Income Inequality News Stories
Below are key excerpts of revealing news articles on income inequality from reliable news media sources. If any link fails to function, a paywall blocks full access, or the article is no longer available, try these digital tools.
It seems safe to say that Capital in the Twenty-First Century, the magnum opus of the French economist Thomas Piketty, will be the most important economics book of the year and maybe of the decade. Mr. Piketty, arguably the worlds leading expert on income and wealth inequality, does more than document the growing concentration of income in the hands of a small economic elite. He also makes a powerful case that were on the way back to patrimonial capitalism, in which the commanding heights of the economy are dominated not just by wealth, but also by inherited wealth, in which birth matters more than effort and talent. Six of the 10 wealthiest Americans are already heirs rather than self-made entrepreneurs, and the children of todays economic elite start from a position of immense privilege. As Mr. Piketty notes, the risk of a drift toward oligarchy is real and gives little reason for optimism. Business income, and income from capital in general, is increasingly concentrated in the hands of a few people. In 1979 the top 1 percent of households accounted for 17 percent of business income; by 2007 the same group was getting 43 percent of business income, and 75 percent of capital gains. Both Koch brothers are numbered among the 10 wealthiest Americans, and so are four Walmart heirs. Great wealth buys great political influence and not just through campaign contributions. Many conservatives live inside an intellectual bubble of think tanks and captive media that is ultimately financed by a handful of megadonors.
Note: For more on income and wealth inequality, see the deeply revealing reports from reliable major media sources available here.
Oxfam International, a poverty fighting organization, made news at the World Economic Forum in Davos earlier this year with its report that the worlds 85 richest people own assets with the same value as those owned by the poorer half of the worlds population, or 3.5 billion people (including children). Both groups have $US 1.7 trillion. Thats $20 billion on average if you are in the first group, and $486 if you are in the second group. By the time Forbes published its 2014 Billionaires List in early March, it took only 67 of the richest peoples wealth to match the poorer half of the world. Each of the 67 is on average worth the same as 52 million people from the bottom of the worlds wealth pyramid. Bill Gates, the worlds richest man, with a net worth of $76 billion, is worth the same as 156 million people from the bottom. Who are the 67? The biggest group28 billionaires, or 42% of themis from the United States. No other country comes close. Germany and Russia have the second-highest number, with six each. The rest are sprinkled among 13 countries in Western Europe, APAC and the Americas. That the biggest group of the super rich comes from the U.S. should not be a surprise, as the country holds almost a third of the worlds wealth (30%), significantly more than any other country, according to the Global Wealth Databook, from Credit Suisse Research Institute.
Note: For more on income and wealth inequality, see the deeply revealing reports from reliable major media sources available here.
The paths that many of todays wealthiest Americans have taken on their road to riches have not bettered most peoples lives. Many have actually hurt most peoples lives. Their riches have come at most other peoples expense. Since the recession officially ended in June 2009, for instance, the wages for all private-sector jobs have fallen, on average, by 0.5 percent. The wages for jobs in financial services, however, have risen by 5.5 percent. Inasmuch as the recession was brought about by the financial services industry, its understandable that this disparity would strike most people as unjust. Or consider the mechanisms by which some CEOs earn huge salaries. Last week, the board of directors of JPMorgan Chase voted to raise chief executive Jamie Dimons annual pay to $20 million up from $11.5 million despite the fact that the bank paid the federal government around $20 billion last year to settle charges stemming from its multiple misdeeds. Laying off workers and depressing their pay has become the key factor in boosting corporate profits in recent years. With profits at a record high as a share of the nations gross domestic product and wages at a record low, its entirely proper that Americans question the legitimacy of the 1 percents wealth.
Note: For more on income inequality, see the deeply revealing reports from reliable major media sources available here.
