Income Inequality News ArticlesExcerpts of key news articles on income inequality
U.S. stocks are hovering near a record high, a stunning comeback since March that underscores the new phase the economy has entered: The wealthy have mostly recovered. The bottom half remain far from it. Jobs are fully back for the highest wage earners, but fewer than half the jobs lost this spring have returned for those making less than $20 an hour. The pandemic is causing especially large gaps between rich and poor, and between White and minority households. It is also widening the gap between big and small businesses. Some of the largest companies, such as Nike and Best Buy, are enjoying their highest stock prices ever while many smaller businesses fight for survival. Some economists have started to call this a “K-shaped” recovery because of the diverging prospects for the rich and poor, and they say policy failures in Washington are exacerbating the problems. For many of the unemployed, the downturn is lasting far longer than they had anticipated. Nearly 80 percent of furloughed or laid-off workers thought they would be rehired, a Washington Post-Ipsos poll conducted April 27-May 4 found. Yet so far, only 42 percent of jobs have returned. “This has been a very clear K-shaped recovery,” says Peter Atwater ... at the College of William & Mary. “The biggest and wealthiest have been on a clear path toward recovery. Meanwhile, for most small businesses and those worst off, things have only become worse. The contrast is piercing: One group feels better than ever while the other borders on hopelessness.”
Amazon hasn't paid any taxes to the US government in the past two years. Actually, Amazon received hundreds of millions of dollars in federal tax credits in 2017 and 2018. That might seem nuts, considering Amazon is the third-most valuable company in the world and earned a record $10 billion last year. But critics of Amazon's tax bill aren't accusing Amazon of doing anything improper. "This is tax avoidance, not tax evasion. There's no indication of any wrongdoing, except on the part of Congress," said Matthew Gardner, senior fellow at the Institute on Taxation and Economic Policy. US tax code allows money-losing companies to reduce their future taxable income. Amazon's total earnings have easily topped its losses — many times over. But some of Amazon's earnings came from sales outside the United States, on which Amazon paid either lower or no US taxes. Many companies that lose money pay little or no federal income taxes. For example, General Motors (GM) has paid little federal tax money since emerging from bankruptcy in 2009, despite posting record profits for several years. Amazon declined to comment on its federal tax payments.
Note: Read how former tax lobbyists now run the tax-writing committees. For more along these lines, see concise summaries of deeply revealing news articles on corruption in government and in the corporate world.
Wealth concentration is at peak levels. That was the gist of a recent report published by the Institute for Policy Studies, a left-leaning think tank based in Washington, D.C.. Using data from Forbes’ annual ranking of the 400 richest Americans, the institute reached a number of conclusions regarding wealth disparities in the United States. Most dramatically, it found that the country’s three richest individuals - Bill Gates, Warren Buffett and Jeff Bezos - collectively hold more wealth than the bottom 50% of the domestic population, “a total of 160 million people or 63 million American households.” Roughly a fifth of Americans “have zero or negative net worth,” the authors wrote. Over the years, the cutoff for The Forbes 400 has risen dramatically. In 1982, the ranking’s inaugural year, the minimum net worth was $100 million. This year the barrier to entry hit an all-time high of $2 billion. In its report, the think tank also found that, collectively, the individuals on The Forbes 400 hold more wealth than the bottom 64% of the country, "more people than the populations of Mexico and Canada combined." Altogether, the list members were worth $2.7 trillion this year, a 59% increase over the last five years alone. The net worth of the median American family, meanwhile, has declined by about 3% on an inflation-adjusted basis since Forbes began publishing the 400 in the early 1980s, the institute says. It reports that the typical U.S. family is presently worth some $80,000.
Note: For more along these lines, see concise summaries of deeply revealing income inequality news articles from reliable major media sources.
