January 7, 2014

5 facts about economic inequality

Issues of inequality seem poised to play a large role in the public discourse this year. President Obama is expected to use his Jan. 28 State of the Union speech to promote specific proposals aimed at inequality, such as raising the federal minimum wage. Congressional Democrats reportedly see inequality as an issue that could help them in this year’s midterm elections. And some Republicans, such as Sen. Marco Rubio of Florida, have begun talking about creating “a new opportunity society in America” as a conservative approach to addressing persistent poverty.

As the debate gears up, it’s important to understand some basic facts about how inequality is measured, the trends over time and how the U.S. compares globally. Here’s a “5 Facts” primer:

1By one measure, U.S. income inequality is the highest it’s been since 1928. In 1982, the highest-earning 1% of families received 10.8% of all pretax income, while the bottom 90% received 64.7%, according to research by UC-Berkeley professor Emmanuel Saez. Three decades later, according to Saez’ preliminary estimates for 2012, the top 1% received 22.5% of pretax income, while the bottom 90%’s share had fallen to 49.6%.

2The U.S. is more unequal than most of its developed-world peers. According to data from the Organization for Economic Cooperation and Development, the U.S. ranked 10th out of 31 OECD countries in income inequality based on “market incomes” — that is, before taking into account the redistributive effects of tax policies and income-transfer programs such as Social Security and unemployment insurance. After accounting for taxes and transfers, the U.S. had the second-highest level of inequality, after Chile. 

3The black-white income gap in the U.S. has persisted. The difference in median household incomes between whites and blacks has grown from about $19,000 in 1967 to roughly $27,000 in 2011 (as measured in 2012 dollars). Median black household income was 59% of median white household income in 2011, up modestly from 55% in 1967; as recently as 2007, black income was 63% of white income.

4Americans are relatively unconcerned about the wide income gap between rich and poor. Americans in the upper fifth of the income distribution earn 16.7 times as much as those in the lowest fifth — by far the widest such gap among the 10 advanced countries in the Pew Research Center’s 2013 global attitudes survey. Yet barely half (47%) of Americans think the rich-poor gap is a very big problem. Among advanced countries, only Australians expressed a lower level of concern, but in Australia the top fifth earned just 2.7 times the income of the bottom fifth.

5Wealth inequality is even greater than income inequality. NYU economist Edward Wolff has found that, while the highest-earning fifth of U.S. families earned 59.1% of all income, the richest fifth held 88.9% of all wealth.


Category: 5 Facts

Topics: Income Inequality

  1. Photo of Drew DeSilver

    is a senior writer at Pew Research Center.

75 responses to “5 facts about economic inequality”

  1. This proves the point that statistics can be graphically manipulated to fit any notion. The wealthy are doing well, as they always have, and the poor can’t eat this post.

  2. mike anderson says:

    Wealth in significant chunks makes job growth because with the trend today for mega government and mega business it is almost impossible for someone with a small wealth to get a business started.
    Last, this trend socially would be comparable to the number of households with a single female head. Moral issues also play in to this.

  3. Jon says:

    I’m confused about Social Security being an income transfer policy. the ceiling is capped at $133,000 the last I heard, so these are taxes from the working class going back into the working class. no transfer there. might be a good idea to remove the cap so we can have a bit of “transfer” from the rich to the poor.

    • Dave says:

      That is so right Jon. You and I pay 6.2% on all of our income, 100% of it, for Soc Sec taxes. But the really wealthy pay almost nothing. Take Mitt Romney with an income of about $21 Million. He pays around .0001% of his income in Soc Sec taxes!! Why should we pay an additional 6.2% in taxes than the really wealthy – who already pay at a much lower rate? The average American pays about 30% of his income in taxes. The top 1 or 2 % pay about 16% and the really wealthy, like Mitt pay around 12%.
      If everyone paid Soc Sec taxes on ALL of their income. We would not have to worry about Soc Sec forever. In fact Soc Sec taxes could probably be reduced to 4% or even less. That would be much fairer all around.

      • Marsha says:

        I was just about to bring up Mitt Romney myself. As a self-employed person, I have it even worse. I have no one to match my FICA so I have to pay it all. My effective tax rate is 25% because I am self employed and I earn income rather live on capital gains. If only I was at the 12% Mitt is at. Of course, the treatment of capital gains and the tax rate on hedge funds returns is the kind of “redistribution” to the wealthy that takes place in our tax policy. Mitt and his ilk can make all the money they want from hedge fund investments. But it is only fair that it be taxed as income. Just this one change in tax policy alone could produce billions in revenue. But the poor, poor billionaires feel like they are being picked on for being job creators. Tell me again how they create jobs? And tell me how taxing them fairly would make them less willing to invest and earn billions?

