income inequality

‘The 62’ control more wealth than 3.5 billion people

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“Far from trickling down, income and wealth are instead being sucked upwards at an alarming rate,” a new Oxfam study finds. The Atlantic reports, The World’s Wealthiest 62 People Have as Much Money as the Poorest 3.5 Billion:

Income-InequalityWealth just keeps growing for the 62 richest people in the world. Collectively, this ultra-wealthy group controls $1.76 trillion, which is about the cumulative worth of the poorer half of the world’s population, or around 3.5 billion people. And since 2010, wealth has become more and more concentrated in favor of the richest of the rich while those on the lower rungs of the economic ladder have seen their positions worsen, according to a new report from Oxfam International.

The wealth of the richest 62 people grew by more than half a trillion dollars in that last half-decade, while the wealth of the poorest 50 percent of people globally decreased by more than $1 trillion during the same period. “Far from trickling down, income and wealth are instead being sucked upwards at an alarming rate,” the study finds.

The Wealth of the Rich Keeps Climbing

Oxfam

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Rising wage inequality: the wedge between productivity and worker’s wages

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The New York Times’ Paul Krugman blog today cites the most recent report by Josh Bivens and Larry Mishel on the productivity-pay gap.  Understanding the Historic Divergence Between Productivity and a Typical Worker’s Pay: Why It Matters and Why It’s Real:

Income-InequalityWage stagnation experienced by the vast majority of American workers has emerged as a central issue in economic policy debates, with candidates and leaders of both parties noting its importance. This is a welcome development because it means that economic inequality has become a focus of attention and that policymakers are seeing the connection between wage stagnation and inequality. Put simply, wage stagnation is how the rise in inequality has damaged the vast majority of American workers.

The Economic Policy Institute’s earlier paper, Raising America’s Pay: Why It’s Our Central Economic Policy Challenge, presented a thorough analysis of income and wage trends, documented rising wage inequality, and provided strong evidence that wage stagnation is largely the result of policy choices that boosted the bargaining power of those with the most wealth and power (Bivens et al. 2014). As we argued, better policy choices, made with low- and moderate-wage earners in mind, can lead to more widespread wage growth and strengthen and expand the middle class.

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Wealth inequality is distorting how Americans think about the problem

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monopolybOne of the right-wing talking points I see pop up with more frequency is the use of “liberal envy” of the wealthy elite Plutocrats who rule over us as the reason for issues like income and wealth inequality.

Liberals are just “envious” of the über-rich top one-percent and that is why they want to tax the rich more, so we are told.

This talking point only makes sense if one is a member of the privileged one percent. It’s a safe bet that most, if not all of you, are not.

Neil Irwin, who was a Washington Post columnist and the economics editor of its “Wonkblog” before moving over to The New York Times as a senior economic correspondent and writing for “The Upshot” column a year ago, recently wrote Why Americans Don’t Want to Soak the Rich:

With rising income inequality in the United States, you might expect more and more people to conclude that it’s time to soak the rich. Here’s a puzzle, though: Over the last several decades, close to the opposite has happened.

Since the 1970s, middle-class incomes have been stagnant in inflation-adjusted terms, while the wealthy have done very well; inequality of wealth and income has risen.

Over that same period, though, Americans’ views on whether the government should work to redistribute income — to tax the rich, for example, and funnel the proceeds to the poor and working class — have, depending on which survey answers you look at, either been little changed, or shifted toward greater skepticism about redistribution.

In other words, Americans’ desire to soak the rich has diminished even as the rich have more wealth available that could, theoretically, be soaked.

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President Obama to call on Congress to raise taxes on the wealthiest taxpayers and the largest financial firms

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In his State of the Union Address on Tuesday night, President Obama Will Seek to Raise Taxes on Wealthy to Finance Cuts for Middle Class:

monopolybPresident Obama will use his State of the Union address to call on Congress to raise taxes and fees on the wealthiest taxpayers and the largest financial firms to finance an array of tax cuts for the middle class, pressing to reshape the tax code to help working families, administration officials said on Saturday.

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The president’s plan would raise $320 billion over the next decade, while adding new provisions cutting taxes by $175 billion over the same period. The revenue generated would also cover an initiative Mr. Obama announced this month, offering some students two years of tuition-free community college, which the White House has said would cost $60 billion over 10 years.

The centerpiece of the plan, described by administration officials on the condition of anonymity ahead of the president’s speech, would eliminate what Mr. Obama’s advisers call the “trust-fund loophole,” a provision governing inherited assets that shields hundreds of billions of dollars from taxation each year. The plan would also increase the top capital-gains tax rate, to 28 percent from 23.8 percent, for couples with incomes above $500,000 annually.

Those changes and a new fee on banks with assets over $50 billion would be used to finance a set of tax breaks for middle-income earners, including a $500 credit for families in which both spouses work; increased child care and education credits; and incentives to save for retirement.

Here is the White House Fact Sheet (.pdf) released on Saturday.

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The legacy of ‘Reaganomics’: most Americans are poorer today than in 1987

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monopolyb“Reaganomics” — blind faith in supply-side “trickle down” down GOP economics which redistributed wealth upwards to the über-rich investor class on the promise that making the so-called “job creators” even wealthier would create economic expansion and prosperity that would “trickle down” to the middle and even lower economic classes — is a disproved and discredited lie. The American economy has been ravaged by the crippling consequences of this lie for 30 years now. It is the source of the greatest economic inequality in the United States since the end of the Gilded Age in 1929.

Matt O’Brien writes at the Washington Post’s Wonkblog today, The bottom 90 percent are poorer today than they were in 1987:

Once upon a time, the American economy worked for everybody, and even the middle class got richer. But this story has only been a fairy tale for almost 30 years now. The new, harsh reality is that the bottom 90 percent of households are poorer today than they were in 1987.

This is actually a much more dramatic statement than it sounds. While the Federal Reserve has already told us that the median households is worth less now than it was in 1989 — that’s the household right in the middle — 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.

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You can see this troubling finding in the chart above, based on data from Emmanuel Saez and Gabriel Zucman’s new paper on U.S. wealth inequality, which itself is based on tax data. 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. The answer, as you can see, is that the bottom 90 percent actually did very well during the first few decades of the postwar period — adding more wealth, in percentage terms, than those at the top.

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