The front page of Sunday’s Washington Post (6/19/11) featured another chilling article about growing disparities in our nation. Under the heading, “Breakaway Wealth; The Pay Bubble,” one article (“Income gap widens as executives prosper”) included information about how executive compensation rose sharply in recent years while the wealth gap also grew dramatically. During the 1950s and 1960s, it noted, executive pay was relative flat. The steep rise began in the 1970s.

The fact that executive pay was flat when companies were growing in the ‘50s and ‘60s shows that current excuses for excessive compensation – i.e., that executive salaries rise naturally when firms grow – are inaccurate.

Many of today’s executives enjoy luxurious lifestyles while millions of people struggle to put food on the table. According to the article, “The evolution of executive grandeur – from very comfortable to jet-setting – reflects one of the primary reasons that the gap between those with the highest incomes and everyone else is widening.”

Do you want to learn more? Check out the Washington Post.

And be sure to sign up for our Mind the Gap! campaign by clicking here. You can be part of the movement to address this injustice!

The front page of Sunday’s Washington Post (6/19/11) included another chilling article about growing disparities in our nation. Under the heading, “Breakaway Wealth; The Pay Bubble,” one article (“Income gap widens as executives prosper”) included information about how executive compensation rose sharply in recent years while the wealth gap also grew dramatically. During the 1950s and 1960s, it noted, executive pay was relative flat. The steep rise began in the 1970s.

The fact that executive pay was flat when companies were growing in the ‘50s and ‘60s shows that current excuses for excessive compensation – i.e., that executive salaries rise naturally when firms grow – are inaccurate.

Many of today’s executives enjoy luxurious lifestyles while millions of people struggle to put food on the table. According to the article, “The evolution of executive grandeur – from very comfortable to jet-setting – reflects one of the primary reasons that the gap between those with the highest incomes and everyone else is widening.”

Do you want to learn more? Check out the Washington Post.

And be sure to sign up for our Mind the Gap! campaign by clicking here. You can be part of the movement to address this injustice!

Many of us at NETWORK were intrigued by The Spirit Level – Why Greater Equality Makes Societies Stronger, the book that shows why a less-equal society is bad for everyone.

The authors – Professors Richard Wilkinson and Kate Pickett – did extensive research on various social problems in developed nations and found a correlation between a nation’s income inequality and social problems. The chart above shows that correlation.

Note that the U.S. has the highest level of income inequality of all the other developed nations, and also the highest level of social problems.

(The book has charts showing the correlation for each of the social problems listed. You can also find them at: www.equalitytrust.org.uk/resources/other/TSL-slides)

A Matter of Trust

What surprised me the most was that “trust” was included as a social problem. But after reading the chapter on trust I now understand why the level of trust is a problem. Here’s what I found:

“Changes in inequality and trust go together over the years. With greater inequality, people are less caring of one another, there is less mutuality in relationships, people have to fend for themselves and get what they can – so, inevitably there is less trust. Mistrust and inequality reinforce each other. . . . we are less likely to empathize with those not seen as equals; material differences serve to divide us socially.” (p.56)

How is the level of trust measured?

For the U.S. it’s the National Opinion Research Center’s General Social Survey question that asks people whether or not they agree that most people can be trusted. In 1960, 60 percent of respondents agreed. By 2004, this had fallen to 40%.

This isn’t good. Because when people don’t trust each other they don’t cooperate with each other. This erodes ‘social capital’ which is a term used to describe people’s involvement in community life.

Political scientist Robert Putnam says that “. . . citizens in high social capital states [are] likely to do more to reduce inequalities, and inequalities themselves [are] likely to be socially divisive.” (p. 55)

The authors of The Spirit Level believe that “inequality increases the social distance between different groups of people, making us less willing to see them as ‘us’ rather than ‘them’”. (p. 62)

All this sounds believable to me.

The other chapters in the book discuss the other social problems listed above. But I think the heart of the book, and perhaps the reason the book is titled The Spirit Level, is the chapter about trust, which is titled “Community life and social relations.”

What kind of community life and social relations do we envision for our country? Can we achieve it with such a high level of wealth and income inequality, and such a low level of trust?

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Blog: Letters to the Editor

Letters to the Editor

Below is a favorite story of mine. It illustrates the logic behind failed poverty alleviation using the metaphor of an island with 100 dogs.

We are immediately limiting the success of anti-hunger and anti-poverty programs when we ask “Why are the poor poor?” instead of “Why is there poverty?”

“There once was an island with a population of one hundred dogs. Every day a plane flew overhead and dropped ninety-five bones onto the island. It was a dog paradise, except for the fact that every day five dogs went hungry. Hearing about the problem, a group of social scientists was sent to assess the situation and recommend remedies. The social scientists ran a series of regressions and determined that bonelessness in the dog population was associated with levels of bone-seeking effort and the boneless dogs also lacked the important skills in fighting for bones. As a remedy for the problem, some of the social scientists proposed that boneless dogs needed a good kick in the side to get them moving, while others proposed that boneless dogs be provided special training in bone-fighting skills. A bitter controversy ensued over which of these two strategies ought to be pursued. Over time, both strategies were tried, and both reported limited success in helping individual dogs overcome their bonelessness- but despite this success, the bonelessness problem on the island never lessened in the aggregate. Every day, there were still five dogs who went hungry.”

Or, as Obama put it in 2005:

“It is time for us to meet the why of today with the why nots we often quote but rarely live- to answer ‘why hunger’ and ‘why homelessness’, ‘why violence’ and ‘why despair’ with ‘why not food jobs and living wages’, ‘why not better health care and world class schools’, ‘why not a country where make possible the potential that exist in every human being?’”

-Barack Obama at the Robert Kennedy Human Rights Award Ceremony in November 2005