Income Inequality News ArticlesExcerpts of key news articles on income inequality
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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It was six years ago when CEO Dan Price raised the salary of everyone at his Seattle-based credit card processing company Gravity Payments to at least $70,000 a year. Price slashed his own salary by $1 million to be able to give his employees a pay raise. He was hailed a hero by some and met with predictions of bankruptcy from his critics. But that has not happened; instead, the company is thriving. "So you've almost doubled the number of employees?" CBS News' Carter Evans asked. "Yeah," Price replied. He said his company has tripled and he is still paying his employees $70,000 a year. "How much do you make?" asked Evans. "I make $70,000 a year," Price replied. To pay his own bills, Price downsized his life, sold a second home he owned, and tapped into his savings. According to the Economic Policy Institute, average CEO compensation is 320 times more than the salaries of their typical workers. "This shows that isn't the only way for a company to be successful and profitable," Hafenbrack said. "Do you pay what you can get away with? Or do you pay what you think is ideal, or reasonable, or fair?" Price said despite the success his company has had with the policy, he wishes other companies would follow suit. Bigger paychecks have lead to fiercely loyal employees. "Our turnover rate was cut in half, so when you have employees staying twice as long, their knowledge of how to help our customers skyrocketed over time and that's really what paid for the raise more so than my pay cut," said Price.
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The world's 2,365 billionaires enjoyed a $4 trillion boost to their wealth during the first year of the pandemic, increasing their fortunes by 54%, according to a new analysis by the Program on Inequality at the ... Institute for Policy Studies. Between March 18, 2020, and March 18, 2021, the wealth held by the world's billionaires jumped from $8.04 trillion to $12.39 trillion, according to the IPS' analysis of data from Forbes, Bloomberg and Wealth-X. Amazon.com founder Jeff Bezos, the world's wealthiest person, saw his fortune soar to $178 billion from $113 billion, or 57%, during that time, the study found. All told, the total wealth of the world's billionaire class grew 54% during the pandemic year, IPS reported. The ballooning wealth among the world's richest people is sparking calls for a "wealth tax," or an additional tax that would be added on top of regular income and capital gains taxes. But so far, a wealth tax is proving elusive in Washington, D.C., even as two-thirds of Americans express support for the idea of raising taxes on people earning more than $400,000. Rather than taxing the growing wealth of the nation's billionaires and millionaires, Mr. Biden wants to pay for his $2 trillion American Jobs Plan by boosting the corporate tax rate to 28% from its current 21%. In the meantime, the wealth disparities between the world's richest and poorest citizens have only widened during the pandemic. The number of people living in poverty globally doubled to more than 500 million during the first nine months of the pandemic.
Note: Why is so little media attention given to the greatest transfer of wealth ever since COVID hit? For more along these lines, see concise summaries of deeply revealing news articles on income inequality from reliable major media sources.
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.
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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.
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Worsening inequality, as poorer people and nations lose years of gains in the battle against hunger and poverty, is likely to be one of the lasting legacies of the pandemic. New data released by the United Nations ... illustrates the unequal impact as measured by access to a basic human necessity: Food. Global hunger shot up by an estimated 118 million people worldwide in 2020, according to the U.N. Food and Agriculture Organization, jumping to 768 million people – the most going at least as far back as 2006. The number of people living with food insecurity – or those forced to compromise on food quantity or quality – surged by 318 million, to 2.38 billion. In North America and Europe, formal employment, social safety nets and the widespread availability of remote work cushioned the blow. In those parts of the world, the percentage of people living with food insecurity edged up from 7.7 percent to 8.8 percent. But the developing world, home to billions of informal workers and gaps in government assistance, fared far worse. Latin America and the Caribbean saw the biggest one-year spike in food insecurity: a jump of nine percentage points, to 40.9 percent. "Governments need to open their eyes and adjust their thinking in a crisis, and in some cases, like Peru, they just didn't," said Torero of the U.N. Food and Agriculture Organization. "They had the money available to deal with the problem. But they imposed restrictions on movement blindly and did not find a way to help the people who needed it."
Note: The tragic increase of hunger and starvation worldwide is not a result of the pandemic, but rather of the lockdown in response to the pandemic. Why is that not even mentioned in this article? Many millions have died of starvation and suicide as a result of the lockdowns, yet so few care or are even aware of this. For more along these lines, see concise summaries of deeply revealing news articles on the coronavirus and income inequality from reliable major media sources.
