TODAY I PROPOSE TO ENTER THAT MUDDLED MATTER of the division of wealth in this glorious land of ours. I also note the differences in perceptions of the realities involved by political party. Lots of quoted words and a bushel of data illuminating some startling glimpses of our economy, particularly the state of our rich and poor: If the reality interests you, hang on and swamp on through!

A first chunk of those realities comes from CNN Money, “OECD warns U.S. on income inequality,” by Tami Lubby, June 27, 2012:

“The United States should aim to fix its income inequality problem by improving education for disadvantaged students and raising taxes on the wealthy, according to a new report from a consortium of developed countries.

“The report pointed out that the U.S. has among the highest income inequality and relative poverty among the 34 countries that make up the Organization for Economic Cooperation and Development.

“‘The U.S. education system is less effective than those of other countries in helping children realize their potential,’ the report said … ‘The United States is one of only three OECD countries that on average spend less on students from disadvantaged backgrounds than on other students.’ (Italics mine).

“‘Income inequality can be bad for health, education, innovation and economic well-being,’ the report noted, citing experts’ studies.”

Also, in what should for us be a wake up call, the report found that “the U.S. tax and benefits system is much less effective in reducing relative poverty than that of other OECD countries.”

Next, from “It’s the Inequality, Stupid” by Dave Gilson and Carolyn Perot, Mother Jones, March/April 2011, a tiny but startling summary.

“How Rich Are the Superrich?

“A huge share of the nation’s economic growth over the past 30 years has gone to the top one-hundredth of one percent, who now make an average of $27 million per household. The average income for the bottom 90 percent of us? $31,244.”
Consider that since this article was published, the disparity has been growing!

Next, from the Pew Research Center, “U.S. income inequality, on rise for decades, is now highest since 1928,” by Drew DeSilver, Dec. 5, 2013:

“One basic approach is to look at how much income flows to groups at different steps on the economic ladder.

“Emmanuel Saez, an economics professor at UC-Berkeley, has been doing just that for years. And according to his research, U.S. income inequality has been increasing steadily since the 1970s, and now has reached levels not seen since 1928.

“In 1928, the top 1 percent of families received 23.9 percent of all pretax income, while the bottom 90 percent received 50.7 percent. But the Depression and World War II dramatically reshaped the nation’s income distribution: By 1944 the top 1 percent’s share was down to 11.3 percent, while the bottom 90 percent were receiving 67.5 percent, levels that would remain more or less constant for the next three decades.

“But starting in the mid- to late 1970s, the uppermost tier’s income share began rising dramatically, while that of the bottom 90 percent started to fall. The top 1 percent took heavy hits from the dot-com crash and the Great Recession but recovered fairly quickly: Saez’s preliminary estimates for 2012 (which will be updated next month) have that group receiving nearly 22.5 percent of all pretax income, while the bottom 90 percent’s share is below 50 percent for the first time ever (49.6 percent, to be precise). (Italics mine.)

“Americans aren’t unaware of these trends. More than half (61 percent) of Americans said the U.S. economic system favors the wealthy, while just 35 percent said it’s fair to most people, according to a Pew Research Center survey conducted in March. A similar share (66 percent) of Americans said the gap between rich and poor had increased in the past five years; nearly three-quarters of respondents said the rich-poor gap was either a ‘very big’ (47 percent) or ‘moderately big’ (27 percent) problem.”

From The Huffington Post, “The U.S. Is Even More Unequal Than You Realized,” by Maxwell Strachan, May 1, 2014:

“When it comes to income inequality, no other developed economy does it quite like the U.S.A.” Here Strachan shows an OECD chart of data from the World Top Incomes Database, which illustrates “how income gains between 1975 and 2007 were divvied up in 18 OECD countries for which the researchers had data. Nowhere did the rich benefit as much as in America … (I)n some countries like Denmark the vast majority of income gains went to the bottom 90 percent — SOCIALISTS! — while nearly half of U.S. income gains went to the richest one percent, because freedom, baby!

