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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
February 23, 2015 Most Americans Say the Rich Aren’t Taxed EnoughSource: Time
Tax season is here and more than two-thirds of Americans think the wealthy pay too little in federal dues, according to a new poll. What’s more, six in 10 say the middle class pays too much.
February 23, 2015 It’s Morning, Again, in America...Source: Larry Checco
To hear many politicians, pundits and financial analysts tell it, it’s morning again in America. The stock market is at record highs. Corporations are sitting on trillions of dollars in cash (Apple, alone, has US $178 billion in...
February 20, 2015 Obama’s Economic Report Focuses on Income InequalitySource: NY Times
WASHINGTON — President Obama on Thursday stepped up his efforts to define which economic problems need urgent attention — and what kind of attention would work — if not under his administration, then the next.
February 5, 2015 Are We Past the Point of No Return When It Comes to Inequality'
The Huffington Post - When the world's leading economic policy makers, academics, and businesspeople met in Davos, Switzerland for the îWorld Economic Forumî, they did not substantively address policies that would...
Source: The Guardian
The release of the Productivity Commission’s issues papers into the workplace relations framework is set to reignite the industrial relations (IR) debate. And given the minimum wage looks to be in the commissions’ firing line,...
January 27, 2015 Middle Class Shrinks Further as More Fall Out Instead of Climbing UpSource: NY Times
The middle class that President Obama identified in his State of the Union speech last week as the foundation of the American economy has been shrinking for almost half a century.
January 26, 2015 With Great Wealth Comes Great ResponsibilitySource: Forbes
According to the research, nearly 70 percent of ultra-wealthy inheritors will become more involved in evaluating the impact and results of giving. Half will become more directly involved in improving the effectiveness of...
January 19, 2015 Why extreme inequality hurts the rich
m.bbc.co.uk - And what is striking is the growing realisation - even by the extreme privileged, who are about to fly in their private jets to Davos to save the world from itself, at the annual gathering of the îWorld...
January 19, 2015 Richest 1% to own more than rest of world, Oxfam saysSource: BBC News
The wealthiest 1% will soon own more than the rest of the world's population, according to a study by anti-poverty charity Oxfam.
January 16, 2015 Do the wealthy pay lower taxes than the middle class?Source: CNBC
A new study finding an "unfair," rich-poor balance in state and local taxes has been getting big traction on the Web this week.
The Risk of Wealth and Income Gaps
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