Thursday, November 8, 2007

Income Inequality

Here's a few sites with information on the growing income inequality that has been taking place over the past few decades. Its only going to get worse unless we stand up and stop supporting the corporations and politicians who are taking advantage of us! The most shocking things i've learned is that the average income hasn't changed since 1970 (adjusted for inflation!) and the minimum wage was frozen during reagan/bush years, effectively giving the poor an average 2% pay cut per year due to inflation.

For Richer -

great in depth (but long) article on income inequality from 2002 that show's we're entering another Gilded Age and how the middle class of today is very different compared to 1950/60s. Here's some quotes:

Most of the gains in the share of the top 10 percent of taxpayers over the past 30 years were actually gains to the top 1 percent, rather than the next 9 percent. In 1998 the top 1 percent started at $230,000. In turn, 60 percent of the gains of that top 1 percent went to the top 0.1 percent, those with incomes of more than $790,000. And almost half of those gains went to a mere 13,000 taxpayers, the top 0.01 percent, who had an income of at least $3.6 million and an average income of $17 million

Globalization can explain part of the relative decline in blue-collar wages, but it can't explain the 2,500 percent rise in C.E.O. incomes. Technology may explain why the salary premium associated with a college education has risen, but it's hard to match up with the huge increase in inequality among the college-educated, with little progress for many but gigantic gains at the top.

Adjusting for inflation, average family income -- total income divided by the number of families -- grew 28 percent from 1979 to 1997. But median family income -- the income of a family in the middle of the distribution, a better indicator of how typical American families are doing -- grew only 10 percent. And the incomes of the bottom fifth of families actually fell slightly.

Income and Wealth Inequality -

relatively short page with lots of good data, that shows the average income hasn't changed since the 70s, while the top 20% has seen an increase, and the top 1% the most. According to the Federal Reserve, in 1990 the richest 1 percent of America owned 40 percent of its wealth -- the greatest level of inequality among all rich nations, and the worst in U.S. history since the Roaring Twenties. Furthermore, the richest 20 percent owned 80 percent of America -- meaning, of course, that the bottom four-fifths of all Americans owned only one fifth of its wealth. Talks about regan and bush freezing minimum wage during their terms, so they effectively had a wage cut as inflation increased.

Class, Society and Meritocracy -
very good one page explanation of history and how the rich stay rich and how they justify it.

Incomes -

Median household and individual incomes have gone down every year since 2000 except for 2005:

The prices of healthcare, higher education, fuel, etc. are rising faster than the broader rate of inflation, so the lack of income growth is hurting the middle and lower classes with respect to these critical items. This will eventually lead to reduced consumer spending, especially as credit dries up, resulting in lower growth. The rich can only spend so much on goods, and their capital investments require that there is a broad base of active consumers to generate corporate profits.

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