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The Risk of Wealth and Income Gaps
The American Income and Wealth Gap
The issues and events represented in the broadening public discussions about “wealth and income disparities” or the “wealth divide” or the “1% and the 99%” are certainly top-of-mind for many people as we created this Hot Topic in October 2011. These are certainly not new issues, but for many Americans the Great Recession is intensifying some of the troubling aspects of income inequality and certainly the obvious wealth inequality in the USA today.
The essence of the American Dream has been about the assurance of equal access to quality education, the enjoyment of a good income (“living wages”), access to affordable healthcare, and the means to acquire a home of one’s own.
These have been the traditional pathways to building personal and family wealth at least since years of the Great Depression. In the “Era of Prosperity,” after World War II, the American middle class emerged in great numbers. Thanks to equal access to credit and capital, steadily increasing wage levels for workers, and reasonably-priced housing and durable goods, attaining higher levels of education, among other things, each generation could expect to be better off than the previous. Until now. What most Americans believed to be “financial fairness” for a rising middle class has been fading away since the financial sector crisis of 2008-2009, if not in reality, than in the perceptions of many people.
In contrast, the 1947 to 1975 years, as author Robert Reich points out in his book, “Aftershock,” was an era when the benefits of economic growth were more broadly shared. But since 1975, the economic gains have been steadily concentrated in the upper income and wealth regions of the US economy, and the middle-class and lower income earners have been missing out on the dividends paid by (among other things) the end of the Cold War and the onset of globalization that followed.
Unemployment is stuck at the 9% level; and, many Americans are under-employed, working two jobs, or out of work for so long that they have given up on finding a job. Which leads to more financial stress on millions of families.
As the former Secretary of Labor writes, “None of us can thrive in a nation divided between small number of people receiving an ever larger share of the nation’s income and wealth and everyone else receiving a declining share…” We agree.
Real opportunity and access – and not that portrayed today by certain pandering politicos – has been slipping away for millions of Americans. The Capitol Hill rhetoric does not square with the facts on the ground -- the statistics and facts and consumer surveys paint a different picture, first in the facts, and more recently, in the perceptions held by many Americans.
Not About Wealth Re-Distribution
This reality of diminishing economic returns is not about income or wealth re-distribution, or pursuing socialist or left-leaning political ideologies or policies, or schemes to tax the rich. This is about both the reality and perception of financial fairness and equity, and equal access to economic opportunity, which many middle-class and low-to-moderate income earners now believe is no longer the American Dream for them. This is a potentially dangerous social condition and one that our policymakers – or the fortunate affluent and wealthy -- should not ignore.
As this introduction is prepared, the Occupy Wall Street protests are in their third month, with hundreds of other cities and communities seeing demonstrations on their main streets. The protests so far have been peaceful and civil if not raucous at times.
The movement has spread to other countries. Earlier in 2011, citizen protests were staged in the Middle East – in the Arab Spring, young and old protested against repressive government policies and the lack of economic opportunity for the masses in Tunisia, Libya, Egypt, Bahrain, and Syria. A major part of the complaints: lack of jobs, and lack of or unequal opportunity in terms of income and wealth-building, as well as the desire for more democratic rule.
There is now abundant news & commentary about the income and wealth divide in the United States, as well as a growing gap between rich and poor in many other countries. We are bringing you the highlights of this issue in this Hot Topic, because we believe that everyone should be tuned in to this critical social issue, which threatens the well-being of the nation, and individuals in all socio-economic categories. The solutions are not easy, or simple, or something government can prescribe. All Americans have to address the issues – and some of us will have to give a little to get back on track.
We cannot afford to lose the Millennial Generation (born 1975-2000) – the young people who seek the opportunities that their parents and grandparents enjoyed.
The editors have been focused on the issues surrounding the income and wealth divide for some time – this Hot Topic is being added to Accountability Central as the issues continue to gain momentum. We will be offering commentary in a running series, “The Divide – Danger Ahead.”
We welcome your comments – send to: firstname.lastname@example.org
Introduction: November 2011
Latest on The Risk of Wealth and Income Gaps
November 18, 2014 Extreme Wealth Is Bad for Everyone—Especially the WealthySource: New Republic
When I was fourteen I met a man with a talent for restoring a sense of fairness to a society with vast and growing inequalities in wealth. His name was Jack Kenney and he’d created a tennis camp, called Tamarack, in the mountains...
November 12, 2014 Silent Generation Wins Life Lottery as Richest U.S. Age GroupSource: Bloomberg
The median net worth for the oldest Americans has climbed to near the top compared with other age groups from near the bottom just two decades ago, based on the Federal Reserve’s Survey of Consumer Finances. This shift in buying...
October 30, 2014 Small tax on billionaire boom could slow rising inequality - OxfamSource: Reuters
A small tax on billionaires, whose number has doubled in recent years, would raise enough to ensure an education for every child in the world and slow the rise in inequality, a report published on Wednesday said
October 29, 2014 The rich also worry about the wealth gapSource: CBS News
Two-thirds of millionaires are concerned about the level of economic inequality in America, according to a survey from PNC Wealth Management. The issue has increasingly set off alarm bells among economists and many in the middle...
October 24, 2014 Income Inequality Got You Down? Do Something About It!Source: Huff Post
The wealthy continue to see significant income and wealth gains while the majority of people are experiencing stagnant living standards. Income inequality is one of the most significant financial stories right now, and there's no...
October 23, 2014 The Fed’s (Not So) New Role: Champion of the Working ClassSource: The Fiscal Times
Last week, Federal Reserve Chair Janet Yellen publicly picked up the income inequality banner that President Obama’s administration has largely dropped in the face of multiple global crises, including the situation in Ukraine,...
October 1, 2014 Education spending by affluent is widening wealth gapSource: SF Gate
Wealthier parents have been stepping up education spending so aggressively that they’re widening the nation’s wealth gap. When the Great Recession struck in late 2007 and squeezed most family budgets, the top 10 percent of...
September 30, 2014 Forbes: World’s biggest billionaires have more billions than ever beforeSource: Washington Post
The price of entry to The Forbes 400 this year is $1.55 billion, the highest it’s been since Forbes started tracking American wealth in 1982. Last year it took $1.3 billion to score a spot. Because the bar is so high, 113 U.S....
September 24, 2014 Age, not gender, leads new income gap
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September 19, 2014 Yellen says poor Americans live in ‘sobering’ conditionsSource: MarketWatch
WASHINGTON— The condition of lower-income families in America is “sobering” even as the economy recovers, Federal Reserve Chairwoman Janet Yellen said Thursday. “We have come far from the worst moments of the crisis and the...
The Risk of Wealth and Income Gaps
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