Income Inequality News StoriesExcerpts of Key Income Inequality News Stories in Major Media
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Before 2002, parties could accept unlimited donations from individuals or groups (corporations, labor unions, etc.). The McCain-Feingold law, as it came to be known, banned soft-money contributions, and it also prohibited political groups that operate outside the regulated system and its donation limits from running “issue ads” that appear to help or hurt a candidate close to an election. In 2010, the Citizens United decision by the Supreme Court effectively blew apart the McCain-Feingold restrictions on outside groups and their use of corporate and labor money in elections. That same year, a related ruling from a lower court made it easier for wealthy individuals to finance those groups. What followed has been the most unbridled spending in elections since before Watergate. In 2000, outside groups spent $52 million on campaigns, according to the Center for Responsive Politics. By 2012, that number had increased to $1 billion. The result was a massive power shift. With the advent of Citizens United, any players with the wherewithal, and there are surprisingly many of them, can start what are in essence their own political parties, built around pet causes or industries and backing politicians uniquely answerable to them. No longer do they have to buy into the system. Instead, they buy their own pieces of it outright. “Suddenly, we privatized politics,” says Trevor Potter, an election lawyer who helped draft the McCain-Feingold law.
Note: To understand the decisive role that money plays in elections politics, read this entire, revealing article. For more along these lines, see concise summaries of deeply revealing election process news articles from reliable major media sources. For more along these lines, see the excellent, reliable resources provided in our Elections Information Center.
Citizens United v. Federal Election Commission in 2010 tossed aside decades of legislative restrictions, freeing corporations and unions to spend as much as they wished. Six months ago, the Supreme Court took its Citizens United decision further. In McCutcheon v. Federal Election Commission, it struck down long standing caps on what an individual may contribute to all federal candidates, collectively, in any two-year election cycle. With conservative justices dominant, the court expanded the concept that money is equivalent to speech, protected by the First Amendment. Corporations, it said, enjoy the same political rights as individuals. A study by the Sunlight Foundation, an advocate for government transparency, found that 31,385 people — that is 1 percent of 1 percent of the United States population — accounted for 28 percent of all disclosed contributions in the 2012 elections. This year, an analysis by The New York Times shows, more than half of broadcast advertising in the midterm elections has been paid for by groups that reveal little or nothing about their donors. Overwhelmingly, the main beneficiaries have been conservative organizations.
Note: For more along these lines, see concise summaries of deeply revealing election news articles from reliable major media sources. For more along these lines, see the excellent, reliable resources provided in our Elections Information Center.
Once upon a time, the American economy worked. The new, harsh reality is that the bottom 90 percent of households are poorer today than they were in 1987 -- it turns out that everybody but the richest 10 percent of Americans are worst off. That includes the poor, the entire middle class, and even what we would consider much of the upper class. In this chart, I've taken each group's inflation-adjusted net worth from 1945 and indexed that to 100, so we can compare how wealth has grown for people with lots or little of it. It's been a lost 25 years for the bottom 90 percent, but a lost 15 for the next 9 percent, too. That's right: altogether, the bottom 99 percent are worth less today than they were in 1998. But this isn't a story about the top 1 percent running away from everybody else. It's a story about the top 0.1 — scratch that, the top 0.01 percent — doing so. Indeed, since 1980, the top 0.01 percent's piece of the wealth pie has increased by 8.6 percentage points, while the next 0.09 percent's has done so by 5.4. The bottom 99 percent, meanwhile, have seen their wealth share fall an astonishing 18 percentage points.
Note: For more along these lines, see concise summaries of deeply revealing income inequality news articles from reliable major media sources. For more on how our financial system produces inequality, see the excellent, reliable resources provided in our Banking Corruption Information Center.