Millions of Americans have lost jobs during a pandemic that kept restaurants, shops and public institutions closed for months and hit the travel industry hard. While lower-wage workers have borne much of the brunt, the crisis is wreaking a particular kind of havoc on the debt-laden middle class. Before the pandemic, Americans had amassed $4.2 trillion in consumer debt, excluding mortgages, according to the Federal Reserve Bank of New York, a record even when adjusting for inflation. Housing debt added an additional $10 trillion to the tally. The coronavirus has spared few industries and expanded unemployment benefits designed to replace the average American income didn’t cover all the lost pay of higher-earning workers, especially in or near expensive cities. The extra $600 weekly payments expired in July, putting them even further behind. Unemployment has fallen from its pandemic peak of near 15%, but the rate stood at 8.4% in August, up from 3.5% in February, according to the Bureau of Labor Statistics. Unemployment for the arts, design, media, sports and entertainment was 12.7% in August, more than triple its year-earlier level. In education, it more than doubled to 10.2%. Sales and office unemployment was 7.8% in August, up from 3.8% in August 2019. It could get worse. Many people who have jobs are struggling with pay cuts. As of August, 17 million workers were getting paid less due to the pandemic. Some 9.5 million took pay cuts; the remaining 7.5 million are working fewer hours.
Note: You can find the full article available for free viewing on this webpage. For more along these lines, see concise summaries of deeply revealing news articles on the coronavirus and income inequality from reliable major media sources.
The percentage of national income that is absorbed by health care has grown over the past half-century, from 5% in 1960 to 18% in 2017, reducing what is available for anything else from 95% in 1960 to 82% today. The costs of health care contribute to the long-term stagnation in wages; to fewer good jobs, especially for less educated workers; and to rising income inequality. American health care is the most expensive in the world, and yet American health is among the worst among rich countries. The U.S. has lower life expectancy than the other wealthy countries but vastly higher expenditures per person. In 2017, the Swiss lived 5.1 years longer than Americans but spent 30% less per person; other countries achieved a similar length of life for still fewer health dollars. How is it possible that Americans pay so much and get so little? The money is certainly going somewhere. What is waste to a patient is income to a provider. The industry is not very good at promoting health, but it excels at promoting wealth among health care providers. Employer-based coverage is a huge barrier to reform. So is the way that the health care industry is protected in Washington by its lobbyists—five for every member of Congress. Our government is complicit in an extortion that is an important contributor to income inequality. Through pharma companies that get rich by addicting people, and through excessive costs that lower wages and eliminate good jobs, the industry that is supposed to improve our health is undermining it.
Note: For more along these lines, see concise summaries of deeply revealing news articles on health from reliable major media sources.
$13,000,000,000. If all those 000s are making your eyes go funny, I'll spell it out: thirteen billion. That's how much Jeff Bezos added to his net worth in one day last July after the pandemic caused Amazon's stock price to surge. Bezos's $13bn (Ł10bn) payday set a record for the largest single-day increase in individual wealth ever recorded; however, he was far from the only billionaire getting that corona cash. According to a report by Oxfam, the combined wealth of the world's 10 richest men has increased by $540bn since March 2020. How much money is half a trillion dollars? Enough to vaccinate everyone in the world and ensure no one is pushed into poverty by the pandemic, Oxfam's report, The Inequality Virus, claims. Oxfam releases a report on inequality, timed to coincide with the Davos summit, every year. If there is one upside to the pandemic, it's that some ideas formerly dismissed as "radical" are now anything but. The idea of wealth taxes (levies on assets rather than income) is ... gaining global momentum. The British government has been urged to levy a one-off wealth tax on the value of household assets above Ł1m. Wealth taxes are also being pushed by progressive politicians in Germany and the US. A system in which 10 men can see their collective wealth increase by half a trillion during a global crisis can't be fixed with a one-off wealth tax – we need greed taxes that prevent people amassing that much in the first place.
The world's 2,153 billionaires have more wealth between them than a combined 4.6 billion people, new research has claimed. In a study published Monday, international charity Oxfam called on governments to implement policies that may help to reduce wealth inequality. The report comes as delegates gather in Davos, Switzerland, for the annual World Economic Forum conference. Oxfam's report noted that someone who saved $10,000 a day since the construction of the Egyptian pyramids would still be 80% less wealthy than the world's five richest billionaires. Oxfam urged policymakers to increase taxes on the world's wealthiest by 0.5% over the next decade in a bid to reduce wealth inequality. A 0.5% increase in taxes on the wealthy would generate enough funding to create 117 million jobs in sectors like education and health, according to the researchers. Other suggestions made by Oxfam to help mitigate inequality included investing in national care systems, challenging sexism, introducing laws to protect carers' rights, and ending extreme wealth. "Extreme wealth is a sign of a failing economic system," the report said. "Governments must take steps to radically reduce the gap between the rich and the rest of society and prioritize the wellbeing of all citizens over unsustainable growth and profit." The call for a tax overhaul reinforces the charity's message ahead of last year's WEF summit, when Oxfam urged governments to hike tax rates for corporations and society's richest to reduce wealth disparity.
