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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: email@example.com
Introduction: November 2011
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The Risk of Wealth and Income Gaps
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