TIME: Your book Just Mercy is about getting legal help for poor people in Alabama. What are the biggest impediments? BRYAN STEVENSON (Lawyer and founder of the Equal Justice Initiative): We have a criminal-justice system that treats you better if you’re rich and guilty than if you’re poor and innocent. I don’t believe that America’s system is shaped by culpability. I think it’s shaped by wealth. TIME: 1 in 3 black men in the U.S. under 30 is in jail, on probation or on parole. Is this the scariest stat? STEVENSON: That 1 in 3 black males born in 2001 is expected to go to jail or prison during their lifetimes is more astonishing because it’s about the future. And 1 in 6 Latino boys. That wasn’t true in the 20th century. TIME: What do you say to people who say, “It’s easy to not go to jail–don’t commit a crime”? STEVENSON: In this country we have a presumption of guilt that follows young kids of color. I’ve represented 10-year-olds being prosecuted as adults. They are put in an adult jail. It’s so unnecessary–we have juvenile facilities. No one defends it, and yet we still have 10,000 children in an adult jail or prison. TIME: What’s the role of the corporations that build prisons? STEVENSON: Corporations have really corrupted American criminal justice by creating these perverse incentives where they actually pay legislators to create new crimes so that we can maintain these record-high-level rates of imprisonment. These companies spend millions of dollars a year on lobbying. Prison spending has gone from $6 billion in 1980 to $80 billion today.
Note: For details about Stevenson's uphill battle as a legal advocate for the poor, read the complete transcript of the Time interview summarized above. For more along these lines, see these excellent, concise summaries of prison corruption news stories from major media sources.
Imagine a system of college education supported by high and growing government spending on elite private universities that mainly educate children of the wealthy and upper-middle class, and low and declining government spending on public universities that educate large numbers of children from the working class and the poor. You can stop imagining. That's the American system right now. The annual government subsidy to Princeton University, for example, is about $54,000 per student, according to an estimate by economist Richard Vedder. Other elite privates aren't far behind. Public universities, by contrast, have little or no endowment income. They get almost all their funding from state governments. But these subsidies have been shrinking. State and local financing for public higher education came to about $76 billion last year, nearly 10 percent less than a decade before. Since more students attend public universities now than ten years ago, that decline represents a 30 percent drop per student. That means the average annual government subsidy per student at a public university comes to less than $4,000, about one-tenth the per student government subsidy at the elite privates. So what justifies the high per-student government subsidies at the elite private universities, and the low per-student subsidies in public universities? There is no justification.
Note: For more along these lines, see concise summaries of deeply revealing news articles about income inequality from reliable major media sources.
Income inequality is taking a toll on state governments. The widening gap between the wealthiest Americans and everyone else has been matched by a slowdown in state tax revenue. Even as income for the affluent has accelerated, it has barely kept pace with inflation for most other people. That trend can mean a double-whammy for states: The wealthy often manage to shield much of their income from taxes. And they tend to spend less of it than others do, thereby limiting sales tax revenue. As the growth of tax revenue has slowed, states have faced tensions over whether to raise taxes or cut spending to balance their budgets. ‘‘Rising income inequality is not just a social issue,’’ said Gabriel Petek, the S&P credit analyst who wrote the report. ‘‘It presents a very significant set of challenges for the policy makers.’’ Stagnant pay for most people has compounded the pressure on states to preserve funding for education, highways, and social programs such as Medicaid. Income inequality isn’t the only factor slowing state tax revenue. Online retailers account for a rising chunk of consumer spending. Yet they often manage to avoid sales taxes. Consumers are spending more on untaxed services, too. Before income inequality began to rise consistently, state tax revenue grew an average of 9.97 percent a year from 1950 to 1979. That average steadily fell with each subsequent decade, dipping to 3.62 percent between 2000 and 2009.
Note: For more on this, see concise summaries of deeply revealing income inequality news articles from reliable major media sources.