Note: For more along these lines, see concise summaries of deeply revealing news articles on income inequality from reliable major media sources.
Amid a humanitarian crisis compounded by mass layoffs and collapsing economic activity, the last course our legislators should be following is the one they appear to be on right now: bailing out shareholders and executives who, while enriching themselves, spent the past decade pushing business corporations to the edge of insolvency. The $500bn dollars of public money that Congress’s relief bill provides will be used for a corporate bailout, with the only oversight in the hands of an independent council similar to the one used in the 2008 financial crisis. While that body was able to report misuses of taxpayer money, it could do nothing to stop them. As currently structured, there is nothing to keep this bailout from, like its predecessor, putting cash directly into the hands of those at the top rather than into the hands of workers. Without strong regulation and accountability, asking corporations to preserve jobs with these funds will be nothing more than a simple suggestion, leaving millions of everyday Americans in financial peril. If not properly managed, this economic disaster has the potential to be the worst in American history. Our country cannot allow a small number of executives and shareholders to profit from taxpayer funds that we have injected into these corporations for reasons of pure emergency. We need to stop this rot at the core of our economic system and realign the priorities of government with those of workers and consumers.
Some Democratic presidential candidates say that America’s economic system is badly broken and in need of sweeping, structural change. In its new Distributive Financial Accounts data series, the central bank offers a granular picture of how American capitalism has been distributing the gains of economic growth over the past three decades. Matt Bruenig of the People’s Policy Project took the Fed’s data and calculated how much the respective net worth of America’s top one percent and its bottom 50 percent has changed since 1989. He found that America’s superrich have grown about $21 trillion richer ... while those in the bottom half of the wealth distribution have grown $900 billion poorer. Notably, this measure of wealth includes liabilities. And it does not include consumer goods. But if one did include the Fed’s data on the distribution of consumer goods, the wealth gap between the top one percent and bottom 50 would actually be even larger. In 2011, Michael Norton of Harvard Business School and Dan Ariely of Duke University published a study on Americans’ views of how wealth was distributed in their society, and how they felt it should be distributed. They found that, in the average American’s ideal world, the richest 20 percent would own 32 percent of national wealth. In reality, the top quintile owned 84 percent as of 2011. And that share has grown in the intervening years. Today, the one percent alone commands roughly 40 percent of all America’s wealth.
Note: For more along these lines, see concise summaries of deeply revealing news articles on income inequality from reliable major media sources.
For 23 years, Larry Collins worked in a [toll] booth. But one day in mid-March, as confirmed cases of the coronavirus were skyrocketing, Collins’ supervisor called and told him not to come into work the next day. Collins’ job was disappearing, as were the jobs of around 185 other toll collectors at bridges in Northern California, all to be replaced by technology. The drive to replace humans with machinery is accelerating as companies struggle to avoid workplace infections of COVID-19 and to keep operating costs low. The U.S. shed around 40 million jobs at the peak of the pandemic. Some will never return. One group of economists estimates that 42% of the jobs lost are gone forever. This replacement of humans with machines may pick up more speed in coming months as companies move from survival mode to figuring out how to operate while the pandemic drags on. Robots could replace as many as 2 million more workers in manufacturing alone by 2025. “Look at the business model of Google, Facebook, Netflix. They’re not in the business of creating new tasks for humans,” says Daron Acemoglu, an MIT economist. The U.S. government incentivizes companies to automate, he says, by giving tax breaks for buying machinery and software. A business that pays a worker $100 pays $30 in taxes, but a business that spends $100 on equipment pays about $3 in taxes, he notes. The 2017 Tax Cuts and Jobs Act lowered taxes on purchases so much that “you can actually make money buying equipment,” Acemoglu says.