Eighty-five people control the same amount of wealth as half the world's population. That is 85 people compared with 3.5 billion. A new report from Oxfam has been published in time for the World Economic Forum in Davos this week. It shows the world's ultra-wealthy have not only recovered from the global financial crisis, they have positively blossomed. The report shows the wealth of the 1 per cent richest people in the world is worth about $US110 trillion, 65 times the total wealth of the bottom half of the world's population. It also shows the world's richest 85 people control about $US1.7 trillion in wealth, equivalent to the bottom half of the world's population. And far from hindering the wealthy, the political response to the global financial crisis - including the actions of central banks and the austerity measures introduced by national governments - has made the rich fabulously richer. In the US, the wealthiest 1 per cent of the population grabbed 95 per cent of post-financial crisis growth between 2009 and 2012, while the bottom 90 per cent became poorer. An Oxfam survey of six countries - the United States, UK, Spain, Brazil, India and South Africa - has found that the majority of people believe laws and regulations are skewed in favour of the rich, so people are noticing.
Note: For more on income inequality, see the deeply revealing reports from reliable major media sources available here.
2013 marked one of the biggest redistributions in recent American history - a redistribution upward, from average working people to the owners of America. The stock market ended 2013 at an all-time high, giving stockholders their biggest annual gain in almost two decades. Most Americans didn't share in those gains, however, because most people haven't been able to save enough to invest in the stock market. More than two-thirds of Americans live from paycheck to paycheck. Even if you include the value of individual retirement accounts, most shares of stock are owned by the very wealthy. The richest 1 percent of Americans owns 35 percent of the value of American-owned shares. The richest 10 percent owns more than 80 percent. So in the bull market of 2013, America's rich hit the jackpot. Stock prices track corporate profits. And 2013 was a banner year for profits. Where did those profits come from? Here's where redistribution comes in. American corporations didn't make most of their money from increased sales (although their foreign sales did increase). They made their big bucks mostly by reducing their costs - especially their biggest single cost: wages. They push wages down because most workers no longer have any bargaining power when it comes to determining pay. The continuing high rate of unemployment - including a record number of long-term jobless and a large number who have given up looking for work altogether - has allowed employers to set the terms.
Note: For more on income inequality, see the deeply revealing reports from reliable major media sources available here.
To many Americans, the war on poverty declared 50 years ago by President Lyndon B. Johnson has largely failed. The poverty rate has fallen only to 15 percent from 19 percent in two generations, and 46 million Americans live in households where the government considers their income scarcely adequate. Half a century after Mr. Johnsons now-famed State of the Union address, the debate over the governments role in creating opportunity and ending deprivation has flared anew, with inequality as acute as it was in the Roaring Twenties and the ranks of the poor and near-poor at record highs. High rates of poverty ... have remained a remarkably persistent feature of American society. About four in 10 black children live in poverty; for Hispanic children, that figure is about three in 10. According to one recent study, as of mid-2011, in any given month, 1.7 million households were living on cash income of less than $2 a person a day, with the prevalence of the kind of deep poverty commonly associated with developing nations increasing since the mid-1990s. The 1996 Clinton-era welfare overhaul drastically cut the cash assistance available to needy families, often ones headed by single mothers. Over the last 30 years, growth has generally failed to translate into income gains for workers even as the American labor force has become better educated and more skilled.
Note: For more on income inequality, see the deeply revealing reports from reliable major media sources available here.
France's constitutional council has given President Francois Hollande the green light to introduce a 75 per cent tax rate taking aim at the super rich. Under the new plan, which the French council found constitutional, companies will have to pay 50 per cent tax on all salaries exceeding one million euros, or the equivalent of approximately 833, 000. Including social contributions, the rate will effectively stand at 75 per cent, although the total amount will be capped at 5 per cent of a company's turnover. The levy is set to affect income earned this year and in 2014. The 'millionaire tax' could affect more than 450 companies and several football clubs, and could raise more than 200 million euros on an annual basis. The super tax, a flagship pledge in Hollande's political manifesto, has infuriated business leaders, high earners and celebrities. President Hollande, who once admitted that he dislikes the rich and has been accused of taking an anti-business stance, has fired back at critics insisting that high earners should do more to boost the country's public finances. But the super tax has sparked fears of a mass exodus of businesses, bankers and celebrities. Last year, Prime Minister David Cameron said he would "roll out the red carpet" and "welcome more French businesses to Britain" if Hollande raised taxes on the wealthy.
