When my grandparents came to this country, about 100 years ago, the majority of Americans could still build a better life for their children and grandchildren by working hard and playing by the rules.
The people who rose to become wealthy often did so by inventing things and producing products – such as cars or televisions – that bolstered the economic growth and material well-being for society as a whole. Some titans of industry, such as Henry Ford, believed they had to pay their workers a middle-class salary so that they could afford to buy the products they made, but those industrialists who resisted paying high wages were eventually forced to do so by unions and government minimum wage hikes.
Sweat, toil, and innovation generated broad-based prosperity, creating a thriving middle-class that was the envy of the world.
Unfortunately, that era of "opportunity capitalism" is long over, replaced by a system of "crony capitalism," in which people are more likely to get ahead based on who they know and how they game the system than on how hard they work or on the worth of their products. To make matters worse, the rich have rigged much of our political system in order to pay the lowest taxes in decades, and they’ve ensured minimal regulation of their financial activities, no matter how often their shenanigans wreck the economy and require government bail-outs.
That’s why America and New York now have the highest levels of inequality of wealth in decades.
The number of city residents living below the federal poverty line ($17,600 for a family of three) increased from 1,500,484 to 1,546,046 from 2008 to 2009. One in five New Yorkers is now poor. The average household income dropped citywide from $51,116 to $50,033.
Yet the number of billionaires based in New York City increased from to 56 to 57 in the last year and their collective net worth increased by $19 billion (from $183.5 to $202.65 billion), according to data recently released by Forbes magazine and analyzed by the New York City Coalition Against Hunger.
A New Yorker working full-time at a minimum wage salary ($7.25 per hour) for 52 weeks would earn $15,080 in a year, often too little to feed their family. According to the Coalition’s calculations, that means that New York’s 57 billionaires collectively have as much money as the annual earnings of 13 million minimum wage workers. Those billionaires have an average net worth of $3.6 billion, which means that, on average, each billionaire has as much money as the annual earnings of 232,000 minimum wage workers.
It’s no wonder that New York City now has a higher inequality of wealth index than Burkina Faso or India and that Manhattan, with an even greater disparity than the city as a whole, has higher inequality than Haiti or Brazil.
We need to return to true opportunity capitalism. Government should not try to guarantee equal outcomes, but it must ensure a level playing field for equal opportunity. We need economic policies that create living wage jobs in every neighborhood. To give everyone a fair chance at excelling in such jobs, we need to make world-class education, healthy food, reliable mass transit, and safe housing available and affordable for all New Yorkers. And we need to responsibly pay for those measures by slashing corporate welfare and returning to a time when the ultra-rich paid their fair share of taxes.
Let’s return to an America that offers upward mobility to anyone willing to earn it. That’s the least we can do to honor the memories of our hard-working grandparents.
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