The wealth gap in the United States has grown larger, and the ugly beast is not done growing. According to an article on the Huffington Post’s official website, the median income for the United States is less than $27,000 annually.

Meanwhile, the wealthiest, much-smaller portion of the American population who make over a million dollars has increased to 94,000 people. In comparison, in 2009, 79,000 people made over a million dollars. How can it be that the richest people in America continue to get more and more money while a much larger number of people are struggling to make ends meet with just $30,000 to 40,000 a year (If that!)? Pretty soon, there will be no middle-class, just two teams: The Strugglers who must obsess over grocery shopping coupons and the Exuberantly Wealthy.

People have a right to feel pessimistic about the unemployment rate and salaries in America. Not only are the unemployed unhappy financially, but even people who already have jobs are upset because necessities like food and fuel are becoming more and more expensive while their incomes are not increasing. According to the Huffington Post, nine in ten employees do not expect a raise in the upcoming year. Furthermore, household income has declined more during this “recovery” period than during the initial impact of the economic recession.

Something must be done to mend this income gap and there should be more jobs created for the unemployed. In addition, I hope that there will be more salary rewards given to the already-employed who work hard to care for their families. If you would like to read into this further, check out this article!

Last week, the Census Bureau released its data on 2010 poverty statistics.  I found the following numbers particularly disturbing:

• 1 in 6 Americans lived in poverty in 2010.
• Incomes fell 4-5% for American households in the bottom 20%, more than 6 times as much as those in the top 20%.
• More than 1 in 5 children are living in poverty. This issue is compounded by the fact that the racial and ethnic wealth gap also expanded in 2010. This is demonstrated by the fact that approximately 40% of African American children live in poverty, while only 12% of Caucasian children are living in poverty.
• Over 40% of single-mother families lived below the poverty line, compared to 8.8% of families headed by a married couple. Furthermore, more than half a million single women who worked full-time, year round, lived in poverty.

After these 2010 figures were announced, I attended “Poverty and Income in 2010: A Look at the New Census Data and What the Numbers Mean,” a panel arranged by the Brookings Institution. The panelists represented a wide range of ideologies and advocated differing prescriptions for our country’s poverty dilemma. These prescriptions ranged from blaming personal irresponsibility to fully adopting President Obama’s American Jobs Act. One panelist even insinuated that we should put the needs of the most vulnerable on hold until the nation is financially “able” to address that problem. Essentially, the growing wealth gap was of no concern to this panelist.

These opinions were frustrating, needless to say, because although personal responsibility is relevant, it should not be used as a gross overgeneralization for condemning millions of people in situations beyond their control. People need to be provided with the opportunity and resources before being expected to take responsibility for their reality. We also know that people across socioeconomic stratifications are looking for jobs, but we cannot ignore the most vulnerable in our society in our attempts to stimulate our economy. Drastically uneven income growth is harmful to our nation.

The severity of the poverty numbers is best understood when looking through the lens formed by the majority of the panelists’ testimonies: 1) The 2007 economic recession was much worse than we realized, and will require more drastic steps to repair, 2) Government programs are necessary to diminish the poverty level in our country, and 3) It is feasible to simultaneously lessen the poverty rate while decreasing our nation’s deficit.

Indeed, the new data released by the Census Bureau was altogether grim, to put it lightly. However, there were a couple of positive points that are worth highlighting:

• The poverty rate did NOT increase significantly among senior citizens. This can be attributed to safety net programs like Social Security; and
• The American Recovery and Reinvestment Act (ARRA) of 2009 prevented 4.5 million people from entering poverty.

Through government policy, we can make things better or worse. It is with hope that we look to Obama’s jobs proposal, which one of the panelists predicted will bolster the safety net, keeping 1.5 million fewer people in poverty by extending unemployment insurance. She also predicted that it will create/ save jobs for an additional 1.5 million people, to prevent a total of 3 million people from slipping below the poverty line. Ultimately, jobs are the best antipoverty strategy, and we must be active in voicing our concerns to our representatives, which will help ensure that they enact steps to alleviate the weight of our nation’s predicament.

For more information on the poverty statistics, click here.

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

Blog: Letters to the Editor

Letters to the Editor

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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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!

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!