Note: A New York Times article shows that the tax rate for those earning over $8 million per year in the U.S. dropped from 41% in 1995 to 31.5% in 2005. For more on income inequality, see the deeply revealing reports from reliable major media sources available here.
The richest people on the planet got even richer in 2013, adding $524 billion to their collective net worth, according to the Bloomberg Billionaires Index, a daily ranking of the worlds 300 wealthiest individuals. The aggregate net worth of the worlds top billionaires stood at $3.7 trillion at the market close on Dec. 31. The biggest gains came in the technology industry, which soared 28 percent during the year. Bill Gates, the founder and chairman of Redmond, Washington-based Microsoft Corp., was the years biggest gainer. The 58-year-old tycoons fortune increased by $15.8 billion to $78.5 billion, according to the index, as shares of Microsoft, the worlds largest software maker, rose 40 percent. Gates recaptured the title of worlds richest person on May 16 from Mexican investor Carlos Slim. Slim lost $1.4 billion during 2013. His America Movil SAB, the largest mobile-phone operator in the Americas, dropped 12 percent in the first three months of the year after Mexicos Congress passed a bill to quash the billionaires market dominance. Sheldon Adelson, founder of Las Vegas Sands Corp., the world’s largest casino company, was the second-biggest gainer in 2013, adding $14.4 billion to his net worth as the company’s shares rose 71 percent.
Note: For more on income inequality, see the deeply revealing reports from reliable major media sources available here.
Its 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 theyve benefited somewhat from rising living standards. From 1988 to 2008, Mr. Milanovic found, people in the worlds 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 Americas example, it does not portend well for the future. Last year, the top 1 percent of Americans took home 22 percent of the nations income; the top 0.1 percent, 11 percent. Ninety-five percent of all income gains since 2009 have gone to the top 1 percent.
Note: For more on income inequality, see the deeply revealing reports from reliable major media sources available here.
The holiday season is upon us. Sadly, the big retailers are Scrooges when it comes to paying their workers. Undergirding the sale prices is an army of workers earning the minimum wage or a fraction above it, living check to check on their meager pay and benefits. The dark secret that the retail giants like Walmart don't want you to know is that many of these workers subsist below the poverty line, and rely on programs like food stamps and Medicaid just to get by. This holiday season, though, low-wage workers from Walmart to fast-food restaurants are standing up and fighting back. Wal-Mart is the world's largest retailer, with 2.2 million employees, 1.3 million of whom are in the US. It reported close to $120bn in gross profit for 2012. Just six members of the Walton family, whose patriarch, Sam Walton, founded the retail giant, have amassed an estimated combined fortune of between $115bn to $144bn. These six individuals have more wealth than the combined financial assets of the poorest 40% of the US population. Walmart workers have been organizing under the banner of OUR Walmart, a worker initiative supported by the United Food and Commercial Workers union. Workers have taken courageous stands, protesting their employer and engaging in short-term strikes. Walmart has retaliated, firing many who participated. Parallel to the Walmart campaign is a drive for higher wages in the fast-food industry. In more than 100 cities, workers are organizing protests and strikes ... and winning.
Note: For more on income inequality, see the deeply revealing reports from reliable major media sources available here.
In the world of thoroughbred racing, the ruler of Dubai, Sheikh Mohamed, has spared no expense in making himself a big man. The sheikh's taking the same no expense spared approach to promoting Dubai around the world. Prominent figures, including former President Bill Clinton, have been paid hundreds of thousands of dollars to speak, or act as consultants. President Bush's brother Neil was a guest of the royal family last year. And as Dubai grows from desert town to boomtown, again, no expense is being spared. Just putting up the world's tallest building isn't enough. The building will be twice this height when completed next year. One hundred sixty floors of the most luxurious apartments and offices the world has ever seen. All being built, it turns out, by workers who on average make less than a dollar an hour. Behind the glitzy world of Dubai are some 500,000 foreign workers who human rights groups say live in virtual enslavement. A report out just this week from the group Human Rights Watch concludes workers putting up Dubai's soaring towers are being systematically cheated and abused, with the sheikh's government looking the other way.
