and the poor get poorer.
Class tensions increase
According to this article today in the New York Times:
Conflict between rich and poor now eclipses racial strain and friction between immigrants and the native-born as the greatest source of tension in American society, according to a survey released Wednesday.
About two-thirds of Americans now believe there are “strong conflicts” between rich and poor in the United States, a survey by the Pew Research Center found, a sign that the message of income inequality brandished by the Occupy Wall Street movement and pressed by Democrats may be seeping into the national consciousness
This follows the release of hard data by the U.S Census Bureau last fall that shows a considerable rise in poverty, especially in comparison to the rapid growth in wealth of the highly paid.In 2010, 15.1% of Americans were below the poverty level, the highest level since the economic downturn of 1993. What is most disturbing is the racial makeup of these data. The poverty rate for African Americans stands at 27.4%, Native Americans at 28.3% and Hispanic Americans at 26.6%. It is even more disheartening knowing that now almost 7% of the population is living at less than 50% of the poverty level.
At the same time, the rich people in America are becoming much richer.
According to the Census Bureau, the lowest limit of income for the upper 5% of earners stood at $181k in 2010. This compares to a $105k lowest limit in 1993 – a 73% increase.
I guess this means The American Dream is still alive – If you can afford it.
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Update: January 12, 2012
Paul Krugman wrote a very interesting post today with this chart that shows that the rise in income inequality isn’t just between the rich and the poor, but rather between the very rich (1%) and everyone else:
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Comments
president obama's 3 years of work to cure the 6 month bush recession is a failure, and blacks are paying the biggest price?
wow - somebody should tell them
Let me ask a question; "If the average income for rich people had stayed at the 1993 level, and all that extra money had been paid out in salary increases to the working classes and people on social assistance, how much would the average income of the less well off have increased?"
The difference between the rich man's income and the poor man's income is totally irrelevant if "taking from the rich & giving to the poor" would substantially benefit the poor. If, on the other hand, it would only be a token amount of a few dollars, then the hostility towards the rich is unjustified and smacks of envy more than a genuine reason for outrage.
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That should read:
The difference between the rich man's income and the poor man's income is totally irrelevant if "taking from the rich & giving to the poor" would not substantially benefit the poor.
Until recently your words could have come out of my mouth. Then I got pointed in another direction.
Today, the super rich do not make their money in manufacturing - they make it in money/market/share-value manipulation. Invisible money. Electronic money. Money that does not represent anything of value but instead is only worth what anyone will pay for it.
The great industries are still around. They have built factories in countries where labour is dirt cheap. And they've discovered that there are HUGE markets for their products all around the world. Quite simply, for them, American labour is too costly and there is a larger - hugely larger - market 'out there'.
The stocks of companies are the markers used by the manipulators. Those stocks usually, unlike money, have some real value attached to them. They can be bid up, bid down, bid in circles. It's all part of the great game. What all this does to any one or two or dozen countries is unimportant to these players. They are men of no country. The venue they play in is the world.
It's a lot different world for them than it is for you and I. They have, or are, walking away from our world. They are playing a different game in a different house. All with money that has only a floating value. Should be fun for them when that house burns. But don't hold your breath waiting for that to happen. As you can see by how active and healthy Wall Street is, even though there has been no recovery for working America, you will begin to realize that the big boys are playing a much different game than they once played.
The workers no longer figure in their game. They aren't in it. They don't even exist to the big guys. Not my world at all anymore. (sigh)
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My question about whether the Workers/poor would be substantially better off if the "surplus wealth" of the top 5% were distributed among that poor class was a genuine question. I was NOT implying that they would not be. I simply do not know whether or not they would.
The reason I ask is this; if it would truly make a difference, then that is a worthwhile goal to try for. But, if it wouldn't make a real difference, other than to tear down the personal incomes of that 5% and force them to "walk a mile in our shoes" out of envy, then any goal of income levelling would NOT solve our problem which is the problem of too little income and too much out-go, and we'd be wise to seek a more realistic means of changing that situation.
I mean, when the problem is not enough income based on outgo, then one, or both, of two things would be desirable. Either prices come down or income goes up or both. If re-distributing the incomes of the people who are in the 5% will have a real effect that accomplishes a real solution, then let's, by all means, work toward doing that. But if it won't have that effect, then let's look at other ways of dealing with the problem and stop busting our balls trying to do something that just won't be of any help to us.
About my second comment:
We may be mixing apples and oranges here.
There is not just "the rich" out there. There are different levels of "rich".
Now, for the purposes of conversation let's designate anyone or any corporation or institution that is worth more than $10 billion as super rich; from $1 billion to $10 billion as very rich; from $100 million to $1 billion as rich, and from $10 million to $100 million as moderately rich. Those who have assets worth from $1 million to $10 million are merely comfortably well off and those with less than $1 million are average middle-class citizens.
This scale is not carved in stone, nor is it one that anyone has proposed as a 'working' model; it is just how I separate wealth levels in my mind. If you'd care to alter it or put up a scale of your own, I'd be happy to use yours.
Perhaps only a handful of people in this world can be classed as "super rich & very rich." There are, however, a great many huge financial institution and corporations that fit in this class of wealth. Ownership of those institutions/corps, (let's call them agencies,) is held by diverse individuals, often us, and other agencies through shares. I have no doubt whatsoever that if the earnings and wealth of these agencies were to be redistributed to all that fall into the working class and poor, it would make a substantial difference in their situation because these agencies hold more than 50% of the world's wealth.
In previous times wealth was firmly tied to some material thing. Be it gold or land or a manufacturing facility or whatever, money was firmly tied to it. These days the money is not. It 'floats' through the money markets. Its value is set by who will buy it for what price. At first glance this may seem to make it worthless - and by rights it IS worthless. Except money is also the means by which we pay for goods. This means that when the big money agencies manipulate money, they are ALSO manipulating the value of real goods AND the value of labour!
So long as "floating money" is considered to be the same as "real value money" the very rich and the super rich will continue to suck real value out of our economy while they play their own version of Monopoly through the stock and money markets of the world.
To compound the problem, in North America (and other places) corporations have had laws passed that REQUIRES them to make as much money as they can - as their FIRST priority - on behalf of their shareholders. Such a law might have made sense when individuals were the majority owners and they needed to be sure that management would do its best to make those shares worth what was paid for them and would provide a profit on investment. That is not still the situation.
These days the majority of shares of the majority of corporations are owned by agencies, which in turn are owned by other agencies, and so on. These agencies manipulate share values and money values so as to amass huge profits. It has become impossible for anyone to determine the 'real' value of the shares of any company. With shares sold on the stock markets for whatever they'll bring, they can be easily manipulated so as to appear very valuable when they are not; or vice versa.
All this jigger-pokery can be brought crashing down when and if the providers of real value - the ordinary investor/working class/lower management people, who actually create all real wealth - would, for a short period of time, just stop working as employees. With proper preparation this could quite easily be done. The share values of corporations would drop out of sight and all their money would be worthless - even amongst themselves. Worthless because when money won't buy labour - the originator of wealth - it is of no use to whomever has it.
But all of that would serve no purpose if, having done it, we just allow the same old bunch, or their clones, to again get control of our economic system.
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You've hit the nail on the head. The real issue here is that the middle class has essentially lost its potential for obtaining "The American Dream."
We are left to spend the rest of our lives on the eternal "treadmill" that you described.