Income Inequality News ArticlesExcerpts of Key Income Inequality News Articles in Media
The top 1% of Americans are finally recovering from the great recession. A new analysis of IRS data revealed that the average income of the top 1% of income earners grew by 7.7% in 2015, reaching $1.36m. Report author Emmanuel Saez, an economics professor at the University of California-Berkeley ... revealed that in 2015, the rich were also taking home larger chunk of the US income. “The share of income going to the top 10% of income earners – those making on average about $300,000 a year – increased to 50.5% in 2015 from 50.0% in 2014, the highest ever except for 2012,” Saez wrote. It should not come as a shock that to many Americans talk of economic recovery rings hollow. The top 1% of families saw their income grow by 37% between 2009 to 2015, from $990,000 to $1.36m. The incomes of the other 99%, however, grew by just 7.6% during that time – from $45,300 in 2009 to $48,800 in 2015. In 2015, the income of the 99% grew by just 3.9%. After factoring in inflation, Saez calls it: “the best real income growth in 17 years”. And the rich? At 7.7%, their growth was twice that. Economy remains a top concern for US voters, according to a recent Gallup survey of 1,530 adults. The gap between rich and poor is bigger now than it’s been just about any time since the 1920s.
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Wealth inequality has grown to the stage where 62 of the world’s richest people own as much as the poorest half of humanity combined. The [new] research, conducted by the charity Oxfam, found that the wealth of the poorest half of the world’s population – 3.6 billion people – has fallen by 41 per cent, or a trillion US dollars, since 2010. While this group has become poorer, the wealth of the richest 62 people on the planet has increased by more than half a trillion dollars. The report, “An Economy for the 1%”, says the gap between the global richest and the global poorest has widened in just the last 12 months. In 2010, 388 people had the same wealth as the poorest half of humanity. In 2011, this fell to 177, [and] has continued to fall each year. Oxfam GB chief executive Mark Goldring said a crackdown on global tax havens was a necessary step towards ending the rampant global inequality. "World leaders’ concern about the escalating inequality crisis has so far not translated into concrete action to ensure that those at the bottom get their fair share of economic growth. We need to end the era of tax havens which has allowed rich individuals and multinational companies to avoid their responsibilities to society," [he said].
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In the past year, global wealth reversed a steady upward climb and fell by $12.4 trillion, largely due to currency fluctuations. But worldwide wealth inequality continued its upward march: The top 1 percent of households “account for half of all assets in the world,” according to the 2015 Credit Suisse Global Wealth Report. That’s a first since the Swiss bank began compiling the data in 2000, and a level “possibly not seen for almost a century,” the researchers write. For those on the other end of the wealth spectrum, meanwhile, the numbers are reversed. The poorest half of the world’s population owns just 1 percent of its assets. Financial assets have seen a 6 percent rise in the share of total wealth since 2008, benefiting the wealthy, who hold a disproportionate amount of capital. The overall rise in global wealth continued to be driven in large part by China and the emerging markets, which have doubled their aggregate wealth since 2000. China, whose wealth has grown fivefold since the beginning of the century, was shaken by market turmoil in the middle of the year but still managed to add $1.5 trillion in wealth. In 2015, a household net worth of $759,000 will put you in the ranks of the global one-percenters. The cutoff for the top 10 percent stood at $68,800.
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Despite an explosion in technology and a huge increase in worker productivity, the middle class continues its 40-year decline. Today, millions of Americans are working longer hours for lower wages and median family income is almost $5,000 less than it was in 1999. Meanwhile, the wealthiest people and the largest corporations are doing phenomenally well. Today, 99 percent of all new income is going to the top 1 percent, while the top one-tenth of 1 percent own almost as much wealth as the bottom 90 percent. In the last two years, the wealthiest 14 people in this country increased their wealth by $157 billion ... more than is owned by the bottom 130 million Americans. Large corporations and their lobbyists have created loopholes enabling corporations to avoid an estimated $100 billion a year in taxes by shifting profits to ... offshore tax havens. US companies are buying back billions of dollars of their own stock in a way that manipulates stock prices, hurts the economy and, by the way, used to be against the law. Instead of putting resources into innovative ways to build their businesses or hire new employees, corporations are pumping their record-breaking profits into buying back their own stock and increasing dividends to benefit their executives and wealthy shareholders. It is a major reason why CEOs are now making nearly 300 times what the typical worker makes. We ... must do a lot more to rebuild the middle class, check corporate greed, and make our economy work again for working families. It is time to say loudly and clearly that corporate greed and the war against the American middle class must end.