Occupy Wall Street is tackling a new beast: student loans. Marking the third anniversary of the Occupy Wall Street movement, the group's Strike Debt initiative announced ... it has abolished $3.8 million worth of private student loan debt since January. It said it has been buying the debts for pennies on the dollar from debt collectors, and then simply forgiving that money rather than trying to collect it. In total, the group spent a little more than $100,000 to purchase the $3.8 million in debt. While the group is unable to purchase the majority of the country's $1.2 trillion in outstanding student loan debt because it is backed by the federal government, private student debt is fair game. This debt Occupy bought belonged to 2,700 people who had taken out private student loans to attend Everest College, which is run by Corinthian Colleges. Occupy zeroed in on Everest because Corinthian Colleges is one of the country's largest for-profit education companies and has been in serious legal hot water lately. Following a number of federal investigations, the college told investors this summer that it plans to sell or close its 107 campuses due to financial problems -- potentially leaving its 74,000 students in [the] lurch. "Despite Corinthian's dire financial straits, checkered past, and history of lying to and misleading vulnerable students, tens of thousands of people may still be liable for the loans they have incurred while playing by the rules and trying to get an education," a Strike Debt member said in an email.
Senator Elizabeth Warren ... believes the most important [problem] to solve is how to get the American economy working for someone other than billionaires. It's a message she's been taking all over the country, and she isn't afraid to call banks, credit card companies and some employers cheats and tricksters. "The biggest financial institutions figured out they could make a lot of money by cheating people on mortgages, credit cards and payday loans," she told a packed auditorium at the Graduate Center of the City University of New York, where she spoke alongside New York Times columnist Paul Krugman. The biggest applause of the night was on three issues that come up frequently in Warren's speeches. 1) Financial regulation: Warren was the driving force behind the creation of the Consumer Financial Protection Bureau after the 2008 financial crisis. The agency has returned billions of dollars to Americans who were wronged. 2) Reducing student loans: Last summer Warren made headlines for arguing that student loans should have the same interest rates that banks get when they borrow money from the Federal Reserve. As she likes to remind people, "Student loans issued from 2007 to 2012 are on target to produce $66 billion in profit for the United States government." 3) Raising the minimum wage: "No one should work full time and still live in poverty," Warren said. Her other big push is for basic worker rights.
Note: For more on this, see concise summaries of deeply revealing income inequality news articles from reliable major media sources.
Take a stroll through just about any commercial district in San Francisco, and you're likely to see a revolutionary sight that spread from the city around the world - homeless people hawking copies of a newspaper that is all about poverty. The newspaper is the Street Sheet, and when it started there was nothing like it. Now, the buck-a-copy publication is marking a major milestone: the 25th anniversary of its first issue. It's grown to become an eight-page broadsheet on newsprint, filled with artwork, journalism, poetry and opinion pieces produced by homeless people themselves. There are 125 homeless vendors who sell a combined 17,000 copies twice a month, and they keep all the proceeds in hopes of earning a small living without panhandling. Many of the pieces are produced by homeless people. The Street Sheet is billed by its publisher, the Coalition on Homelessness, as the longest continuously produced newspaper covering homeless issues in the world, although New York City's Street News came out around the same time. Together, they set the stage for similar papers in more than 30 countries, including Britain's the Big Issue, Spare Change News in Boston and Seattle's Real Change News. The Coalition on Homelessness was founded in 1987 to fight for the rights of homeless people and to advocate for more housing.
Note: Read a rich sample of this publication discussing the courageous work of peaceworker David Hartsough. Explore a treasure trove of concise summaries of incredibly inspiring news articles which will inspire you to make a difference.