The Senate will be voting this week on the Trump military budget, which calls for a massive increase in defense spending. I strongly oppose this legislation. At a time when we have massive levels of income and wealth inequality; when half of our people are living paycheck to paycheck; when more than 500,000 Americans are homeless; and when public schools throughout the country are struggling to pay their teachers a livable salary, it is time to change our national priorities. I find it ironic that when I and other progressive members of Congress propose legislation to address the many unmet needs of workers, the elderly, the children, the sick and the poor, we are invariably asked, “How will we pay for it?” Yet we rarely hear that question with regard to huge increases in military spending, tax breaks for billionaires or massive subsidies for the fossil fuel industry. When it comes to giving the Pentagon $738 billion — even more money than it requested — there is a deafening silence within Congress and the ruling elites about what our nation can and cannot afford. When I talk about changing national priorities, I’m talking about the fact that the $120 billion increase in Pentagon spending — compared with the final year of the Obama administration — could have made every public college, university, trade school and apprenticeship program in the United States tuition free, eliminated homelessness and provided universal school meals to every kid in our nation’s public schools.
Note: The above article was written by Bernie Sanders. For more along these lines, see concise summaries of deeply revealing news articles on government corruption and income inequality from reliable major media sources.
The Covid-19 pandemic is putting the deepening class divide in America into stark relief. Four new classes are emerging. The Remotes: These are professional, managerial, and technical workers – an estimated 35% of the workforce – who are putting in long hours at their laptops ... and collecting about the same pay as before the crisis. The Essentials: They’re about 30% of workers, including nurses, homecare and childcare workers, farm workers, food processors, truck drivers, warehouse and transit workers, drugstore employees, sanitation workers, police officers, firefighters, and the military. Too many Essentials lack adequate protective gear, paid sick leave, health insurance, and childcare. They also deserve hazard pay. The Unpaid: They’re an even larger group than the unemployed – whose ranks could soon reach 25%, the same as in the Great Depression. 43% of adults report they or someone in their household has lost jobs or pay. The unpaid most need cash to feed their families and pay the rent. Fewer than half say they have enough emergency funds to cover three months of expenses. The Forgotten: This group includes everyone ... packed tightly into places most Americans don’t see: prisons, jails for undocumented immigrants, camps for migrant farmworkers, Native American reservations, homeless shelters, and nursing homes. The Essentials, the Unpaid, and the Forgotten are disproportionately poor, black, and Latino and they are disproportionately becoming infected.
The COVID-19 pandemic is far from a great equalizer. In the same month that 22 million Americans lost their jobs, the American billionaire class's total wealth increased about 10%–or $282 billion more than it was at the beginning of March. They now have a combined net worth of $3.229 trillion. The initial stock market crash may have dented some net worths at first–for instance, that of Jeff Bezos, which dropped down to a mere $105 billion on March 12. But his riches have rebounded: As of April 15, his net worth has increased by $25 billion. These "pandemic profiteers," as a new report from the Institute for Policy Studies, a progressive think tank, calls them, is just one piece of the wealth inequality puzzle in America. In the background is the fact that since 1980, the taxes paid by billionaires, measured as a percentage of their wealth, dropped 79%. "We're reading about benevolent billionaires sharing .0001% of their wealth with their fellow humans in this crisis, but in fact they've been rigging the tax rules to reduce their taxes for decades–money that could have been spent building a better public health infrastructure," says Chuck Collins [of] the Institute for Policy Studies and coauthor of the new report, titled "Billionaire Bonanza 2020: Wealth Windfalls, Tumbling Taxes, and Pandemic Profiteers." Another key finding of the report is that after the 2008 financial crisis, it took less than 30 months for billionaire wealth to return to its pre-meltdown levels. That wealth then quickly exceeded pre-2008 levels. But as of 2019, the middle class in America has not even yet recovered to the level of its 2007 net worth.
Note: This New York Post article shows how 43,000 millionaires in the U.S. will receive a "stimulus" gift averaging $1.6 million each. At the same time, this Reuters article claims that the coronavirus lockdown could plunge half a billion worldwide into poverty. And this BBC article warns of potential massive famines. So who is this lockdown really serving? For more along these lines, see concise summaries of deeply revealing news articles on the coronavirus from reliable major media sources.