Note: If you want to see how deep this ugly hole goes, don't miss the eye-opening ABC News video at this link.
As the tax year draws to a close, the charitable tax deduction beckons. Americas wealthy are its largest beneficiaries. According to the Congressional Budget Office, $33 billion of last years $39 billion in total charitable deductions went to the richest 20 percent of Americans, of whom the richest 1 percent reaped the lions share. The generosity of the super-rich is sometimes proffered as evidence theyre contributing as much to the nations well-being as they did decades ago when they paid a much larger share of their earnings in taxes. Think again. A large portion of the charitable deductions now claimed by Americas wealthy are for donations to culture palaces operas, art museums, symphonies, and theaters where they spend their leisure time hobnobbing with other wealthy benefactors. Another portion is for contributions to the elite prep schools and universities they once attended or want their children to attend. These arent really charities as most people understand the term. Theyre often investments in the life-styles the wealthy already enjoy and want their children to have as well. Increasingly, being rich in America means not having to come across anyone whos not. As with all tax deductions, the government has to match the charitable deduction with additional tax revenues or spending cuts; otherwise, the budget deficit widens. In economic terms, a tax deduction is exactly the same as government spending. Which means the government will, in effect, hand out $40 billion this year for charity thats going largely to wealthy people who use much of it to enhance their lifestyles.
Note: For more on government corruption, see the deeply revealing reports from reliable major media sources available here.
In America today, the middle class is disappearing, unemployment is sky high and senior poverty is growing. We also have the most unequal distribution of wealth and income of any major country. At a time when almost all new income created is going to the top 1% and when the gap between the very rich and everybody else is growing wider, we must not balance the budget on the backs of the most vulnerable people in our country: working families, the elderly, children, the sick and the poor. We must not cut Social Security, Medicare or Medicaid. Let's be clear: Social Security is not an entitlement program. It is an earned income benefit that has been enormously successful in cutting the rate of senior poverty. Further, Social Security is not "going broke." According to the Social Security Administration, the Social Security Trust Fund has a surplus today of $2.8 trillion and can pay out every benefit owed to every eligible American for the next 20 years. The solution to making Social Security fully solvent for the next 50 years is to apply the payroll tax on annual income more than $250,000. Right now, the Social Security tax stops at $113,700 a year, so someone who earns that amount pays the same as a billionaire. This makes no sense. Our entire health care system, including Medicare and Medicaid, is much too wasteful and bureaucratic. We should join the rest of the industrialized world in moving toward a national health care program that provides health care to every man, woman and child as a right.
Note: For more on income inequality, see the deeply revealing reports from reliable major media sources available here.
Pope Francis on [November 26] issued a bold new document in Vatican parlance an apostolic exhortation called Evangelii Gaudium or The Joy of the Gospel. In this document, he sets out an exciting new vision of how to be a church. It is to be a joyful community of believers completely unafraid of the modern world, completely unafraid of change and completely unafraid of challenges. The exhortation [expresses] an overriding concern for the poor in the world. Francis champions an idea that has lately been out of favor: the churchs preferential option for the poor. Gods heart has a special place for the poor, the Pope says. But it is not enough simply to say that God loves the poor in a special way and leave it at that. We must be also vigilant in our care and advocacy for them. Everyone must do this, says the Pope. None of us can think we are exempt from concern for the poor and for social justice. And in case anyone misses the point, after a critique of the idolatry of money and an economy of exclusion, the Pope says: The Pope loves everyone, rich and poor alike, but he is obliged in the name of Christ to remind all that the rich must help, respect and promote the poor. I exhort you to generous solidarity and a return of economics and finance to an ethical approach which favors human beings. This does not mean simply caring for the poor, it means addressing the structures that keep them poor: The need to resolve the structural causes of poverty cannot be delayed.
Note: For how you can help to end poverty through microlending, click here. For a treasure trove of great news articles which will inspire you to make a difference, click here.
