Thursday, September 12, 2013

Income Disparity In America-- Through The Roof... Worse Than Ever... Or Anywhere


You probably don't remember the Roaring Twenties. Conservative Republicans, corruption beyond anything ever seen in America and a haughty empowered plutocracy ruled America with an iron first. And brought on the Great Depression. FDR helped rebalance the American equation. A series of corporate-oriented presidents-- surrounded by a corporate-sponsored ruling elite-- has chipped away at almost everything FDR accomplished-- and they're working full speed to get whatever is left. Reagan, the Bushs, Clinton, Obama have all been dreadful presidents, among the worst in history. Perhaps you missed Paul Wiseman's report for the AP.
The gulf between the richest 1 percent and the rest of America is the widest it's been since the Roaring '20s.

The very wealthiest Americans earned more than 19 percent of the country's household income last year-- their biggest share since 1928, the year before the stock market crash. And the top 10 percent captured a record 48.2 percent of total earnings last year.

U.S. income inequality has been growing for almost three decades. And it grew again last year, according to an analysis of Internal Revenue Service figures dating to 1913 by economists at the University of California, Berkeley, the Paris School of Economics and Oxford University.

One of them, Berkeley's Emmanuel Saez, said the incomes of the richest Americans surged last year in part because they cashed in stock holdings to avoid higher capital gains taxes that took effect in January.

In 2012, the incomes of the top 1 percent rose nearly 20 percent compared with a 1 percent increase for the remaining 99 percent.

...The gap between rich and poor narrowed after World War II as unions negotiated better pay and benefits and as the government enacted a minimum wage and other policies to help the poor and middle class.

The top 1 percent's share of income bottomed out at 7.7 percent in 1973 and has risen steadily since the early 1980s, according to the analysis.

Economists point to several reasons for widening income inequality. In some industries, U.S. workers now compete with low-wage labor in China and other developing countries. Clerical and call-center jobs have been outsourced to countries such as India and the Philippines.

Increasingly, technology is replacing workers in performing routine tasks. And union power has dwindled. The percentage of American workers represented by unions has dropped from 23.3 percent in 1983 to 12.5 percent last year, according to the Labor Department.

The changes have reduced costs for many employers. That is one reason corporate profits hit a record this year as a share of U.S. economic output, even though economic growth is sluggish and unemployment remains at a high 7.2 percent.

America's top earners tend to be highly paid executives or entrepreneurs-- the "working rich"-- instead of elites who enjoy lives of leisure on inherited wealth, Saez wrote in a report that accompanied the new analysis.

Still, he added: "We need to decide as a society whether this increase in income inequality is efficient and acceptable."
Republican ideology is based on more than it being acceptable; it's what they strive for in everything they say and do-- like kicking more people off food stamps, one of their current contributions to the American political dialogue. Tomorrow Boehner and Cantor will pass a proposal which will reduce SNAP funding by $40 billion over the next decade and make somewhere between 4 and 6 million Americans ineligible for full food stamp benefits.
Current federal law says that able-bodied adults without dependents (ABAWDs) are only eligible for year-round SNAP benefits if they are either employed or enrolled in an eligible workfare or job training program. Those ABAWDs who do not meet the requirement are only eligible for three months’ worth of food stamps every three years. Yet the federal government often waives this requirement and allows ABAWDs to receive full benefits regardless of their employment status, because very few states actually operate the programs they would be required to enter. The current Republican proposal would eliminate these federal waivers-- causing as many as 4 million people to lose full eligibility--and prohibit states from relaxing some of the federal government’s other eligibility rules, as most of them currently do.

The proposed changes are “shocking,” according to Margarette Purvis, president and CEO of Food Bank For New York City, one of America’s largest food banks. “In New York City alone, if these cuts go through, we are talking about in a single year having 76 million meals be gone,” said Purvis. “[That] is more than what we distribute in a year.”

