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A 2011 study by the Congressional Budget Office found that from 1979 to 2007, the richest Americans saw an increase in wealth of about 275 percent, while the bottom 80 percent of Americans saw their incomes increase by a mere 13 percent after adjusting for inflation.

During this time, the most fortunate Americans have experienced a substantial increase in wealth while regular Americans have seen their median household incomes flat line. Between 1967 and 2009, the annual median income for regular Americans went from $40,000 to $49,000, a 13 percent rise in real income after adjusting for inflation.

That’s not the case for the top one percent. While the average CEO earned about 20 times more in 1965 than an average employee, that same CEO earns 380 times more today than regular employees. According to the AFL-CIO's 'Executive Pay Watch', in 2011 the average worker made about $34,000 per year while the average CEO made around $12.9 million.

Nobel Prize winning economist Paul Krugman defines these past 35 years as 'The Great Divergence' - where regular Americans have seen their household incomes flatline or decline while the top one percent have seen a substantial increase in wealth.

"Since the late 1970s the America I knew has unraveled. We’re no longer a middle-class society, in which the benefits of economic growth are widely shared: between 1979 and 2005 the real income of the median household rose only 13 percent, but the income of the richest 0.1% of Americans rose 296 percent."
Unfortunately Krugman is right, we’re no longer a middle-class society in which the benefits of economic growth are widely shared.

The Gini Index, used to measure income distribution, ranks the United States among the most economically unequal when compared to similar highly developed nations. According to the findings of the Gini Index, income inequality is now more severe in the United States than in nearly all of Europe, Asia, and North & West Africa.

The 400 richest Americans control more wealth than the bottom 60 percent (150 million) of Americans combine.

The United States is more economically unequal than Japan, India, Bulgaria, Norway, Italy, Belgium, Poland, and the United Kingdom - to name a few. The United States is currently on par with China and Mexico when it comes to a fair distribution of wealth.

As inequality increases, so does poverty.

As the income inequality gets worse, poverty also rises correspondingly. In 2011, the U.S. Census Bureau announced that the 2010 median household income declined while the poverty rate increased.

The Human Poverty Index - developed by the United Nations - ranks the United States 17 out of 19 similar highly developed countries.

It's now estimated that around 46 million Americans are living below the federal poverty level of $22,350 a year for a family of four. Of those 46 million Americans, 15 million are children. This means that 21 percent of all children in the United States are now living below the federal poverty line.

According to the U.S. Census Bureau;

The nation's official poverty rate in 2010 was 15.1 percent, up from 14.3 percent in 2009 ─ the third consecutive annual increase in the poverty rate. There were 46.2 million people in poverty in 2010, up from 43.6 million in 2009 ─ the fourth consecutive annual increase and the largest number in the 52 years for which poverty estimates have been published.
Plain and simple: among other first world nations, we are at the bottom of the list when it comes to a fair distribution of income. This has created a substantial increase in poverty and a weak economy.

Income inequality creates poverty and a weak economy for 99 percent of Americans.

As income inequality has gotten worse, so has the economy. When more people have less money, consumer spending goes down. When consumer spending decreases the economy suffers. And when the economy suffers, who suffers most? Regular middle and working class Americans.

In order for the economy to recover from its recent anemic performance, we must support serious solutions to income inequality: raising the minimum wage to a livable wage, ending wage theft, supporting unions and organized labor, strengthening labor laws, getting the money out of politics, enforcing the necessary regulations on Wall Street and the rest of the financial industry, and treating white collar crime more seriously. Employee ownership of enterprise should also be encouraged whether through ESOP's, stock options, or cooperative businesses.

These are serious solutions that would help put an end to rampant income inequality in the United States, fueling economic growth, creating jobs, alleviating poverty, and strengthening a weak economy.

Originally posted to Paddy Ryan on Fri Aug 10, 2012 at 06:54 AM PDT.

Also republished by Income Inequality Kos.

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Comment Preferences

  •  Tip Jar (12+ / 0-)

    The best way to rob a bank is to own one - William K. Black

    by Paddy Ryan on Fri Aug 10, 2012 at 06:54:43 AM PDT

  •  I would observe that public policy is now designed (6+ / 0-)

    to trap certain groups into perpetual poverty, such as single moms.  It would seem the state would take a great interest in tracking down deadbeat dads and making them support their kids.  This would remove many kids and moms from the welfare rolls.

    My daughter recently went to DSS to have her former fiancee pay for his 2 daughters.  The intake worker informed her that, due to austerity measures, clients now had to pay for DSS to locate and contact deadbeat dads. She said it would cost $500 up front.
    If he refused, DSS would take him to court but the client had to pay all court costs, which would be an additional $2000.
    So if she paid $2500 and had DSS track down the deadbeat and take him to court, he may choose to take the 30 days in jail instead of paying.  Then the process would start all over again with another $2500 due.
    Worse, it is possible the  judge would only put him on probation even if he did refuse to pay.
    Worse yet he has threatened to move out of state so the local court would have no jurisdiction and sue for custody of the girls in the other state.    

    •  On the other hand (0+ / 0-)

      If the deadbeat dad refuses to pay, he could rot in jail for up to 6 months, at least in NYC.