In recent weeks, the managers, employees and customers of a New England chain of supermarkets called Market Basket have joined together to oppose the board of directors' decision in June to oust the chain's popular chief executive, Arthur T. Demoulas. Their demonstrations and boycotts have emptied most of the chain's 71 stores. What was so special about Arthur T., as he's known? Mainly, his business model. He kept prices lower than his competitors, paid his employees more, and gave them and his managers more authority. Late last year, he offered customers an additional 4 percent discount, arguing they could use the money more than the shareholders. In other words, Arthur T. viewed the company as a joint enterprise from which everyone should benefit, not just shareholders. Which is why the board fired him. Patagonia, a large apparel manufacturer based in Ventura, has organized itself as a "B corporation." That's a for-profit company whose articles of incorporation require it to take into account the interests of workers, the community and the environment as well as shareholders. The performance of B corporations according to this measure is regularly reviewed and certified by a nonprofit entity called B Lab. To date, more than 500 companies in 60 industries have been certified as B corporations, including the household products firm Seventh Generation. In addition, 27 states have passed laws allowing companies to incorporate as "benefit corporations." This gives directors legal protection to consider the interests of all stakeholders rather than just the shareholders who elected them.
Note: What would the world be like if each corporation put the welfare of its workers and quality of its products at the same level of priority as profits for its stockholders? For more on this, see concise summaries of deeply revealing income inequality news articles from reliable major media sources.
This summer, [Raymond Burse,] the interim president at Kentucky State University, made a large gesture to his school's lowest-paid employees. Burse announced that he would take a 25 percent salary cut to boost their wages. The 24 school employees making less than $10.25 an hour, who mostly serve as custodial staff, groundskeepers and lower-end clerical workers, will see their pay rise to that new baseline. Some had been making as little as $7.25, the current federal minimum. Burse, who assumed the role of interim president in June, says he asked the school's chief financial officer how much such an increase would cost. The amount: $90,125. "I figured it was easier for me to forgo that amount, rather than adding an additional burden on the institution," Burse says. The school ratified his employment contract on the spot — decreasing it from $349,869 to $259,744. He has pledged to take further salary cuts any time new minimum-wage employees are hired on his watch, to bring their hourly rate to $10.25. Burse describes himself as someone who believes in raising wages, and who also has high expectations and demands for his staff. "I thought that if I'm going to ask them to really be committed and give this institution their all, I should be doing something in return," Burse says. "I didn’t have any examples of it having been done out there and I didn’t do it to be an example to anyone else," Burse says. "I did it to do right by the employees here."
Market economies need a certain amount of inequality to function. But American inequality has become so extreme that it’s inflicting a lot of economic damage. And this, in turn, implies that redistribution — that is, taxing the rich and helping the poor — may well raise, not lower, the economy’s growth rate. There is solid evidence, coming from places like the International Monetary Fund, that high inequality is a drag on growth, and that redistribution can be good for the economy. [This] view about inequality and growth got a boost from Standard & Poor’s, the rating agency, which put out a report supporting the view that high inequality is a drag on growth. There is, at this point, no reason to believe that comforting the comfortable and afflicting the afflicted is good for growth, and good reason to believe the opposite. If you look systematically at the international evidence on inequality, redistribution, and growth — which is what researchers at the I.M.F. did — you find that lower levels of inequality are associated with faster, not slower, growth. Furthermore, income redistribution at the levels typical of advanced countries (with the United States doing much less than average) is “robustly associated with higher and more durable growth.” That is, there’s no evidence that making the rich richer enriches the nation as a whole, but there’s strong evidence of benefits from making the poor less poor. Incentives aren’t the only thing that matters for economic growth. Opportunity is also crucial. And extreme inequality deprives many people of the opportunity to fulfill their potential.
Note: For more on this, see concise summaries of deeply revealing income inequality news articles from reliable major media sources.
Sen. Elizabeth Warren has built a sizable political profile — including the requisite presidential speculation — by espousing a simple idea: that the system is "rigged" against average Americans. And you might be surprised who agrees with her: A whole bunch of conservatives. According to a new Pew survey, 62 percent of Americans think that the economic system unfairly favors the powerful, and 78 percent think that too much power is concentrated in too few companies. The discontent isn't limited to those who share Warren's liberal ideology; 69 percent of young conservative-leaning voters and 48 percent of the most conservative voters agree that the system favors the powerful, according to Pew. Although Warren seems an outlier in the legislative branch for her fiery discontent with inequality — and the role she says Wall Street plays in exacerbating it — the Pew survey suggests that the vast majority of Americans are at least open to her underlying premise.