When West Virginia declared a state of emergency to arrest the coronavirus, the social network that aids the homeless froze along with everything else. Ordered to shelter in place, people without shelter died at an alarming rate. In a bad year here ... two to four of the unhoused die. Over the past year, they have tallied 22 deaths, a sevenfold increase. Only two of the deaths are suspected to be from COVID-19. But all occurred during the collapse of the safety net that in normal times addresses the complex mix of afflictions–trauma, medical conditions, addiction–that accompany homelessness, and worsened during the profound isolation of the pandemic. What happened in [West Virginia] is happening across the country. Even before the pandemic lockdowns that fell hardest on low-income Americans –– and stand to push more people out of their homes –– the Department of Housing and Urban Development reported U.S. homelessness at 580,466 people, up 7% from a year earlier. Deaths are rising even faster. In San Francisco, the department of public health says deaths tripled over the past year in an unhoused population of 8,035. In Los Angeles, home to a vast homeless population tallied at 41,290, deaths increased by 32%. Homeless deaths in Washington, D.C., soared by 54%. In New York City, the Coalition for the Homeless reported a death rate up 75%. And over the past year, they died ... at a rate many times higher than the rate of deaths from the virus.
Bill Gates has never been a farmer. So why did the Land Report dub him "Farmer Bill" this year? Gates' achievement, according to the report, is that he's largest private owner of farmland in the US. A 2018 purchase of 14,500 acres of prime eastern Washington farmland – which is traditional Yakama territory – for $171m helped him get that title. In total, Gates owns approximately 242,000 acres of farmland with assets totaling more than $690m. To put that into perspective, that's nearly the size of Hong Kong and twice the acreage of the Lower Brule Sioux Tribe, where I'm an enrolled member. A white man owns more farmland than my entire Native nation! The relationship to land – who owns it, who works it and who cares for it – reflects obscene levels of inequality and legacies of colonialism and white supremacy in the United States, and also the world. Wealth accumulation always goes hand-in-hand with exploitation and dispossession. Our era is dominated by the ultra-rich ... and a burgeoning green capitalism. And Bill Gates' new book How to Avoid a Climate Disaster positions himself as a thought leader in how to stop putting greenhouse gases into the atmosphere and how to fund what he has called elsewhere a "global green revolution" to help poor farmers mitigate climate change. What expertise in climate science or agriculture Gates possesses beyond being filthy rich is anyone's guess. Investment firms are making the argument farmlands will meet "carbon-neutral" targets for sustainable investment portfolios.
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Treasury Secretary Janet Yellen said a "shocking" amount of taxes was going uncollected by the federal government. "The gap between what we're collecting in taxes on current tax and what we should be collecting ... amounts to over $7 trillion over a decade," Yellen said. Yellen's remarks emphasize the Biden administration's efforts to collect tax revenue from the wealthiest Americans and multinational companies to finance $4 trillion in spending programs. At the center of Biden's planned revenue raisers is a provision to increase funding for IRS enforcement. He also wants to slap investors earning above $1 million with a hike in the capital-gains tax and raise the top marginal income-tax rate to 39.6% from 37%. The IRS's official estimate is that there is a tax gap of $441 billion a year. But Charles Rettig, the agency's commissioner, recently told Congress that number could be over $1 trillion. A recent study from IRS researchers and academics found that the top 1% of Americans failed to report about one-quarter of their income to the IRS. The research found income underreporting was nearly twice as high for the top 0.1%, which could account for billions in uncollected taxes. The number of agents devoted to working on sophisticated tax-evasion enforcement dropped by 35% over the past decade. The IRS's budget fell by 20% between 2010 and 2018. There was an 80% decline from 2011 to 2018 in the audit rate for those making over $1 million a year.
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.
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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.
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$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.
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After years of declines, America's middle class now holds a smaller share of U.S. wealth than the top 1%. The middle 60% of U.S. households by income ... saw their combined assets drop to 26.6% of national wealth as of June, the lowest in Federal Reserve data going back three decades. For the first time, the super rich had a bigger share, at 27%. The data offer a window into the slow-motion erosion in the financial security of mid-tier earners. That continued through the Covid-19 pandemic, despite trillions of dollars in government relief. While "middle class" has different meanings to different people, many economists use income to define the group. The 77.5 million families in the middle 60% make about $27,000 to $141,000 annually, based on Census Bureau data. Their share in three main categories of assets - real estate, equities and private businesses - slumped in one generation. That made their lives more precarious, with fewer financial reserves to fall back on when they lose their jobs. The top 1% represents about 1.3 million households who roughly make more than $500,000 a year - out of a total of almost 130 million. Over the past 30 years, 10 percentage points of American wealth has shifted to the top 20% of earners, who now hold 70% of the total, Fed data show. A generation ago, the middle class held more than 44% of real estate assets in the country. Now it's down to 38%. The pandemic ... led to soaring rents this year, which hurt those who can't afford a house.
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