Note: The above article was written by 2016 presidential candidate Bernie Sanders. For more along these lines, see concise summaries of deeply revealing news articles on income inequality from reliable major media sources.
The middle class can't be saved unless Wall Street is tamed. Yet most presidential aspirants don't want to talk about taming the Street because Wall Street is one of their largest sources of campaign money. Six years ago ... the financial collapse crippled the middle class and poor, consuming the savings of millions of average Americans and causing 23 million to lose their jobs, 9.3 million to lose their health insurance and some 1 million to lose their homes. A repeat performance is not unlikely. Wall Street's biggest banks are much larger now than they were then. Five of them hold about 45 percent of America's banking assets. In 2000, they held 25 percent. Meanwhile, the Street's lobbyists have gotten Congress to repeal a provision of Dodd-Frank curbing excessive speculation by the big banks. The language was drafted by Citigroup and personally pushed by Jamie Dimon, CEO of JPMorgan Chase. It's nice that presidential aspirants are talking about rebuilding America's middle class. But to be credible, the candidates have to [propose] to limit the size of the biggest Wall Street banks, to resurrect the Glass-Steagall Act (which used to separate investment banking from commercial banking), to define insider trading the way most other countries do (using information any reasonable person would know is unavailable to most investors), and to close the revolving door between the Street and the U.S. Treasury. It also means not depending on the Street to finance their campaigns.
Recent data from the Luxembourg Income Study Database [is] shocking. While median per capita income in the United States has stagnated since 2000, it's up significantly in Canada and Northern Europe. Their typical worker's income is now higher than ours, and their disposable income -- after taxes -- higher still. Most of them get free health care and subsidized child care. And if they lose their jobs, they get far more generous unemployment benefits than we do. (In fact, right now, 75 percent of jobless Americans lack any unemployment benefits.) If you think we make up for it by working less and getting paid more on an hourly basis, think again. There, at least three weeks paid vacation is the norm, along with paid sick leave and paid parental leave. We're working an average of 4.6 percent more hours more than the typical Canadian worker, 21 percent more than the typical French worker, and a whopping 28 percent more than your typical German worker. But at least Americans are more satisfied, aren't we? Not really. According to opinion surveys and interviews, Canadians and Northern Europeans are. They also live longer, their rate of infant mortality is lower, and women in those countries are far less likely to die as result of complications in pregnancy or childbirth. But at least we're the land of more equal opportunity, right? Wrong. Their poor kids have a better chance of getting ahead. While 42 percent of American kids born into poor families remain poor through their adult lives, only 30 percent of Britain's poor kids remain impoverished -- and even smaller percentages in other rich countries.
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Eighty-five people control the same amount of wealth as half the world's population. That is 85 people compared with 3.5 billion. A new report from Oxfam has been published in time for the World Economic Forum in Davos this week. It shows the world's ultra-wealthy have not only recovered from the global financial crisis, they have positively blossomed. The report shows the wealth of the 1 per cent richest people in the world is worth about $US110 trillion, 65 times the total wealth of the bottom half of the world's population. It also shows the world's richest 85 people control about $US1.7 trillion in wealth, equivalent to the bottom half of the world's population. And far from hindering the wealthy, the political response to the global financial crisis - including the actions of central banks and the austerity measures introduced by national governments - has made the rich fabulously richer. In the US, the wealthiest 1 per cent of the population grabbed 95 per cent of post-financial crisis growth between 2009 and 2012, while the bottom 90 per cent became poorer. An Oxfam survey of six countries - the United States, UK, Spain, Brazil, India and South Africa - has found that the majority of people believe laws and regulations are skewed in favour of the rich, so people are noticing.