        • Olaf Virro says:

          Those who think that the employer pays half of the Social Security tax are sadly mistaken. You, the employee, pay it ALL. To the employer who looks at the cost of hiring you, the “employer”portion of Social Security is just like wages or a salary. The employer would be just as happy to pay the employer portion to you (and you could then write the check to the Government). And as is the case now, you as the employee would not get a deduction on your tax return for the combined Social Security taxes you “paid”.
          Incidentally, capping the wages and salaries for Social Security taxes makes sense in that the eventual Social Security benefits are not proportional to the amounts paid in. It is true that the higher income earners will get somewhat more in eventual benefits but even then may get also taxed more (up to 85%) of their benefits. Removing the cap would make Social Security even more of a redistributive welfare program.
          In my own case, I would have much rather had all my Social Security payments invested in something like S&P 500 index, with the result that my benefits today would be at least three times as big. Over the horizon of a working life time the yearly ups and downs of the market don’t amount to much as over a 30 to 40 year period you should be earning 7-10% annualized.

      • John leary says:

        If a millionaire pays 6% on his income to Social Security, he pays $60,000. In my forty plus years of working there were decades when I didn’t earn anywhere near that much. Point is, an EQUAL payment to Social Security is fair .. from the view of what the “pot needs from each player”. You wouldn’t ask the winners in a poker game to ante up ten times as much as the losers, would you?
        Tithing is a nice idea, and indeed it would put much more money into the Social Security pot. Then the question arises, do we allow payments, once eligible, to exceed some measure of personal contributions. Ok, lets. But then how much greater? Should we let deadbeats retire on SS payments as if they were hard working miners, or auto workers, or stock brokers ?
        Social Security is a ponzi scheme (where costs are passed to coming generations), and a losing one (because the number of possible payers in future generations is decreasing, just like the poker game where all the winners quit, and then you get a good hand, but then there’s no money to win.)
        What’s worse is that some folks just don’t live long enough to collect Social Security? How unfair is that, especially if an insurance actuary can predict with good accuracy for large groups, who will live to collect and who will not. (More black men die before collecting than white men — check out that hidden fact.)
        The worst thing about Social Security is this: when it built up large so-called “surpluses”, rather than let them stay in SS and earn money for future generations, CONGRESS raided the pot and spent the money on “great society” welfare programs. If you give the poor their payments too soon, then their “banked inheritance” goes to zero and there is no “income for them later”
        Lots of problems with Social Security AND none of them will be solved by having millionaires pay more money into the program. Fix CONGRESS, and somehow convince all of your daughters to bear at least two children and raise them to work for a living, and most SS problems will go away.

        • Ronald King says:

          Again, inflation is the only thing breaking society security, and in necessities, the rich control these prices. A shrinking population would have no effect on social security unless wages actually went down. The people pay into it. If population goes up, a surplus is created. When population goes down, that surplus is then used; however, if pricing problems then persist, the surplus is used to combat the inflationary pressures. The problem with social security is that certain administrations robbed it. There are treasuries however, but then again, that requires the government to actually not have a deficit which is also caused by decisions causing the government to spend more usually through inflation or wars or on great society welfare programs such as unfunded military spending.

          As for children, I wholly believe that an end to producing children while necessities are not met is a much better solution to society’s problems. If society does not wish to encourage population growth, then it makes sense to not deal with growing the population. I think it only fair that the poor should have the right to boycott a society that makes no sense.

    • Bobby Lawndale says:

      Jon, let me unconfuse you. What retirees receive is only somewhat related to what they paid in. Those who pay in the most (i.e. high income earners who meet or exceed the cap each year), receive the worst return via benefits. Low income earners receive the best return. Clear now?

      • SP says:

        Except that the person who paid the most will get a bigger SS check than the person who paid the least. Yes, they will get some bump up, but we shouldn’t punish everyone for not being a top earner. I think every poor person would like to make over 100K, but sadly they don’t and in most cases it’s not cause they’re not working hard enough.

        • Mike Petrik says:

          Sure, but that doesn’t alter the fact that Social Security operates on a net basis as an income transfer. Indeed it is a hybrid defined benefit plan and welfare program. The Dems like the latter, and the GOPs indulge the former as long as the latter is not too pronounced. I don’t really have a problem with this hybrid, but the idea that failing to transfer part of person A’s ROI to person B’s ROI would be “punishing” person B strikes me as worse than silly, but then I don’t think like a progressive.

    • Bobby says:

      You would need to cap the pay out or the rich would get more of the pay out based on their higher contribution.

  4. dtg says:

    Increasing subsidies to Food Stamps, S.S. Disability, Welfare, etc. will retard the growth of the bottom 20%. Always has, always will. The top 10% will always advance with Real GDP growth. The spread is going to get wider unless we get rid of liberal policies toward poverty.

    • joeg says:

      So you’re saying that that’s why income inequality is getting worse? Somehow I don’t think that’s it: I think that it’s more the tax policies that favor the rich, who obviously aren’t being taxed in proportion to their good fortune. The rich are getting richer because they’ve bought legislators, jurists, and commentators who keep lying to the poor that all they need to do is work harder to advance. For 99% of people with a lot of money, they got it by inheriting it and holding on to it.

