It's generally understood that we live in a time of growing income inequality, but "the ordinary person is not really aware of how big it is," Krugman told me. During the late 1980s and the late 1990s, the United States experienced two unprecedentedly long periods of sustained economic growth—the "seven fat years" and the " long boom." Yet from 1980 to 2005, more than 80 percent of total increase in Americans' income went to the top 1 percent. Economic growth was more sluggish in the aughts, but the decade saw productivity increase by about 20 percent. Yet virtually none of the increase translated into wage growth at middle and lower incomes, an outcome that left many economists scratching their heads.
Remember "trickle down" economics? This is "pouring up."
Why don't Americans pay more attention to growing income disparity? One reason may be our enduring belief in social mobility. Economic inequality is less troubling if you live in a country where any child, no matter how humble his or her origins, can grow up to be president.
We're told that all we have to do is pull ourselves up by our bootstraps and anyone can succeed. Unfortunately, the game is increasingly rigged against those who weren't smart enough to pick wealthy parents.
This is disturbing:
All my life I've heard Latin America described as a failed society (or collection of failed societies) because of its grotesque maldistribution of wealth. Peasants in rags beg for food outside the high walls of opulent villas, and so on. But according to the Central Intelligence Agency (whose patriotism I hesitate to question), income distribution in the United States is more unequal than in Guyana, Nicaragua, and Venezuela, and roughly on par with Uruguay, Argentina, and Ecuador. Income inequality is actually declining in Latin America even as it continues to increase in the United States. Economically speaking, the richest nation on earth is starting to resemble a banana republic.
The whole article is worth reading. It's part 2 of an ongoing series - one that seems to be worth following.
cross posted at MainSt/workingamerica.org
How interesting considering just yesterday I was discussing income and social disparity with someone. Our conversation noted some of the most glaring examples in our nation, that being most prominently the chasm that has grown between rich and poor with the disappearance of true middle class. Unfortunately, not having been born with a brain like Bill Gates or Martha Stewart, individuals such as myself cannot pull oneselves up by the bootstraps. We also commented on the fact that in the late 1980's $10 an hr. was the going rate for many jobs - and it still is today. Cost of living etc. as we all know has not kept up with inflation and other negative economic factors. Just this weekend I was told that ten couples have moved out of the valley. All held jobs at Settlers Green and other retail establishments. I don't have first hand information on this, but it may very well be a cold hard winter in our valley for many folk.
ReplyDeleteGood point. The wage scale hasn't changed here, but the cost of everything else certainly has.
ReplyDeleteI don't believe we're seeing a "recovery" at all. I think the worst is yet to come. As a member of the "long term unemployed" at my age, I have to wonder if I'll ever have another job, or how I'll manage to hang on until I can collect Social Security, assuming the Democrats don't screw it up.