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It’s well known by now that income and wealth inequality in most rich countries, especially the United States, have soared in recent decades and, tragically, worsened even more since the Great Recession. But what about the rest of the world? New research by a World Bank economist named Branko Milanovic, along with other scholars, points the way to some answers. Overall equality across humanity, considered as individuals, has improved very little. So while nations in Asia, the Middle East and Latin America, as a whole, might be catching up with the West, the poor everywhere are left behind, even in places like China where they’ve benefited somewhat from rising living standards. From 1988 to 2008, Mr. Milanovic found, people in the world’s top 1 percent saw their incomes increase by 60 percent, while those in the bottom 5 percent had no change in their income. And while median incomes have greatly improved in recent decades, there are still enormous imbalances: 8 percent of humanity takes home 50 percent of global income; the top 1 percent alone takes home 15 percent. The United States provides a particularly grim example for the world. And because, in so many ways, America often “leads the world,” if others follow America’s example, it does not portend well for the future. Last year, the top 1 percent of Americans took home 22 percent of the nation’s income; the top 0.1 percent, 11 percent. Ninety-five percent of all income gains since 2009 have gone to the top 1 percent.
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The world's super-rich have taken advantage of lax tax rules to siphon off at least $21 trillion, and possibly as much as $32tn, from their home countries and hide it abroad – a sum larger than the entire American economy. James Henry, a former chief economist at consultancy McKinsey and an expert on tax havens, has conducted groundbreaking new research for the Tax Justice Network campaign group – sifting through data from the Bank for International Settlements (BIS), the International Monetary Fund (IMF) and private sector analysts to construct an alarming picture that shows capital flooding out of countries across the world and disappearing into the cracks in the financial system. "This offshore economy is large enough to have a major impact on estimates of inequality of wealth and income; on estimates of national income and debt ratios; and – most importantly – to have very significant negative impacts on the domestic tax bases of 'source' countries," Henry says. John Christensen of the Tax Justice Network [commented] "Inequality is much, much worse than official statistics show, but politicians are still relying on trickle-down to transfer wealth to poorer people. This new data shows the exact opposite has happened: for three decades extraordinary wealth has been cascading into the offshore accounts of a tiny number of super-rich." In total, 10 million individuals around the world hold assets offshore, according to Henry's analysis; but almost half of the minimum estimate of $21tn – $9.8tn – is owned by just 92,000 people.
The income of the richest 1 percent in the U.S. soared 275 percent from 1979 to 2007, but the bottom 20 percent grew by just 18 percent, new government data shows. The Congressional Budget Office (CBO) released a study this week that compared real after-tax household income between 1979 and 2007, which were both after recessions and had similar overall economic activity. While the income of the richest 1 percent nearly tripled, increases were smaller down the economic ladder. After the 1 percent, income for the next highest 20 percent grew by 65 percent, much faster than it did for the remaining 80 percent of the population but still lagging well behind the top percentile. The changes illustrate how the better off have captured the bulk of income gains over the past three decades. The top quintile has seen its share of income rise while the other four quintiles have suffered declines in their shares, according to John Bowler, director of country risk service with the Economist Intelligence Unit. The role of globalization, he added, is "controversial." "Even some policymakers who would traditionally be in the free trade camp are now questioning the benefits of globalization to the middle and lower-income U.S. households, even if they have benefited from cheaper imported manufactured goods," he said.
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The 400 highest-earning U.S. households reported an average of $345 million in income in 2007, up 31 percent from a year earlier, IRS statistics show. The average tax rate for the households fell to the lowest in almost 20 years. The figures for 2007, the last year of an economic expansion, show that the average income reported by the top 400 earners more than doubled from $131.1 million in 2001. That year, Congress adopted tax cuts urged by then-President George W. Bush that Democrats say disproportionately benefit the wealthy. Each household in the top 400 of earners paid an average tax rate of 16.6 percent, the lowest since the agency began tracking the data in 1992. The statistics underscore “two long-term trends: that income at the very top has exploded and their taxes have been cut dramatically,” said Chuck Marr, director of federal tax policy at the Center on Budget and Policy Priorities, a Washington-based research group that supports increasing taxes on high-income individuals. The top 400 earners received a total $138 billion in 2007, up from $105.3 billion a year earlier. On an inflation-adjusted basis, their average income grew almost fivefold since 1992.
The richest 1% of adults in the world own 40% of the planet's wealth, according to the largest study yet of wealth distribution. The report also finds that those in financial services and the internet sectors predominate among the super rich. Europe, the US and some Asia Pacific nations account for most of the extremely wealthy. More than a third live in the US. Japan accounts for 27% of the total, the UK for 6% and France for 5%. The global study - from the World Institute for Development Economics Research of the United Nations - is the first to chart wealth distribution in every country as opposed to just income, for which more comprehensive date is available. It included all the most significant components of household wealth, including financial assets and debts, land, buildings and other tangible property. Together these total $125 trillion globally. The report found the richest 10% of adults accounted for 85% of the world total of global assets. Half the world's adult population, however, owned barely 1% of global wealth. "These levels of inequality are grotesque," said Duncan Green, head of research at Oxfam. "It is impossible to justify such vast wealth when 800 million people go to bed hungry every night."