“America’s top 1 percent of earners accounted for 47 percent of all pre-tax income growth over that time period. And that’s excluding capital gains, for God’s sake. Throw in the rest of the top 10 percent, and you’re looking at a group that got four-fifths of all income growth between the Ford and George W. Bush administrations. The rest of us were left to scramble for the last one-fifth of extra income. If you add in capital gains, which typically accrue to the highest earners anyway, the picture is probably a lot worse.

“That trend had a big impact on total income share: Between 1981 and 2012, the top 1 percent more than doubled their share of total pre-tax income. They now account for about 20 percent of the nation’s earnings. That’s more than any other OECD country for which we have data …

“But for truly shocking numbers, consider America’s even more-exclusive 0.1-percent club. Those super-duper rich people — we’re talking Warren Buffett rich — saw their share of the income pot jump all the way to 8 percent in 2010 from just 2 percent in 1980. The super-duper rich swoop up smaller percentages in countries like Canada, the United Kingdom and Australia.

“The super-rich getting super-richer would all be well and good, except that it doesn’t appear the nation’s ‘wealth creators’ are creating much wealth for anyone else. According to the OECD’s report, the pre-tax, inflation-adjusted incomes of the bottom 99 percent have only grown by an average of 0.6 percent per year in recent decades. Add in the top one percent, and the country’s income growth rate jumps to 1 percent.

“This lack of trickle-down prosperity is a key focus of ‘Capital in the Twenty-first Century,’ the new manifesto by French economist Thomas Piketty that destroys the argument for supply-side economics.”

Finally, I draw upon the piece “Americans See Growing Gap Between Rich and Poor,” by Bruce Drake, Dec. 5, 2013:

“The issue of income inequality is back in the news at a time when the U.S. public believes there is a growing gulf between rich and poor that is likely to continue, according to recent Pew Research Center surveys.

“A substantial majority of Americans (65 percent) said in a July 2012 Pew Research survey that they believed the income gap between the rich and poor had widened over the last decade. Just 20 percent said it had stayed the same and 7 percent said it was smaller. Most of those (57 percent) who believed the gap had grown said it was a bad thing for society.

“The public sees this gap as an ongoing fact of life. A separate survey conducted in April 2012 found that Americans agreed by a 76-percent to 23-percent margin with the statement that ‘today it’s really true that the rich just get richer while the poor get poorer.’ That gap had grown since August 2002 when the margin was 65 percent to 33 percent, but the size of it was not much different than it was in 1987.

“Despite widespread perceptions of economic inequality, there was little indication that it had fueled class resentment. Nearly nine in 10 (88 percent) said they admired ‘people who get rich by working hard.’

“What do Americans think of the rich? Views are mixed: Americans view the well-to-do as more intelligent and more hardworking but also greedier, our survey this summer found.

“About four in 10 (43 percent) said the rich were more likely than the average person to be intelligent (with 50 percent saying there was no difference or expressing no opinion) and 42 percent said they were more likely to be hardworking, compared with 24 percent who said less likely and 34 percent seeing no difference or offering no opinion.

“More than half (55 percent) saw the rich as more likely to be greedy compared with 9 percent who said less likely, and 36 percent who took neither side.

“Republicans were more likely to describe the rich as hardworking, by a 55 percent to 33 percent margin. About two-thirds (65 percent) of Democrats saw the rich as greedy compared to 42 percent of Republicans.

“There are sharp ideological divides in both those findings. Democrats said by a 61-percent to 24-percent margin that circumstances beyond one person’s control were primarily to blame for them being poor. Republicans took the opposite view: 57 percent blamed individuals who were poor for lack of effort compared with 28 percent who said it was due to circumstances beyond their control. (Italics mine.)

“On the question of being able to earn enough money on the job, 89 percent of liberal Democrats and 78 percent of moderate and conservative Democrats said poor people work but do not earn enough money. But only about half (53 percent) of moderate and liberal Republicans agreed. Conservative Republicans were evenly divided: 43 percent said the poor do in fact work but cannot earn enough while 40 percent said most poor people do not work.” (!)

Ah, yes. Those lazy, welfare-swilling vagrants, living high off the likes of us! It’s enough to make a hardworking business executive cry for the sheer injustice of it all!

Jerome Page is a Benicia resident.