  5. Bruce says:

    More and more of the wealth at the top is held in financial instruments — investments tied not to manufacturing but to other financial instruments. Think collateralized debt obligations, so-called CDO-squared, etc. Then there are the investments tied to employment in other countries: an unavoidable result of the global economy and technological advances, to be sure, but investments that generate wealth to the 1% – 2% here, but take wealth away from the lower 20%. And then there are the IT people who develop a great new app and sell it for billions of dollars. These firms employ very few people but are heavily capitalized. People who disparage wealth/income-inequality as unimportant or non-existent are painting with too broad a brush. Yes, there will always be people who are much richer than others. But the current system is creating a two-tiered of the super-rich and everyone else. In this sense it is like the economy immediately preceding the Progressive Era, and perhaps a new kind of Progressivism can create greater opportunity. I’m not optimistic.

  6. Dave says:

    If the minimum wage were increased to say $10 an hour that would give minimum wage workers about $100 a week more. They would spend all of it. thus helping the economy by stimulating it, probably by about $50 Billion a year. On the other hand if you cut taxes to the rich by $50 Billion a year probably almost none of it would go into the economy. Instead it would go into banks, most likely in the Cayman Islands or Switzerland, When someone is making a million a year or $53 million – like my bank’s CEO – they are not going to spend an extra $100,000 or $250,000, they are already have more than they can possibly spend. It needs to go to people who will put it into the economy, buying stuff that others make, thus creating jobs.

  7. Dave says:

    Oh, and the minimum wage should be tied to inflation. If you are on Soc Sec it is adjusted every year for inflation, so is the pay of Congressmen. but the Min wage stays stuck for years.
    Also if the min wage went to $10 or $12, workers at fast food places and Walmart would not need to collect food stamps as much so that would save the middle class taxpayer money.

    • Betty says:

      the min. wage was instituted in 1938. throughout history , when the min. wage is raised the unemployment goes up. If the min. wage is raised to $10-12 , there would be less people being hired. small businesses would go out of business/ or would not be able to start. Most people earning the min wage are young, inexperienced, lack skills, and need an entry level job to get the means to gain these attributes so as to go up the ladder. Inequality of wages can be closed through better education, promoting strong families, good values, self reliance, and an attitude that is positive rather than that of victim. One of the top executives at Walmart started in a minimum wage job. There are many highly successful people who started with hopes, dreams, determination, a willingness to work long hours,study, and sacrifice present desires for the goals they set. It is fine to help those who are truly in need and/or incapable of helping themselves., but for those of us who applied our selfs even though coming from a very limited background, are tired of the whining.

  8. Matt B says:

    The return of income and wealth inequality to pre-depression levels closely follows the loss of clout by labor unions since the 1980’s. The Dickension horrors of the early industrial revolution gave rise to unions, and as the power of unions wanes, the divide widens. Of course, the exploiting of workers by the upper classes also gave rise to several revolutions around the world. If we allow market forces total freedom in dictating wages and working conditions, we will be facing the same responses again.

    • Bobby says:

      Unions did well till they found out they could use the dues to buy political favor and the politicians saw they could use the unions .A good example are the government Unions in Wisconsin and how their insurance cost was inflated because of the Union run insurance the Union selected.The Car business is a good example of good gone bad also.

  9. The 2nd point from the OCED is most telling.
    BEFORE government re-distributive programs, income inequality is bad but not among the worst, but AFTER taxes and such, we jump from 10th worst to 2nd worst. In other words, the gubmit is practicing income redistribution, taking from the middle class and giving it to the already wealthy!!

    The current economic system is rigged against those who do not have the money to buy government. It is rigged against the working class, the small business owner, the cubicle dweller, and the family farm. It is sad that so many of us that are among these groups willingly support those who are sucking us dry because they are told that the pain they feel is not coming from above, but rather from those with the least power. It is the “other” that is making them miserable.

  10. Joe G says:

    I think you need to explain how redistribution policies make income inequality worse.

    • Why would they explain something that isn’t true? Why did the middle class grow and income inequality shrink when all those government programs were equalizing the previous oppressive inequality? Many people made it into the middle class simply because of the GI Bill alone, and that was just one of many similar programs.

    • Scott Meilyk says:

      Some current policies that steal from the poor and middle class to further line the pockets of the super-rich exacerbate the problem. That’s why it’s finally time for the rich to pay their fair share, to raise the minimum wage to a LIVING wage, to tax capital gains like any other income, to bring in real universal single-payer healthcare, etc., etc.

      • Godfather2014 says:

        Scott Meilyk…fascinating. Define & calculate fair share? If the ‘rich’ pay more, do they get more services commensurate with paying more? Help me understand how ‘fair share’ is morally right & economically sound?

  11. Tom says:

    I started out poor. Making 14K a year as a young man. But I worked hard over the years, and now I make 500K a year and own a 2Mil dollar home. No handouts. No one wealthy in my family. Capitalism is sort of like Darwinism in my mind…survival of the fittest.

    • SP says:

      That’s great Tom. Congratulations! But working hard is not directly correlated to earning a lot of money. That’s why poor and hard working people, that sometimes work 2 jobs, are still poor and don’t make 500K a year. And that’s very unfortunate.

    • creageous says:

      The trouble is that self-made individuals like yourself think that anybody can do the same. It’s simply not true.