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The richest 2 percent of adults still own more than half of the world's household wealth, perpetuating a yawning global gap between rich and poor, according to research published Tuesday. The report from the Helsinki-based World Institute for Development Economics Research shows that in 2000 the richest 1 percent of adults - most of whom live in Europe or the United States - owned 40 percent of global assets. The richest 10 percent of adults accounted for 85 percent of assets. By contrast, the bottom 50 percent of the world's adult population owned barely 1 percent of the world's wealth. "Income inequality has been rising for the past 20 to 25 years, and we think that is true for inequality in the distribution of wealth," said James Davies, a professor of economics at the University of Western Ontario, one of the report's authors. But ... there are some hopeful signs: China and India, which are developing rapidly, are gaining wealth, and in countries such as Bangladesh, the spread of microcredit institutions is helping people increase their personal wealth.
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About five decades ago, the core values that make America great began to bring America down. The First Amendment became a tool for the wealthy to put a thumb on the scales of democracy. America’s rightly celebrated dedication to due process was used as an instrument to block government from enforcing job-safety rules ... and otherwise protecting the unprotected. Election reforms ... wound up undercutting democracy. Ingenious financial and legal engineering turned our economy ... into a casino with only a few big winners. Distinctly American ideas became the often unintended instruments for splitting the country into two classes: the protected and the unprotected. The protected overmatched, overran and paralyzed the government. The unprotected were left even further behind. Income inequality has soared: Middle-class wages have been nearly frozen for the last four decades, while earnings of the top 1% have nearly tripled. For adults in their 30s, the chance of earning more than their parents dropped to 50% from 90% just two generations earlier. Many of the most talented, driven Americans used what makes America great - the First Amendment, due process, financial and legal ingenuity, free markets and free trade, meritocracy, even democracy itself - to chase the American Dream. And they won it, for themselves. Then, in a way unprecedented in history, they were able to consolidate their winnings ... and pull up the ladder so more could not share in their success or challenge their primacy.
Iceland is the first country to make it illegal to pay men more than women. Equal pay policies is now mandatory for companies with 25 or more employees. Those that cannot show that they provide equal pay will be subject to fines. The law, which was passed last year, went into effect on Jan. 1. Iceland is already a leader in gender parity. The World Economic Forum (WEF) ranked Iceland as the top country for gender quality for the last nine years based on criteria involving economics, education, health, and politics. For example, Icelandic women make up 48% of the country’s parliament - without a quota system. Despite this, wage inequality has persisted. In 2016, thousands of women in Iceland left work at 2:38 p.m., to protest pay disparity. The time was symbolic of when woman stop receiving pay during their 9 to 5 work day compared to men. The wage gap in Iceland was 72 cents to every man’s dollar. On International Women’s Day in 2017, the country moved to change that. The tiny country, pop. 323,000, aims to completely eliminate the wage gap by 2020.
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Few people realize that the loans they take out to pay for their education could eventually derail their careers. But in 19 states, government agencies can seize state-issued professional licenses from residents who default on their educational debts. Another state, South Dakota, suspends driver’s licenses, making it nearly impossible for people to get to work. Firefighters, nurses, teachers, lawyers, massage therapists, barbers, psychologists and real estate brokers have all had their credentials suspended or revoked. Determining the number of people who have lost their licenses is impossible because many state agencies and licensing boards don’t track the information. Public records requests by The New York Times identified at least 8,700 cases in which licenses were taken away or put at risk of suspension in recent years, although that tally almost certainly understates the true number. With student debt levels soaring — the loans are now the largest source of household debt outside of mortgages — so are defaults. Lenders have always pursued delinquent borrowers: by filing lawsuits, garnishing their wages, putting liens on their property and seizing tax refunds. Blocking licenses is a more aggressive weapon, and states are using it on behalf of themselves and the federal government. Tennessee is one of the most aggressive states at revoking licenses. From 2012 to 2017, officials reported more than 5,400 people to professional licensing agencies. Many - nobody knows how many - lost their licenses. Some ... lost their careers.