Getting audited by the IRS is increasingly less certain. An audit is about half as likely as it was five years ago. Even so, some groups face higher audit rates than others. The tax agency is auditing fewer individual taxpayers not because we’re more honest, but because the IRS is working with fewer employees. The agency’s workforce has dropped from 94,000 workers in 2010 to roughly 78,000 in the most recent fiscal year, according to IRS data. With fewer agents available to perform audits, the agency’s audit rate has been whittled to 0.45% of individual returns in fiscal 2019, the IRS said. That compares with an audit rate of 0.9% in the fiscal 2014. Two types of taxpayers are more likely to draw the attention of the IRS: the rich and the poor, according to IRS data of audits by income range. Poor taxpayers, or those earning less than $25,000 annually, have an audit rate of 0.69% — more than 50% higher than the overall audit rate. Low-income taxpayers are more likely to get audited than any other group, except Americans with incomes of more than $500,000. The least likely group to get audited? That would be upper-middle-class households with an annual income of $100,000 to $200,000. Low-income households are more likely to get audited than some wealthier taxpayers ... due to the IRS checking for fraud and errors related to the Earned Income Tax Credit. Americans with annual incomes of more than $10 million have enjoyed a 75% decline in audit rates since 2013.
By the time Lehman Brothers filed for the largest bankruptcy in American history on Sept. 15, 2008, the country had been navigating stormy global financial waters for more than a year. Throughout the mess, the Federal Reserve and the U.S. Treasury had been permitting the largest banks in the country to funnel as much cash as they wanted to their shareholders ― even as it became clear those same banks could not pay their debts. Ben Bernanke, Hank Paulson and Timothy Geithner ... didn’t really rescue the banking system. They transformed it into an unaccountable criminal syndicate. Since the crash, the biggest Wall Street banks have been caught laundering drug money, violating U.S. sanctions against Iran and Cuba, bribing foreign government officials, making illegal campaign contributions to a state regulator and manipulating the market for U.S. government debt. Citibank, JPMorgan, Royal Bank of Scotland, Barclays and UBS even pleaded guilty to felonies for manipulating currency markets. Not a single human being has served a day in jail for any of it. As a percentage of each family’s overall wealth, the poorer you were, the more you lost in the crash. The top 1 percent of U.S. households ultimately captured more than half of the economic gains over the course of the Obama years, while the bottom 99 percent never recovered their losses from the crash. The result has been a predictable and terrifying resurgence of authoritarian politics unseen since the Second World War.
Corporate profits are booming, but average wages haven’t budged. In the early 1980s, large American companies sent less than half their earnings to shareholders, spending the rest on their employees and other priorities. But between 2007 and 2016, large American companies dedicated 93% of their earnings to shareholders. Because the wealthiest 10% of U.S. households own 84% of American-held shares, the obsession with maximizing shareholder returns effectively means America’s biggest companies have dedicated themselves to making the rich even richer. In the four decades after World War II, shareholders on net contributed more than $250 billion to U.S. companies. But since 1985 they have extracted almost $7 trillion. That’s trillions of dollars in profits that might otherwise have been reinvested in the workers who helped produce them. Before “shareholder value maximization” ideology took hold, wages and productivity grew at roughly the same rate. But since the early 1980s, real wages have stagnated even as productivity has continued to rise. Workers aren’t getting what they’ve earned. Companies also are setting themselves up to fail. Retained earnings were once the foundation for long-term investments. But from 1990 to 2015, nonfinancial U.S. companies invested trillions less than projected, funneling earnings to shareholders instead. This underinvestment handcuffs U.S. enterprise and bestows an advantage on foreign competitors. We should insist on a new deal.
Note: The above was written by Sen. Elizabeth Warren in conjunction with her introduction of the "Accountable Capitalism Act". For more along these lines, see concise summaries of deeply revealing news articles on corporate corruption and income inequality.
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.
Note: The graphics at the link above clearly show how inequality has been skyrocketing in recent years. For more along these lines, see concise summaries of deeply revealing income inequality news articles from reliable major media sources.
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