    • Scott Meilyk says:

      creagous said it best: You should be thankful for the advantages and the society that enabled your wealth. This is why it’s time for the rich to pay their fair share and finally give back to the society that helped bring about their success. It’s morally right and economically sound.

  12. Donald Brown says:

    Well, I know a Wal-Mart greeter who has grown savings to a half million dollars in 23 years by saving his money on slightly more than the minimum wage. Of course the profligate will want to tax his income for their benefit.

  13. Tom says:

    I think you should all know that making 500K a year and owning a 2Mil dollar home does not make me happy. Having family and friends who I love, and who love me that makes me happy. And making money compromised that.
    I was much happier when I made 14K a year. Life was simplier. I had more time to spend with people. All this preoccupation with wealth redistribution and making more money doesn’t better people’s lives. Having more money and having more “things” actually impedes happiness, I’ve found.
    I wasted all these years putting in long hours and making more money for what? I should have focused on family and friends and just having enough money for the basics. Trust me, the Warren Buffets and Bill Gates of this world aren’t happier than you or I.
    Savor the relationships in your life and don’t let the idea that you SHOULD have MORE money make you unhappy.

    • slk says:

      news flash – the gap will always get wider!!! as long as you have those who strive to better themselves, vs those who expect, and do nothing, the gap will widen!!! fortunately, lbj can’t see, that he’s losing the war on poverty!!! you want to shrink the gap, find some way to institute deflation!!!

  14. John Ley says:

    Gap is to a large extent: education and family unity. Black America is consistently at
    the bottom, but single mothers do not produce Rhode scholars, or business oriented
    citizens. Family support, education and unity vital to success of Mormons or Jewish Americans. NO poll ever includes wealth, family, education, Religion. Obama and government lumps them all together by income to bash or support laws based ONLY on income. How about a survey incorporating factors leading to the income differences. Let’s not talk about the one or two exceptions you know, talk about the bottom thirty or forty million citizens who are voting citizens.

  15. Troy Jones says:

    Mr. Morse has a point. It would be difficult to accumulate an average of $21,700 per year
    with pay of $16,000 ($8/Hr) per year. Some very lucky investments and a lot of OT maybe. Maybe he lived with parents and saved all of his earnings. If he saved $10k/yr…
    $10,000 the first year; $20,600 the second; $31,236;… It mounts up fast.

  16. Rich Carter says:

    I just want to be able to pay my bills and buy food. I want a safe place to sleep. These are basic things in life and they are getting harder and harder to achieve. I have worked twenty years in the machine trades. The real cost of living is the problem. Gas $3+ a gallon. Fruit and vegetables sold by weight and not the piece. Have you noticed that the stores saturate the product with misters? They inject 10% salt solution into our chickens and who knows what they do yo the other meats. This is the real reason why paychecks do not go so far..fix this trend in agriculture and you will feed america.

  17. k. marotta says:

    This would all be even more illuminating if we could know

    1. HOW the top fraction came suddenly to be almost the only paid or self-paid help in the country, and

    2. Why Americans don’t find the shifting of the country into a plutocracy [or the reversion of the country to the old plantation model of the US South, which we thought we had rejected at horrible cost in our harrowing Civil War] when it is no longer possible to elect a president UNLESS he is in the plutocrat pocket — indeed, s/he can’t even CAMPAIGN otherwise — is a matter of concern.

  18. Billd says:

    Good information from a good company.
    Keep it up & thanks.

  19. Andrea Ray Smith says:

    I listened to the commentary today on NPR on growing income inequality. I find it fascinating that no one will dare address how our lax immigration policies fuel this fire. When you keep allowing a free pass to impoverished Hispanics (and obviously other groups, not just Hispanics) who are marginally educated and don’t speak English to enter the country and cash in on our out of control welfare system you create education inequality, housing inequality, health inequality…it goes on and on. I saw this up close and personal while working for the YMCA in a neighborhood in Austin Texas for 4 years with the highest levels of poverty, diversity, crime, obesity, low test scores…the list goes on. Even with the City throwing millions at this neighborhood to lift people up and control crime, the area still is spiraling out of control. Yes, people should have opportunities for a better life, we’re a nation of immigrants, etc., etc., but at some point it comes down to simple math. You can’t keep letting in legions of immigrants that totally drain the welfare system and not expect these problems to persist. Other countries have tighter restrictions on immigration and the United States has become a laughingstock to the rest of the world. At what point are we FULL.

  20. ReidH says:

    How American’s can’t be shocked by the widening gap is beyond me, maybe as the divide is accelerating and pounding the middle class, people might pay attention. We live in a time when corporate profits are historically high and if you examine the P&L close enough, it boils down to increased productivity and cost containment measures. CEO’s obsess over the next quarter and shareholder equity. They press management for more profit and anymore that means taking from staff professionals and mid managers who are working longer hours, are getting fewer perks and earning the same or even less than they earned ten years ago. It seems everything is examined for cost reduction, right down to the TP in the mens. When obtuse profits trump even employee satisfaction, it’s a very sick place and time to live in. When does it stop? When the masses can no longer afford to shop at Wall Mart.

