Iraq War has cost $3 trillion)
Invest in R & D (cutting-edge Green Technology)
Re-industrialize our country, especially hi-tech areas!
Continue to fully fund our public university system—the envy of the world and the font of our national productivity.
Reduce our national debt.
Reinstate more progressive tax rates to protect the middle class (see Robert Reich, AFTERSHOCK, NY: Knopf, 2010).
What is to be Done?Personal Actions You Can Take
“Thing Globally—Act Locally”. Join local action groups that address social ills (hunger, homelessness, political advocacy, etc.)
Consume less, and when you do—buy carefully, e.g., coops. (Sounds Un-American—right?) Read Annie Leonard, THE STORY OF STUFF.
Read widely (NEVER STOP LEARNING), use unbiased news sources/avoid hate-mongering broadcast media pundits, e.g., beware of the FOX in the hen-house.
Use “social cause” VISA cards like WORKING ASSETS.
Invest your retirement, IRAs, 401K money in Social Responsible Investment (SRI) funding companies that “Do No Evil”, e.g., Calvert Fund.
Avoid simplistic, extremist politicians hawking no-nothing solutions (cutting taxes will not solve all of our problems, but only reward the rich).
Network, Network, Network—especially through the internet. Power accrues to individuals when they act as groups!
Fatal acceptance leads to defeat. Never lose hope! To preserve equality and democracy, we must not fail to act.