Traditionally, SNAP funding is reauthorized as part of every farm bill, a type of omnibus legislation passed by Congress every five years or so. In June, the House voted down a farm bill which would have cut food stamps by $20.5 billion over the next decade; Democrats uniformly opposed the cuts, saying they were too harsh, while some Republicans voted against the bill because they believed it was not harsh enough. In response, House leadership split the bill in two, turning SNAP funding into a separate piece of legislation. The new, consolidated food stamp legislation, with its $19.5 billion in additional cuts, appears designed to woo back conservative defectors, so the Republican majority can pass the bill on a strict party-line vote. If the House does approve those cuts, they could be folded back into the farm bill during conference committee.

“Say the Senate farm bill contains $4 billion in SNAP cuts and the House farm bill that went down contains $20 billion, so now you’re trying to conference something between $4 billion and $20 billion,” said a spokesperson for Rep. Jim McGovern, D-Mass., in July. “But what happens if the House Republicans bring a $40 billion cut? Now you’re conferencing between $4 billion and $40 billion, which is a lot worse.”

The Senate version of the farm bill does indeed include about $4 billion in cuts. But even if the Congress did not cut food stamps at all, funding is expected to automatically decrease by about $5 billion over the next year alone.

“Doing nothing is not an option, and these cuts are not an option,” said Purvis. Food banks, she said, cannot possibly compensate for the damage done.
But the rich, as yesterday's NY Times pointed out, are doing better than ever-- a lot better than ever. They look at more of that worked, cited above, by Emmanuel Saez.
The top 10 percent of earners took more than half of the country’s total income in 2012, the highest level recorded since the government began collecting the relevant data a century ago, according to an updated study by the prominent economists Emmanuel Saez and Thomas Piketty.

The top 1 percent took more than one-fifth of the income earned by Americans, one of the highest levels on record since 1913, when the government instituted an income tax.

The figures underscore that even after the recession the country remains in a new Gilded Age, with income as concentrated as it was in the years that preceded the Depression of the 1930s, if not more so.

High stock prices, rising home values and surging corporate profits have buoyed the recovery-era incomes of the most affluent Americans, with the incomes of the rest still weighed down by high unemployment and stagnant wages for many blue- and white-collar workers.

“These results suggest the Great Recession has only depressed top income shares temporarily and will not undo any of the dramatic increase in top income shares that has taken place since the 1970s,” Mr. Saez, an economist at the University of California, Berkeley, wrote in his analysis of the data.

The income share of the top 1 percent of earners in 2012 returned to the same level as before both the Great Recession and the Great Depression: just above 20 percent, jumping to about 22.5 percent in 2012 from 19.7 percent in 2011.

That increase is probably in part due to one-time factors. Congress made a last-minute deal to avoid the expiration of all of the Bush-era tax cuts in January. That deal included a number of tax increases on wealthy Americans, including bumping up levies on investment income. Seeing the tax changes coming, many companies gave large dividends and investors cashed out.

But the economists noted that the trends looked the same for income figures including and excluding realized capital gains-- implying that the temporary tax moves were not the only reason the top 1 percent did so well relative to everyone else in 2012.

More generally, richer households have disproportionately benefited from the boom in the stock market during the recovery, with the Dow Jones industrial average more than doubling in value since it bottomed out early in 2009. About half of households hold stock, directly or through vehicles like pension accounts. But the richest 10 percent of households own about 90 percent of the stock, expanding both their net worth and their incomes when they cash out or receive dividends.

The economy remains depressed for most wage-earning families. With sustained, relatively high rates of unemployment, businesses are under no pressure to raise their employees’ incomes because both workers and employers know that many people without jobs would be willing to work for less. The share of Americans working or looking for work is at its lowest in 35 years.
It's up to Congress. They set tax policy, trade policy, fiscal and economic policy. If we keep electing presidents like Bush and Clinton, Members of Congress like Paul Ryan, Eric Cantor, Steny Hoyer and Steve Israel, we're doomed to just keep repeating this. Let's work to get Alan Grayson and Elizabeth Warren into bigger leadership positions. Listen to a senator who understands that... Bernie Sanders, being interupted and led into talking about her bullshit by a brain-dead propaganda reader on corporate TV:

Labels: , , ,


Post a Comment

<< Home