Note: Watch Chris Matthews of Fox News interview Elizabeth Warren to see how the right is opening to support of good people on the left. For more on this, see concise summaries of deeply revealing income inequality news articles from reliable major media sources.
New York City’s budget for the 2015 fiscal year includes a new item that supporters of a fairer economy will want to celebrate: $1.2 million set aside for the development of worker-owned cooperative businesses. The spending is a small fraction of the $75 billion budget, which the City Council approved on June 26. But, according to a statement by U.S. Federation of Worker Cooperatives, it's the largest investment in the sector ever made by a city government in the United States. Cooperative businesses are both owned and operated by employees. They focus on maximizing value for all their members as well as creating fair and quality jobs. “This is a great step forward for worker cooperatives,” Melissa Hoover, executive director of the U.S. Federation of Worker Cooperatives, said in a press release. According to Hoover the co-op funding received widespread support from city council members, which “shows that they understand cooperatives can be a viable tool for economic development that creates real opportunity." Here’s how the city’s newly adopted budget describes the program: "Funding will support the creation of 234 jobs in worker cooperative businesses by coordinating education and training resources and by providing technical, legal and financial assistance. The initiative will fund a comprehensive citywide effort to reach 920 cooperative entrepreneurs, provide for the start-up of 28 new worker cooperative small businesses and assists another 20 existing cooperatives."
UN Secretary General Ban Ki-moon on [June 14] opened a Group of 77 plus China summit in Bolivia, with developing countries calling for a more fair new world economic order. Ban spoke to a vast audience that included some 30 heads of government and representatives of more than 100 nations, about two-thirds of the world's countries. The destiny of billions of poor people and the state of the planet depends on their work, Ban told the group. Dignitaries at the event include the presidents of Venezuela, Ecuador, Cuba and host nation Bolivia. China, which is not a G77 member, is participating in the summit, partly in a nod to its expanding trade ties in Latin America. Leaders at the summit are pressing a "fight for fair and sustainable economic growth, and for a new world economic order," said Venezuelan President Nicolas Maduro. Ecuador's President Rafael Correa slammed the current global economic system as morally flawed. "Only when we are united across Latin America and united around the world, will we be able to make our voice heard and change an international order that is not just unfair -- it is immoral," Correa said. The summit closes [with a document that] sets forth ambitious new commitments to reduce poverty and inequality, foster sustainable development, protect sovereignty over natural resources and promote fair trade and technology transfers.
Note: This important news was reported almost nowhere in the US media other than this one MSN article. For more on this, see concise summaries of deeply revealing income inequality news articles from reliable major media sources.
Talk of economic mobility and the wealth gap is hardly new. From the Occupy movement to President Obama's re-election campaign, income inequality has been in the spotlight for years. Even so, the "inclusive capitalism" conference in London ... broke new ground. Not because of the conversation, but because of the people having it. The 250 people from around the world invited to attend this one-day conference do not represent "the 99 percent," or even the 1 percent. It's more like a tiny fraction of the 1 percent. "We have $30 trillion of assets under management in the room," says conference organizer Lynn Forester de Rothschild, who runs E. L. Rothschild, a major investment firm she and her husband, of the storied Rothschild banking family. That amount — $30 trillion — is roughly one-third of the total investable wealth in the world. "If this bulk of capital decides that they are going to invest in companies that aren't only thinking about the short-term profit," says Rothschild, "then we will see corporate behavior change." The titans of commerce and finance didn't necessarily fly to this meeting in London out of a sense of ethics or moral duty, though that may be a motivation for some. For many, says Rothschild, it's a sense of self-preservation. Capitalism appears to be under siege. "It's true that the business of business is not to solve society's problems," she says. "But it is really dangerous for business when business is viewed as one of society's problems. And that is where we are today."