    • Paul Roden says:

      How much profit is enough for these corporations and the rich 1% really need? How much to sustain their businesses and their opulent lifestyle? How many more summer homes, yachts, fancy cars and bling do they really need? They just seem to want more and more tax cuts, tax loop holes, tax incentives, reduction in regulations, and tax codes that enable them to hide wealth off shore or cook their books, so they get a rebate and pay no corporate or personal income tax. Where is their “compassionate conservatism”? Where are they going to fly in and out of in the United States airports in their private jets if the runways, control towers, and air traffic control systems are in need of repair and upgrades? On what roads, tunnels, bridges and super highways are they going to drive or ride around in their fancy cars and stretch limos? What type of water do they want to drink, if it is all contaminated with fracking and radioactive wastes? What air are they going to breath? All they seem to care about are themselves. The environment, the middleclass, the poor, the public commons, and public good be damned. The 1% are only in it for themselves. They are greedy and shortsighted.

  21. John leary says:

    As the saying goes, “lies, damn lies and then there’s statistics”. With no disrespect to Professor Saez, are there any other (even partly qualified) researchers who have different measures that could be used to depict “income inequality in the USA” ? Are there any dissenters, even those who would re-phrase the question because the answer tells nothing about the quality of life in the USA that is derived from “money.”
    The reason that I ask the above is that it occurs to me that there are very many (more?) Americans in 2012 whose quality of life does not depend on “income” as one might have measured it in 1920 or even 1960. Are IRS based payments to low income folks, food stamps, welfare payments of all kinds, services for the poor, lost-income by military service members (some of whom are paid at the poverty level), and a host of other factors, like unemployment benefits, considered in Prof Saez analysis of “income?”
    Then there is the “low gross – high net” phenomena: I make much less than many of my peers, but I live well, because I spend much much less, and do not “need” jewelry, vacations, memberships in golf, tennis and swimming clubs, etc. Does my income measure my quality of life as an American, or somehow provide a “hurt index” for my lifestyle. I think not, and I believe that there are many like me.
    Lastly, while I hate to admit it, I have “broken” many of the ten commandments, but I respect them all. The tenth is one that, to date at least, I have managed to keep. Is even the Pope encouraging “coveting thy neighbor’s goods” when he decries “income inequality”, or does this phrase somehow not address “thy neighbor’s goods?”

    • Ronald King says:

      I admire you not coveting other people’s things; however, what do you do if the person coveting what little you have has so much? All those things you mentioned require someone to pay for them. Currently, they are not paid for. I do not wish to take an entitlement program. I want to have the right to at least survive if not to live.

      Inflation is an increasing problem as the wealthy have the right to take my wealth legally. I do not have that right to take theirs.

  22. RD Bhatia says:

    True it is a big problem. In India, in good olden days, during the rule of Chandragupt Maurya’s rule, only one profession was allowed foe one person but now the conditions have changed. We cannot bring back those days. There was practically no technology those-days whereas these-days every thing is technology.

  23. Asif says:

    I agree with the above analysis, I don’t know the credibility of the research but I can feel the difference …… I believe that all the damage been done by the people within the US. The US debt GDP ratio is getting worse day by day….. people need to think about this serious issue.

  24. Juan Reynoso says:

    Bill Clinton’s “American Dream” was the Clinton initiative to fix the unemployment created by the free trade agenda. The National Homeownership Strategy, “The American Dream (“Strategy”), which was compiled in 1995 by Bill Clinton, Henry Cisneros, President Clinton’s HUD Secretary and Alan Greenspan, While the underlying initiatives of the [Strategy] were broad in content, the main theme was the relaxation of credit standards to create jobs. The Community Reinvestment Act (CRA) is also one of the causes of the 2007 recession; by the lenders relaxed lending standards in an effort to meet CRA commitments, between 1994 and 2007 their loan commitments were a massive $4.5 trillion. The one person most singly responsible for the housing bubble in the U.S. is Bill Clinton, but also to blame are the borrowers that could borrow even 99 percent of their house investments. The investment banks preferred sub-prime loans, as they earned high revenue due to high risk; poorer ratings yield higher interest rates. This massive credit flow drove demand in the housing sector, helping expand the bubble. Mortgage regulations were relaxed and there were huge profits in the financial sector; some stock prices tied to real estate and financial firms skyrocketed. The leverage ratio during the bubble also was very high, as banks borrowed heavily to give loans.
    http://reason.com/archives/2012/10/14/clintons-legacy-the-financial-and-housin http://nypost.com/2012/09/05/bubba-the-housing-bubble/

    • Michael says:

      No. The housing bubble, like the credit bubble, was created by the people who needed the funds to shore up a middle-class lifestyle that had been decimated by the “trickle-down economics” of Ronald Reagan. Wages flat-lined and labor unions were all but declared extinct. More of the cost of living was transferred to the pockets of the middle-class (greater health care costs, greater housing costs, higher education costs–all because the funds that had been generated by taxes that Reagan gave back were gone) When you stuff the pockets of a small segment of society in the mere hope that they will share the wealth and call this sound economic policy you’re tipping your lunacy hand early. What differed in the hump years of 1950-1980 was that nominal tax rates on the rich were much, much higher. Corporations could not pay execs exorbitant salaries in the form of stock options without consequence (as they can now) and legacy income was much smaller (estate taxes). We need to spend more money on education, more money on infrastructure, more money on social programs and less on corporate welfare (tax incentives). Put back the trade restrictions on foreign goods and replenish American jobs.