Limitless growth is the fantasy of economists, businesses and politicians. It is seen as a measure of progress. As a result, gross domestic product (GDP), which is supposed to measure the wealth of nations, has emerged as both the most powerful number and dominant concept in our times. However, economic growth hides the poverty it creates through the destruction of nature, which in turn leads to communities lacking the capacity to provide for themselves. In effect, growth measures the conversion of nature into cash, and commons into commodities. Today, economics is separated from and opposed to both ecological processes and basic needs. While the destruction of nature has been justified on grounds of creating growth, poverty and dispossession [have] increased. While being non-sustainable, it is also economically unjust. The dominant model of economic development has in fact become anti-life. Nobel-prize winning economists Joseph Stiglitz and Amartya Sen have admitted that GDP does not capture the human condition and urged the creation of different tools to gauge the wellbeing of nations. This is why countries like Bhutan have adopted the gross national happiness in place of gross domestic product to calculate progress. We need to create measures beyond GDP, and economies beyond the global supermarket, to rejuvenate real wealth. We need to remember that the real currency of life is life itself.
A few days ago, The Times published a report on a society that is being undermined by extreme inequality. This society claims to reward the best and brightest regardless of family background. In practice, however, the children of the wealthy benefit from opportunities and connections unavailable to children of the middle and working classes. And it was clear from the article that the gap between the societys meritocratic ideology and its increasingly oligarchic reality is having a deeply demoralizing effect. If the rich are so much richer than the rest that they live in a different social and material universe, that fact in itself makes nonsense of any notion of equal opportunity. The data in question have been compiled for the past decade by the economists Thomas Piketty and Emmanuel Saez, who use I.R.S. numbers to estimate the concentration of income in Americas upper strata. According to their estimates, top income shares took a hit during the Great Recession, as things like capital gains and Wall Street bonuses temporarily dried up. But the rich have come roaring back, to such an extent that 95 percent of the gains ... since 2009 have gone to the famous 1 percent. In fact, more than 60 percent of the gains went to the top 0.1 percent, people with annual incomes of more than $1.9 million. The growing concentration of income at the top [is undermining] all the values that define America. Year by year, were diverging from our ideals. Inherited privilege is crowding out equality of opportunity; the power of money is crowding out effective democracy.
Note: For more on extreme income inequality, see the deeply revealing reports from reliable major media sources available here.
Chilling. Thats how one reviewer describes the experience of watching Harvey Weinsteins latest film. Its about income inequality. As Clinton Labor Secretary Robert Reich intones in the film, Of all developed nations, the United States has the most unequal distribution of income, and were surging towards even greater inequality. Inequality for All, directed by Jacob Kornbluth and set to be released nationwide on Sept. 27, comes at a critical moment for America. Sept. 15 marks the five-year anniversary of the collapse of Lehman Brothers fueled by a toxic combination of deregulation, subprime lending and credit-default swaps that precipitated the 2008 global economic crisis and laid bare the rot at the heart of our economic system. It was largely this orgy of greed that led the first Occupy Wall Street protesters to Zuccotti Park on Sept. 17, two years ago next week. Inequality for All throws into sharp relief the numbers and stories we hear. Combining footage from Reichs electrifying Berkeley lectures with interviews, news clips and rich graphics, the film weaves a compelling narrative about how and why, since the late 1970s, income inequality has risen to crisis levels. The facts are breathtaking. In 1978, according to Reich, a typical male worker made $48,302, while the typical top 1 percenter earned $393,682, more than eight times as much. In 2010, even as overall gross domestic product and productivity increased, the average male workers wage fell to $33,751. Meanwhile, the average top 1 percent earner was making more than $1.1 million 32 times the average earner.
Note: For more on income inequality, see the deeply revealing reports from reliable major media sources available here.
