Archive for October, 2016

Scary numbers

Posted: 31 October 2016 in Uncategorized
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Gabriel Zucman, in his article in the special issue of Pathways, “State of the Union: The Poverty and Inequality Report 2016” (pdf), reveals lots of scary numbers about wealth inequality in the United States.*

The scariest is the percentage of wealth owned by the top 0.1 percent of households, which “has exploded in the U.S. over the past four decades.”

The share of wealth held by the top 0.1 percent of households is now almost as high as in the late 1920s, when The Great Gatsby defined an era that rested on the inherited fortunes of the robber barons of the Gilded Age.

In recent decades, only a tiny fraction of the population saw its wealth share grow. While the wealth share of the top 0.1 percent increased a lot in recent decades, that of the next 0.9 percent (i.e., 99–99.9) did not. And the share of total wealth of the “merely rich”—households who fall in the top 10 percent, but are not wealthy enough to be counted among the top 1 percent—actually decreased slightly over the past four decades. In other words, $20 million fortunes (and higher) grew much faster than smaller fortunes in the single-digit millions.

The flip side of this trend is, of course, the wealth of the bottom 90 percent, which actually grew from 15 percent in the 1920s to 36 percent in the 1980s but dramatically declined thereafter. According to the most recent data, the members of the bottom 90 percent collectively own just 23 percent of total U.S. wealth, about as much as in 1940.

Yes, indeed, these are scary numbers.

 

*There are plenty of other scary numbers in the rest of the report, concerning U.S. poverty, income inequality, and  much else—alone and in comparison to other countries.

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Eduardo Porter is right: the “long, painful slog out of the Great Recession” hasn’t been accompanied by any kind of shared prosperity.

As the chart above reveals, the share of income going to the bottom 90 percent of U.S. households has actually fallen since 2007 (from 50.3 percent to 49.5 percent)—and, in recent years, remains far below what it was (67.4 percent) in 1970.

In other words, the so-called recovery looks a lot like the unequalizing dynamic of the U.S. economy in the years and decades leading up to the Great Recession. Those who work for a living have been getting less and less, while those at the top have managed to capture and keep the growing surplus.

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We’re not just talking about the white working-class. Wages “for all groups of workers (not just those without a bachelor’s degree), regardless of race, ethnicity, or gender”, have (since 1979) have lagged the growth in economy-wide productivity.

And that’s just in terms of income. As Porter explains,

by many other metrics, Americans’ well-being remains pretty low. Whether it is life expectancy or infant mortality, incarceration or educational attainment, countless statistics offer a fairly dark picture of the American experience. It is a picture of prosperity that consistently leaves large numbers of Americans behind.

The United States suffers the highest obesity rate among the 35 industrialized countries that make up the Organization for Economic Cooperation and Development. In terms of life expectancy at birth, it ranks 10th from the bottom. America’s infant mortality rate has dropped by half since 1980. Still, today Turkey and Mexico are the only countries in the O.E.C.D. to report a higher share of dead babies. Infant mortality fell faster in almost every other industrialized country.

Mainstream economists, politicians, and pundits may prefer to focus on the first part of Charles Dickens’s famous opening sentence. But that’s only true for the tiny group at the top. For everyone else, it really is—and has been for decades—”the worst of times.”

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Special mention

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Cartoon of the day

Posted: 29 October 2016 in Uncategorized
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Cartoon of the day

Posted: 28 October 2016 in Uncategorized
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