Many Americans can’t remember anything other than an economy with skyrocketing inequality, in which living standards for most Americans are stagnating and the rich are pulling away. It feels inevitable. But it’s not. A well-known team of inequality researchers ... has been getting some attention recently for a chart it produced. It shows the change in income between 1980 and 2014 for every point on the distribution, and it neatly summarizes the recent soaring of inequality. The message is straightforward. Only a few decades ago, the middle class and the poor weren’t just receiving healthy raises. Their take-home pay was rising even more rapidly, in percentage terms, than the pay of the rich. The post-inflation, after-tax raises that were typical for the middle class during the pre-1980 period - about 2 percent a year - translate into rapid gains in living standards. At that rate, a household’s income almost doubles every 34 years. In recent decades, by contrast, only very affluent families ... have received such large raises. Yes, the upper-middle class has done better than the middle class or the poor, but the huge gaps are between the super-rich and everyone else. The basic problem is that most families used to receive something approaching their fair share of economic growth, and they don’t anymore.
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For the investors and market-movers at the annual World Economic Forum [in Davos, Switzerland], a threat lurks. At cocktail parties where the Champagne flows, financiers have expressed bewilderment over the rise of populist groups that are feeding a backlash against globalization. The world order has been upended. As the United States retreats from the promise of free trade, China is taking up the mantle. The stark shift leaves investors trying to assess the new risk and opportunities in the global economy. “This is the first time there is absolutely no consensus,” said William F. Browder ... who has been coming to Davos for 21 years. “Everyone is looking into the abyss.” The religion of the global elite - free trade and open markets - is under attack, and there has been a lot of hand-wringing, [but] little agreement on how to deal with it. The biggest concern? Finding a way to make the people who are driving populist movements feel like they are part of the global economic pie that Davos participants have created and largely own. Ian Bremmer, the president of Eurasia Group, a political-research firm, offered his advice: “Elites won’t be able to manage populism until they stop seeing it as a threat and start seeing it as a symptom.” If that is the case, Davos has, so far, made little progress. Jack Ma, the founder of Alibaba in China, offered his view of the problem in the United States. Americans, he said, “do not distribute the money properly.”
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Despite having one of the world's most advanced economies, the United States lags far behind other countries in its policies for expectant mothers. In addition to being the only highly competitive country where mothers are not guaranteed paid leave, it sits in stark contrast to countries such as Cuba and Mongolia that offer expectant mothers one year or more of paid leave. Countries finance paid-maternal-leave policies in a variety of ways. Some require that the employer finance the leave; in others, the money comes from public funds. For low-income residents or those who work in the informal sector, an increasing number of governments are providing maternity cash benefits, according to the International Labor Organization, a U.N.-affiliated agency. From Gambia to Bangladesh, a majority of low- and middle-income countries offer some form of paid leave to mothers. Because current U.S. policy doesn't mandate paid maternity leave, many women feel they have to choose between working and raising a family. This gender inequity undermines their prospects of equal opportunity at work — and, experts say, it disproportionately affects women from lower socioeconomic backgrounds. A 2012 study conducted by the Department of Labor found that, of the workers it polled, 23 percent of women who had left work to care for an infant took less than two weeks off, increasing health risks for both mothers and children.
A small core of super-rich individuals is responsible for the record sums cascading into the coffers of super PACs for the 2016 elections, a dynamic that harks back to the financing of presidential campaigns in the Gilded Age. Close to half the money - 41 percent - raised by the groups by the end of February came from just 50 mega-donors and their relatives, according to a Washington Post analysis. Donors this cycle have given more than $607 million to 2,300 super PACs, which can accept unlimited contributions from individuals and corporations. That means super PAC money is on track to surpass the $828 million that the Center for Responsive Politics found was raised by such groups for the 2012 elections. The top 50 contributors together donated $248 million personally and through their privately held companies, or more than $4 out of every $10 raised by all super PACs. The last time political wealth was so concentrated was in 1896, when corporations and banking moguls helped McKinley, the Republican candidate, outspend Democratic rival William Jennings Bryan. Populist anger over how presidential races were financed led to a 1907 ban on corporations donating to federal campaigns. Forty years later, Congress prohibited unions and corporations from making independent expenditures in federal races. The picture dramatically changed in 2010, when the Supreme Court said in Citizens United v. Federal Election Commission that corporations and unions could spend unlimited sums on politics.
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