This week marks the fifth anniversary of the collapse of Lehman Bros., heralding the Great Recession. The better off are better off than ever. Most of the rest are right where they started, or worse. For example, earnings of the top 1 percent (those families making more than $394,000 a year) commanded 95 percent of the income gains generated between 2009 and 2012. Their earnings grew by 31 percent in the period, compared with 0.4 percent for the less fortunate. That's according to a study published last week by UC Berkeley economist Emmanuel Saez, whose finding in 2011 that income inequality in the United States is the widest since 1928 was highly publicized. In fact, according to the latest study by Saez, whose numbers are drawn from IRS data, America's top 10 percent (those households earning above $114,000) account for more than half of the nation's total income, the highest percentage since 1917. Despite improvements in the economy, "it seems unlikely that U.S. income concentration will fall much in the coming years," Saez concludes. Or it could intensify. Factoring in inflation, median household income ($52,000) has actually fallen by 4.4 percent since June 2009, according to Sentier Research, a Maryland consultancy, in a report last week based on government statistics. Then there's the Federal Reserve, which reported that American families have recovered just 45 percent of the $16 trillion in wealth that went down the tubes in the recession. And most of the recovery has gone to the wealthy, whose income bounced back largely thanks to the recovery of the stock market, according to an analysis by the Federal Reserve Bank of St. Louis in May.
Note: To read the UC Berkeley report on extreme income disparities, click here. For more on income inequality, see the deeply revealing reports from reliable major media sources available here.
The top 10 percent of earners took more than half of the countrys total income in 2012, the highest level recorded since the government began collecting the relevant data a century ago, according to an updated study by the prominent economists Emmanuel Saez and Thomas Piketty. The top 1 percent took more than one-fifth of the income earned by Americans, one of the highest levels on record since 1913. The figures underscore that even after the recession the country remains in a new Gilded Age, with income as concentrated as it was in the years that preceded the Depression of the 1930s, if not more so. High stock prices, rising home values and surging corporate profits have buoyed [the] incomes of the most affluent Americans, with the incomes of the rest still weighed down by high unemployment and stagnant wages for many blue- and white-collar workers. These results suggest the Great Recession has only depressed top income shares temporarily and will not undo any of the dramatic increase in top income shares that has taken place since the 1970s, Mr. Saez, an economist at the University of California, Berkeley, wrote. The income share of the top 1 percent of earners in 2012 [jumped] to about 22.5 percent in 2012 from 19.7 percent in 2011. The economy remains depressed for most wage-earning families. With sustained, relatively high rates of unemployment, businesses are under no pressure to raise their employees incomes because both workers and employers know that many people without jobs would be willing to work for less. The share of Americans working or looking for work is at its lowest in 35 years.
Note: To read the UC Berkeley report on extreme income disparities, click here. For more on income inequality, see the deeply revealing reports from reliable major media sources available here.
Back in 1914, Henry Ford announced he was paying workers on his Model T assembly line $5 a day -- three times what the typical factory employee earned at the time. The Wall Street Journal termed his action "an economic crime." But Ford knew it was a cunning business move. The higher wage turned Ford's auto workers into customers who could afford to buy Model Ts. In two years, Ford's profits more than doubled. Yet in the years leading up to the Great Crash of 1929 [the] wages of most American workers stagnated even as the economy surged. Gains went mainly into corporate profits and into the pockets of the very rich. American families maintained their standard of living by going deeper into debt, and the rich gambled with their gigantic winnings. In 1929, the debt bubble popped. The same thing happened in the years leading up to the crash of 2008. The lesson should be obvious. When the economy becomes too lopsided -- disproportionately benefiting corporate owners and top executives rather than average workers -- it tips over. It's still lopsided. We're slowly emerging from the depths of the worst downturn since the Great Depression, but nothing fundamentally has changed. Corporate profits are up largely because payrolls are down. Even Ford Motor Company is now paying its new hires half what it paid new employees a few years ago. All over the American economy, employee pay is now down to the smallest share of the economy since the government began collecting wage and salary data 60 years ago. And corporate profits constitute the largest share of the economy since then.
Note: The author of this analysis, Robert Reich, is former U.S. Secretary of Labor, a professor of public policy at the University of California at Berkeley, and the author of Aftershock: The Next Economy and America's Future. He blogs at http://www.robertreich.org. For more on income inequality, see the deeply revealing reports from reliable major media sources available here.
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