      Lessee, the average cost for keeping someone incarcerated is roughly $40,000 per year, so about 20 grand for each deadbeat dad we lock up.

      Just not sure if I can afford that kind of government waste.

      I'd much prefer to have the government give a mother $20,000 a year to help pay for raising a child.

      •  How about rotting 18 mos w/o representation, (1+ / 0-)
        Recommended by:
        Woody

        a hearing, or conviction, as has happened here in Tennessee, where the state supremes ruled a few years back that, despite the plainly language of the state and federal constitutions Tennessee citizens enjoy no right to pre-trial habeas corpus (only post-conviction habeas? rly????) in either civil or criminal cases, nor are defendants are entitled to appointed counsel for "civil offenses" (except juvenile dependency & neglect cases) -- even when pre-preliminary-hearing and pre-trial detention is imposed that would be considered draconian even for violent criminal offenses.

        And the f*ing District Courts, Sixth Circuit, and U.S. attorneys don't even bat an eye; nor can the state ACLU, much less the Tennessee Defense Lawyers Assoc, be bothered.

        I am extremely out of sympathy with deadbeat parents -- dads OR moms -- but this kind of treatment not only bleeds taxpayers and make it impossible for the illegally jailed to work, it should be intolerable to a society that calls itself "free" and tells itself happy-happy stories about adhering to the Constitution.

  •  Nobody can live healthy and be productive on a (5+ / 0-)

    yearly wage of $22,500. Not a family nor a single person. I don't know where these figures come from within the government, but those who believe that a family or a single person can live on $22,500 per annum, need two things. First, make them live on that amount for two years and then fire their ass for being consumately stupid and harming Americans.

    End of Rant.

    Hope has a hole in it when Republicans come, bringing shackles and sorrow; branding their greed on the backs of the poor. - Wendy Connors

    by Wendys Wink on Fri Aug 10, 2012 at 07:18:38 AM PDT

  •  But doesn't a rising tide lift all boats? (1+ / 0-)
    Recommended by:
    raincrow

    Assuming, of course, you have a boat. And that it's a nice sturdy one - in good enough shape to handle the incoming tide.
    Sometimes a rising tide makes it hard to keep your head above water.

    Thomas Paine: When my country...was set on fire about my ears, it was time to stir. It was time for every man to stir.

    by Bruce Brown on Fri Aug 10, 2012 at 08:55:43 AM PDT

  •  You describe the problem well (2+ / 0-)
    Recommended by:
    raincrow, Bruce Brown

    The proposed solutions are pretty awful lame.

    Let's not think small. Try a few of these:

    Extend Medicare to all at age 62, with eligibility to "buy in" by individuals or by companies for their covered employees and retirees from age 50 or 55.

    Revolutionize free public schools, to provide preschool education/childcare service for all children 1 year and older; with schools open up to 10 or even 12 hours (don't mean we make every teacher put in a 10-hour day; we would have teams of teachers with overlapping shifts); three free meals a day; bilingual education for all so that every child learns a second language, don't care if Spanish, French, Chinese; plenty of teacher's aides and phys ed/playground assistants; MUCH smaller classroom sizes in the early grades; intensive parenting training for family members of the students; etc. Full-day school days would allow parents to seek work, especially part time work. And it would create hundreds of thousands of socially useful jobs as well. With massive federal funding, this program would help to eliminate the disparity between the rich who pay tens of thousands of dollars to send their kind to kindergartens while the 99% often have to give their preteens a key to the house so they have someplace to go after school lets out. But we can get the money, mostly from Wall Street and the super rich, no problem.

    Remove the cap on Social Security taxes (currently topping out on incomes of about $110,000 or so -- sorry, the Wikipedia entry is for 2010, so it is out of date!) so that people making millions in a single year -- Wall Street banksters, corporate C.E.O.s, Hollywood stars, pro athletes, others -- would pay the roughly 6% F.I.C.A. taxes on all of it. ALL of it. And their employers would pay the matching 6% on ALL of it.

    Make the lower rate of the capital gains tax apply only to assets held for 2 or 3 years.

    Eliminate the tax break for "carried interest", i.e., the compensation that hedge fund managers receive, so that these banksters would have to pay normal income tax rates.

    Collect a minuscule financial transactions tax like other countries do, so that Wall Street traders moving millions of dollars in trades every few seconds would pay, let's say, 1/100th of 1 per cent (one penny on every $100) on every transaction -- it would raise MANY billions.

    Reform the gift tax to encourage givings while living, that is, raise the tax-free gift amount from $13,000 to, say, $25,000 a year.

    Reform the estate tax to an inheritance tax, where higher rates kick in the more any individual inherits, so that inheritances from four grandparents and two parents and perhaps some aunts and uncles don't cascade down onto one stinking rich individual without high taxes (or two Koch brothers) coming into play.

    Legalize, or at least decriminalize, marijuana possession and use. (The current policy of arresting a million or so mostly young black and Hispanic men means these oppressive laws fall largely on the poor, with all the 99% paying for cops, judges, jails, and the rest of it, yeah, like profits for private prison operators.)

    We could come up with many more proposals, but sadly, no one is listening.

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