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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: info@accountability-central.com

 

 

Introduction: November 2011

 

 


Latest on The Risk of Wealth and Income Gaps

January 22, 2014 Pope urges Davos elite to serve humanity with wealth

Source: Reuters

Pope Francis challenged business leaders assembled in Davos on Tuesday to put their wealth at the service of humanity instead of leaving most of the world's population in poverty and insecurity.

January 21, 2014 Davos debates income inequality but still invites tax avoiders

Source: The Guardian

Those on the outside might imagine that the business leaders who gather in Davos each year to chew the fat are concerned only about enriching themselves. Critics might imagine that the company bosses, jetting to the World...

January 20, 2014 World's 85 richest own 46% of global wealth

Source: USA Today

Research conducted by the British charity Oxfam has concluded that the combined wealth of the world's 85 richest people is equivalent to that owned by the bottom half — in wealth terms —of the world's population.

January 16, 2014 Gulf between rich and poor put as biggest global risk

Hindustan Times - The growing gulf between the rich and the poor represents the biggest global risk this year, the World Economic Forum declared on Thursday ahead of this month's Davos summit. The institution issued the gloomy...

January 14, 2014 U.S. wealth gap grew during recession, Stanford report finds

Source: LA Times

Poorer Americans suffered bigger blows than richer ones as the housing market fizzled during the Great Recession, causing wealth inequality to surge for the first time since the 1980s, a new report finds. During the recession,...

January 13, 2014 The Vicious Circle of Income Inequality

Source: NY Times

Almost every culture has some variation on the saying, “rags to rags in three generations.” Whether it’s “clogs to clogs” or “rice paddy to rice paddy,” the message is essentially the same: Starting with nothing, the first...

January 6, 2014 Income inequality: Does wider gap between rich and poor threaten capitalism?

Source: Christian Science Monitor

Since mid-2009, some 95 percent of all US income gains have gone to the top 1 percent. Now, even powerful financiers are alarmed by the increased income inequality between rich and poor.

January 3, 2014 The Widening Wealth Gap: Bringing Income Inequality Into Focus - audio

Source: NPR

The widening gap between the rich and poor in the U.S. has become a central touch point for economists, pundits and politicians across the U.S. New York City's newly sworn-in mayor, Bill deBlasio, was elected after campaigning...

January 2, 2014 New Year Outlook: 'The Rich Will Keeping Getting Richer'

Moneynews (blog) - The richest people on the planet got even richer in 2013, adding $524 billion to their collective net worth, according to the Bloomberg Billionaires Index, a daily ranking of the worldâs 300 wealthiest...

December 19, 2013 Poll: Wealth gap, minimum wage top issues for Americans

Source: Allvoices.com

Americans want more government intervention when it comes to addressing the wealth gap and minimum wage, according to a new Washington Post-ABC News poll. In the December survey, 57 percent said the federal government should take...

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The Risk of Wealth and Income Gaps

 
 
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  • RT @WSJecon: Upper-income families now have a median wealth nearly 70 times that of lower-income families http://t.co/r10yN2ZmKR http://t.c… 09:05
    Julianne D.
  • The secret to earning income and building wealth. http://t.co/NFNfU9CsPE 09:05
  • The secret to earning income and building wealth. http://t.co/dqfVX5tEFb 09:05
  • Wealth gap between upper and middle income households at record high http://t.co/xQjYbsb3br #wealth http://t.co/TL4b75wzdm 09:05
  • Wealth gap between upper and middle income households at record high http://t.co/u91kVyijHF #wealth http://t.co/qtARjqVJ3O 09:05
 
 
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