  25. Juan Reynoso says:

    1- Free trade – outsourcing- imports and the huge trade deficits. Since Ronald Reagan, Every president, worked like termites to destroy our jobs and the future of the American working class, no jobs, lower wages and the making of the U.S. Economic demise.
    http://economyincrisis.org/content/lack-jobs-due-our-massive-trade-deficit http://mercatus.org/features/how-us-debt-problem-magnifies-unemployment

  26. Sally Edelstein says:

    With income inequality becoming the defining issue in this country today, a look at the the stark division seen in vintage Depression era advertising seems oddly familiar.
    As banks were failing, home evictions seem oblivious to the crumbling economy around them rising, and breadlines at soup kitchens lengthening, winter meant only one thing to those with deep pockets- a winter vacation as ads for winter cruises, ski vacations ran along side ads for budget saving meals.
    While rampant unemployment and poverty became more and more common the wealthy lived in a world that remained insular arrogant and out of touch. Sound familiar? Take a look http://wp.me/p2qifI-23J

  27. John Pappas says:

    Mr. Burzillos the best!

  28. JT says:

    “A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both.” Milton Friedman

    Redistribution policies will certainly reduce income inequality. But why is inequality of income a problem in the first place? For many a politician (or writer), inequality is the fuel to generate mass popular appeal in their own pursuit of power. If the campaign to end inequality ignites your passion, you are the fuel.
    Reducing income inequality is not the same as improving the quality of living for the masses.
    A redistributive system slows innovation on quality of life improvments. Further, redistributive policies rely on the wisdom of the ‘redistributor.’ Freedom to choose those resources has been moved to the beaurocrat and politician.
    My dear country, it is not equality you yearn for. Your desire is freedom.

    • Tona Basile says:

      Milton also said this – “There is one and only one social responsibility of business — to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” -Milton Friedman, New York Times Magazine, September 1970
      A problem that societies find, as the U.S. has, is that they are no longer staying within the rules of the game.

  29. Some of these stats run counter to others presented on this very website:
    “65% of Americans say the gap between the rich and everyone else has widened in the past decade, according to a new Pew Research Center survey; a similar percentage (67%) recently told Gallup they were dissatisfied with the way income and wealth are distributed in the U.S. In the Pew Research survey, nearly seven-in-ten Americans said the government should do “a lot” (43%) or “some” (26%) to reduce the gap. For more on inequality (especially the impact on the middle class), see these key data points.”


    ‘State of the Union 2014: Where Americans stand on key issues’

  30. vivek kharwar says:

    us economy always good!!

  31. DSM says:

    Is the income gap caused by corporations making more shrewd business decisions, or is it caused by the bribery of politicians so that laws create an unequal advantage for certain entities? Companies trying to save money and be more efficient is good for the economy. Companies influencing laws to their advantage and reducing free competition is bad for the economy. While an increase in the income gap is not necessarily a bad thing if everyone is better off than they were previously (need to look at living standards, not just income), if the income gap is caused by bribery then we need to BLAME the politicians. Ironically, looking to politicians to fix the problem would be the worst course of action.

    • Pamela says:

      So you think that being thrown into poverty despite working hard and growing profits is good?

      And this is not a Democracy. My family and I are not represented by our senators or house.

      The minute the SCOTUS decided that they would rule based on political lines, and all parties would lie to get a job, with benefits, no character and NO service to our country they lost.

      We no longer believe in the farce that is supposed to be democaratic.

      You tax without representation.

      Oh except for your “corperations” That buy votes to destroy our country.

      Power corrupts and absulute power corrupts absulutely.

      You love Reagan, then correct all of his mistakes, He was a movie star and had alzimeres.

      See you in wall street and the banks in court.

  32. j harding says:

    This info has been informative. There are a few really good documentaries about the financial collapse and how we got there. In the past, I have been as most Americans. I was truely ignorant as to the laws(or lack of laws) that the very wealthy have to abide when it regards income. I was also shocked(at first) to see how the US (citizens and gov) allowed the collapse to take place. It did not happen over a few years. It has been happening for the past 30 years. The middle and low class no longer have the protection of acts such as Glass/Steagal. This was implemented in the days of FDR after the crash of 29′ as a type of checks and balances to actualy help ALL Americans. The only current info I can gather today is that the supposed recovery act is acting for the wealthiest. Ask yourself this. Why are there laws or checks and balances? I think it is to keep honesty and do the right thing. Thankyou .

  33. Saphrona says:

    This information is scary since the Great Depression happened because the gap between rich and poor wasn’t much different than it is now. Does that mean we ARE headed for another horrible recession? Why aren’t we in one now? What makes the difference between 1929 statistics and now? I know that in order to even the playing feild between buyers and sellers, the government must step in. What I don’t get, is, why is the gap still so huge after the extreme measures taken by the government got us out of the 2008 recession?

