Americans are experiencing the largest gaps in wealth and income inequality since the robber barons of the late 19th and early 20th centuries were carving out monopolies like Parker Brothers and their avarice culminated in the Great Depression.
This is not an election issue in 2014. And this is unlikely to become a serious election issue any time soon, or until the bottom falls out again. And a recent study shows many Americans are unaware of how massive the gap really is and how it impacts all our lives all the time.
In the long-game, a rigged system is hurling more of us into poverty more rapidly than we’ve seen in generations. We are passing down a lower standard of living while the country is richer than ever. Only foundational change will alter that course.
Once upon a time not that long ago we had a thriving middle class because we invested in it. American Capitalism has now again been hijacked into a crude exercise in Bugs Bunny accounting—one for me, one for you; one, two for me, two for you; one, two, three for me; three for you.
As David Sirota writes, a recent report from Harvard and Chulalongkorn universities found that Americans vastly underestimated the size of the gap between CEO and average worker pay, putting it at 30-1 instead of anywhere near the reality of 350-1 on average.
The top end in America goes as high as 1,795-1. The trophy goes to J.C. Penny’s Ronald Johnson, who earns $53.3 million per year compared to his average employee’s $29,688.
Sirota cites a Washington Post report that internal Democratic Party polling “found that talking about income inequality does not register strongly with the American public and risks accusations of class warfare.”
Mark Twain said, “It’s easier to fool people than to convince them they have been fooled.”
The stats and studies are staggering, and also unfortunately don’t seem to make a lasting impression, at least in part because the news spotlight moves very rapidly and superficially, so the issue of inequality, as a national conversation, only pops up every so often. But the consequences of it are always on display.
The world’s 85 richest individuals have as much wealth as the poorest 3.5 billion individuals.
The top 1 percent is 65x richer than the poorest half of the world.
The United States is far worse than most of the rest of the developed world, with the second-highest level of inequality next to Chili.
Top 1 percent incomes grew by 31.4 percent while bottom 99 percent incomes grew only by 0.4 percent between 2009 and 2012. There goes the ‘recovery.’
A report last summer from the National Poverty Center (NPC) revealed that “the number of people in the US living on less than $2 a day per person, termed ‘extreme poverty,’ increased by 160 percent from 1996 to mid-2011, rising from 636,000 households to some 1.65 million households.”
Between 2007 and 2010 the median American family lost a generation of wealth, putting them on a par with where they were in 1992.
American workers continue to make gains in productivity but American companies continue to reap the benefits and are not sharing. For instance, last year corporate profits, as a share of the economy, were the highest since the second world war. Worker wages continued to stagnate.
More than that, while wages have stagnated for the average worker for 40 years, costs have shot up. Health insurance contributions increased 90 percent over the past decade and over the past five years tuition costs have leapt 27 percent at state universities and 13 percent at private institutions above inflation.
And while income inequality is bad, with the highest-earning fifth of the U.S. population pulling in 59.1 percent of all income, wealth inequality is worse, with the richest fifth holding 88.9 percent of all wealth.
But, as it’s been said, it’s only “class warfare” when the working class strikes back.
Imagine five people getting together to make a homemade pizza. Two people provide the money to buy the ingredients, one a bit more than the other. The third person goes to the store to purchase the ingredients. The last two people put the 10-slice pizza together, bake it and serve it.
Nice meal right? Only for one of them.
The way the American pizza pie is presently divided, the person who provided the most money would get nine slices of pizza. The next person would get all but the crust of the remaining slice. The third person would get all of the crust except for a modest bite. The fourth person would get a bite’s worth of pizza crust and the last person would get a crumb.
So the last two people—who kneaded the dough, applied the sauce, sprinkled the cheese, laid out the ingredients, pre-heated the oven, set the timer, then baked and sliced the pie—are accused of “class warfare” for asking for more than a bite, more than a crumb.
One’s mind turns to little orphan Oliver, empty bowl outstretched to Mr. Bumble, “Please sir, I want some more?”
“MORE?!?… Catch him, snatch him! Hold him, scold him! Pounce him, trounce him! Pick him up and bounce him!”
David DeWitt is a journalist and universal minister based out of Athens, Ohio. He can be found on Twitter @TheRevDeWitt.