Yesterday's Conference on Inclusive Capitalism ... brought together the people who control a third of the world's liquid assets – the most powerful financial and business elites – to discuss the need for a more socially responsible form of capitalism that benefits everyone, not just a wealthy minority. Leading financiers referred to statistics on rising global inequalities and the role of banks and corporations in marginalising the majority while accelerating systemic financial risk – vindicating the need for change. While the self-reflective recognition by global capitalism's leaders that business-as-usual cannot continue is welcome, sadly the event represented less a meaningful shift of direction than a ... transparent effort to rehabilitate a parasitical economic system on the brink of facing a global uprising. Central to the proceedings was an undercurrent of elite fear that the increasing disenfranchisement of the vast majority of the planetary population under decades of capitalist business-as-usual could well be its own undoing. The Conference on Inclusive Capitalism is the brainchild of the Henry Jackson Society (HJS), a little-known but influential British think tank with distinctly neoconservative and xenophobic leanings.
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.
Note: For more on the devastating impacts of the income inequality, see the deeply revealing reports from reliable major media sources available here.
The 25 highest-paid hedge fund managers ... made a combined $21 billion in 2013. In particular, let’s think about how their good fortune refutes several popular myths about income inequality in America. Apologists for soaring inequality almost always try to disguise the gigantic incomes of the truly rich by hiding them in a crowd of the merely affluent. Instead of talking about the 1 percent or the 0.1 percent, they talk about the rising incomes of college graduates. The goal of this misdirection is to soften the picture, to make it seem as if we’re talking about ordinary white-collar professionals who get ahead through education and hard work. But many Americans are well-educated and work hard. The vast gulf that now exists between the upper-middle-class and the truly rich didn’t emerge until the Reagan years. Second, ignore the rhetoric about “job creators” and all that. Conservatives want you to believe that the big rewards in modern America go to innovators and entrepreneurs, people who build businesses and push technology forward. But that’s not what those hedge fund managers do for a living; they’re in the business of financial speculation. Once upon a time, you might have been able to argue with a straight face that all this wheeling and dealing was productive, that the financial elite was actually providing services to society commensurate with its rewards. But, at this point, the evidence suggests that hedge funds are a bad deal for everyone except their managers; they don’t deliver high enough returns to justify those huge fees, and they’re a major source of economic instability. We’re still living in the shadow of a crisis brought on by a runaway financial industry.
Note: For more on financial corruption, see the deeply revealing reports from reliable major media sources available here.
Until the 1980s, corporate CEOs in America were paid, on average, 30 times what their typical worker was paid. Since then, CEO pay has skyrocketed to 280 times the pay of a typical worker; in big companies, to 354 times. Meanwhile, over the same 30-year span, the median American worker has seen no pay increase at all, adjusted for inflation. Even though the pay of male workers continues to outpace that of females, the typical male worker between the ages of 25 and 44 peaked in 1973 and his pay has been dropping ever since. Wages of the median male worker across all age brackets have dropped 10 percent, after inflation, since 2000. CEOs and other top executives use their fortunes to fuel speculative booms followed by busts. CEOs and top corporate executives in Europe, Canada and Japan don't get paid vast multiples of what their employees earn. At the same time, their workers are starting to command better pay than the typical American. The median wage in Canada is already higher than the median wage in the United States. There's no easy answer for reversing this trend, but ... a bill introduced in the California Legislature ... creates the right incentives. The proposed legislation sets corporate taxes according to the ratio of CEO pay to the pay of the company's typical worker. Corporations with low pay ratios get a tax break. Those with high ratios get a tax increase. For the last 30 years, almost all the incentives for companies have been to lower the pay of their workers while increasing the pay of their CEOs and other top executives. It's about time some incentives were applied in the other direction.
Note: For more on income inequality, see the deeply revealing reports from reliable major media sources available here.
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