  34. pbradford021 says:

    Couple of things that would make this post much more compelling:

    1) % of Federal income tax paid by these same groups.
    2) % of wealth created by these same groups.
    3) % of charitable donations made by each group

  35. Doug says:

    I have been trying to get our federal representation (all of whom are in the high class) to pass a bill creating and funding national employee Owned co ops. These would produce a product and be located in areas of great unemployment and under employment. They would take the place of all government subsidies but housing and medical help. People would be given a job that would pay the bills of their households. Using this system people would be given a job, not a hand out. When enough of these co ops are made,each producing selling and servicing a product, the United States will have a economy within an economy that is using idle and semi idle people to make and sell something. If a co op does not sell enough to offset its production costs, the government would make up the difference. Less expensive than all those defaulted college loans, training to b done BEFORE one gets a job/
    And, no one would have to worry about the business moving out of the country.
    Prisons could be made to make all the inmates could that the co ops could use in their business. Inmates at the prisons would work five days a week for 40 hours each week, just like the normal world would expect. This would cut the production costs of the co op. A person sent to jail would receive the best kind of “rehabilitation”-he or she would work and get used to the routine they should have been doing in the first place.
    I tried to get Mayor DeBlasio have people tend skyscraper gardens doing this. I guess he quickly dismissed the idea and let the state and federal government continue to hand out welfare money while people lay idle.Or they went to “training programs” that never led to a job.
    After a while the labor supply in our country would create a demand for labor as businesses would want to sell to all those people working in co ops. Wages would rise to attract labor. And the gap would begin to shrink as the wealthy would have to pay for labor higher wages from their profits. Supply and demand can be created by government action. But they refuse to consider this. There is so much more to say. But think how these co ops would help the country.

  36. Pierre Valladay says:

    What is the combined income of Black America. Why is this data not readily available.Thank you in advance for answering my questions.

  37. Mike Howard says:

    I really don’t know why most are not concerned about the income and wealth gap as it is caused by the number one reason for the low and slow economy. Corporations and the top 1 % are strangling the economy and don’t seem to understand that the FLOW of wealth is what gives them the chance to make more not the hoarding of it.
    Corporations should be hiring more to get more into the flow so that the economy CAN come back to vitality.

  38. be says:

    When stats are published on this kind of stuff I don’t think that there is any adjustment for locality. Why doesn’t anyone talk about the huge differences in cost depending on where you live? If you make 50K / year in NYC you are living in poverty, barely scraping by. If you make that amount in many Midwest communities you are living well. Because I live on the east coast, I need to make at least twice the money to live as well as someone in the middle of the country. Income taxes are not adjusted for locality either.

    • allgoo19 says:

      be says:
      “When stats are published on this kind of stuff I don’t think that there is any adjustment for locality. Why doesn’t anyone talk about the huge differences in cost depending on where you live?..”

      Are you kidding?
      How local difference matters when they are comparing the national average in different times?
      Local differences weren’t the same, say between 1929 an 2008?

  39. Emily Roof says:

    Its very simple. Take the money out of politics completely. Vote for people you know and trust personally and ignore the candidates the machine offers. If we can get a sufficient percent of the population to to this we can stack the system with ordinary folks, or at very least force the 1% to spread the money and therefore the power around much more freely in an effort to co-opt everybody.
    Then again, Im at the very bottom and only in the past few years, with the help of things like “Obamacare” achieved even the barest essentials of life and I firmly believe that any society as abundant as ours is wholly vile if it allows homelessness, hunger and suffering. No kidding, I met refugees in Paris who lived better under canal bridges than people I met living outside.

    • Joshua Feyereisen says:

      With as much as people like to Ruminate about our nations security both literal and morale. They sure remain oblivious to the largest threat to American prosperity and longevity, we have ever experienced. A threat which those of us who are studied in world history know very well, has destroyed one great empire after another.

      My 7 year old nephew needs an adult to remind him about excess and moderation. If my brother and I do our jobs right every day will get a little bit better, some day he will be himself an adult and will provide this guidance to others and so on.

      People who’s life has become consumed by greed, become capable men and women whom lack basic moderation or regard for humanity Traits necessary to prevent themselves from harming themselves, harming others through their self centered actions or destroying the balance of the very system they have exploited.

      This is the legacy of Reaganomics and the revenge of the banking nerds. Ultimate and absolute revenge after years of “Perceived Suffering” at the ruthless hands of Keynesian economics. Oppression by the big meanie face “average citizens” whom all demanded and enjoyed a living wage and fair markets. They demanded this while these bankers had to “suffer” the reality that they could only become “Super Rich”, instead of the current norm of “Absolutely Pointless Ridiculous Rich”. So rich that their kids would be pissing the other 99% of us off with how they carelessly flaunted how much money they could throw away in order to gain Twitter followers.

  40. Joshua Feyereisen says:

    I think it would be in everyone’s best interest to explain in a little more detail how this gap effects people in a direct way.

