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WORD COUNT
619
OCTOBER 26, 2005
INEQUALITY IN
AMERICA: VERSION 2.0 – by Chuck Collins and Felice Yeskel
Fall is inequality
season. Every autumn, as the leaves change color, we get a vivid new
picture of the trends that pull us apart as a country.
This year is no
different. But after almost three decades of incrementally widening
disparities of wealth and income, it’s worth noting that we’ve entered a
new version of economic apartheid, American-style. Let’s call it
Inequality 2.0.
The United States is
now the third most unequal industrialized society after Russia and
Mexico. This is not a club of which we want to be a member. Russia is a
recovering kleptocracy, with a post-Soviet oligarchy enriched by
looting. And Mexico, despite joining the rich-nations club of the
Organization for Economic and Community Development, has some of the
most glaring poverty in the hemisphere.
In 2004, after three
years of economic recovery, the U.S. Census reports that poverty here
continues to grow, while the real median income for fulltime workers has
declined. Just since 2001, when our economy hit bottom, the ranks of our
nation’s poor have grown by 4 million, and the number of people without
health insurance has swelled by 10 percent to over 45 million.
Income inequality is
now near all-time highs, with over 50 percent of 2004 total income going
to the top fifth of households, and the biggest gains going to the top 5
percent and 1 percent. The average CEO now takes home a paycheck 431
times that of their average worker.
At the pinnacle of
U.S. wealth, 2004 saw a dramatic increase in the number of billionaires.
According to “Forbes” magazine, there are now 374 of them. This growth
in billionaires took a dramatic leap since the early 1980s, when the
average net worth of the individuals on the Forbes 400 list was $400
million. Today, the average net worth is $2.8 billion. Wal-Mart’s Walton
family now has 771,287 times more than the median U.S. household.
Does inequality
matter? One problem is that concentrations of wealth and power pose a
danger to our democratic system. The corruption of politics by big money
might explain why for the last five years the president and Congress
have been more interested in repealing the federal estate tax, paid only
by multi-millionaires, than in reinforcing levees along the Gulf Coast.
Now, to pay for
hurricane reconstruction and the war in Iraq, Congress is considering
cuts in programs that help poor people, such as Medicaid and Food
Stamps. They have not yet considered fairer ways of reducing the deficit
like reversing special tax breaks for the rich, such as the recent cuts
in capital gains and dividend taxes.
And inequality is
non-partisan. The pace of inequality has grown steadily over three
decades, under both Republican and Democratic administrations and
Congresses. The Gini index, the global measure of inequality, grew as
quickly under President Bill Clinton as it has under President George W.
Bush. Widening disparities in the United States are the result of three
decades of bipartisan public policies that have tilted the rules of the
economy to the benefit of major corporations and large asset owners at
the expense of people whose security comes largely from a paycheck.
Public policies in
trade, taxes, wages and social spending can make a difference in
mitigating national and global trends toward prolonged inequality. But
our priorities are moving us in the wrong direction.
For example, the
failure to raise the minimum wage from its 1997 level of $5.15 an hour
guarantees continued income stagnation for the working poor for years to
come. The president and Congress’ focus on tax cuts for the wealthy and
their disinterest in government spending to expand equal opportunity
sets the stage for Inequality Version 3.0.
We shouldn’t tolerate
this drift toward an economic apartheid society.
--
Chuck Collins and
Felice Yeskel are co-authors of the new book, “Economic Apartheid in
America: A Primer on Economic Inequality and Insecurity” (The New
Press). Yeskel is co-director of Class Action (www.classism.org).
Collins is senior fellow at United for a Fair Economy (www.faireconomy.org).
United for a Fair Economy is a Boston-based national, independent,
nonpartisan organization that puts a spotlight on the dangers of growing
income, wage and wealth inequality in the United States and coordinates
action to reduce the gap. A photo of Chuck Collins is available
CLICK HERE
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