    So like most people in America, I am a good hard working person who has a proven ability to adapt to frequent changes in the workplace, at home and in the country. I was denied financial assistance to go to college after high school so I never did go to college. For a long time this was not an issue, I was able to make tactical decisions and move around from job to job, until I found one who respected my talents enough to pay me well enough to live a meager but hopeful existence. Like so many other people, when the recession of 2007 hit. Everything I had managed to acquire in life was wiped out. I lost my job and spent 3 years moving between one desperate short term job after another. I was in for a rude awakening when I came back into the same field I had previously worked in and found a steady job. The pay had been reduced from 17-21$ an hour down to 12.33 – 14.33 an hour. I worked at this job for two years, they used the yearly review thing and a strategic delay on hiring me from the temp agency, to cheat me out of my first years raise. Another year passed and I soon found out how shallow their promise to reward hard work and dedication was. Despite having volunteered for every weekend of overtime, developed entire new systems using metrics to revolutionize our departments tracking and accountability. I received a 10 Cent raise, as a reward for an exceeds expectation review. My female supervisor told me she was ashamed to even show me how much my raise was. Apparently our shareholders demand that their personal profits continue to grow forever, despite that being an impossible bill in any Capitalist economy. Eventually the CEO gets to a point of new sales stagnation that leaves him very few options, other than taking it out directly on the employees. Of course they attack the least valuable employees first. Production workers, warehouse associates and Customer Service Representatives all see their salaries and raises raped while CEO’s as well as their buddies in sales whom they golf and attend exclusive cocktail parties with, all retain their increasing prosperity. The company I worked for those two years, embodied the absolute worse of what American business had become. They had ruthless outsourcing models that were being put into effect over time, low wages and absolutely no hope for any sort of advancement ever, no matter how talented you were. I thank God I got laid off from that job, 4 months later I applied for a job I had no business applying for from an experience standpoint. Not only did I get the job and absolutely thrive and grow over the next 3 years. I gave the company a $ amount that they were going to pay me or else I would not join the team and they broke policy and gave me exactly what I asked for. As time went on and I thrived there, we were bought by a similar management company as my previous employer. While my wage was never reduced, they never even risked trying since I was the sole process writer/engineer and had become our head of Quality Control’s right hand man. I watched a ton of the most vulnerable people get victimized yet again and it really hurt my heart. Even I got to feel the effects of the new management, my first raise had been over a dollar an hour and they did not even owe me a raise, they offered it to me unprovoked when they hired me on from the contract service I started through. Next raise I saw, came after the new management company had just restructured the whole Performance Review program. I watched everyone get fucked over a one month period, even our most valuable employees like our FAA Certified Repair Station Technicians with FAA Repairmen Cards. I decided it was time to part ways with this company, I was doing the work that would be considered “Process Engineering” and was being paid a little to poorly for this. I also knew it would only be a matter of time before the disparity in my wage as opposed to everyone else in my department would attract a crosshair from the new management. I left that company when it enjoyed a nearly unprecedented level of profit and filled a small niche that had little to no competition. Now I am unemployed and taking my time trying to find an acceptable job making a living wage. The rent prices anywhere in a 50 mile vicinity of Seattle are absolutely ridiculous, very few people I know are living on their own. Working or not, college graduate or not most are living with their parents in their late 20’s and mortified about their future prospects. If you have balls of steel, maybe your willing to take on 65k in student loan debt, if you do that though you better get an engineering degree and you better complete it in one fell swoop. If not those profiteering bankers will fuck you hard and real dominant like. Since the student loan banks called in their billions worth of favors, they now know they have the distinct privilege of being one of the only private industries in the US that can fuck you hard like the IRS can when you owe them money. If you happen to default on your loan, 15k in additional charges will rack up quickly and that is just what the big banks use to lubricate you, the real business comes next. These private financiers do not just send you to normal collections like any other private entity has to settle for. These banksters paid for influence to do more, they have the ability to garnish 30% your wages, which they will exercise 100% of the time. How dare you think you will get away with failing to pay your monthly 1000$ student loan debt payment. They will garnish your fucking wages at 30% and that will merely cover the cost of interest, if even that. You will watch your paychecks being garnished, without the ballance ever going down. I really hope your one of those blowhards who golfs with the CEO while getting drunk as shit. If not your in for one hell of a time making enough to pay back your student loans.

    I could go on for days, this country is a polished piece of garbage. We have the highest rates of childhood starvation of any civilized nation. We let these heartless savages from the GOP guilt us into letting them cut our social programs. Then they turn around and use the fucking proceeds to fund payouts and bribes to big industries, these Welfare payouts that are seeded somewhere in almost every bill, are referred to as Earmarks as not to betray their true nature to the public. They use their big cable conglomerates as influence and they hyper promote topics that divide us and nothing else. This is an age old tactic used by those in various Ruling Classes to keep their opposition too weak to oppose them, its called divide and conquer. If we are too busy fighting about retarded shit that does not mean a thing, things like womens reproductive rights. That means we are not focused on or fighting with the people that really pose a threat to this nations existence. Greed is a fucking disease, it dominates those who are afflicted with it and they become mindless, heartless drones who long ago lost the ability to relate with humanity or the human condition. They are nothing but legal mobsters, treasonous animals guilty of crimes against humanity and depravity against morality.

    I separa

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