Huffington Post reports that income inequality costs the average American worker $18,000 a year. This number is drawn from an Economic Policy Institute report that considers how money has been redistributed from the working poor and middle class to the 1%. The question is not just lost income, but also how increased productivity has not been matched by increased salaries. Huffington Post author Jillian Berman puts it this way: “The rich have gotten richer at the expense of the rest of us.”
This article is another example of why good job news can hide deeper problems. If workers are getting low income jobs or not getting decent raise, they will have a constant feeling of falling behind, one step from bankruptcy – social insecurity. This problem will not be solved until something changes so there is a more equitable distribution of income and wealth. America needs a raise, the kind of raise that will let working people pay off their debts and save for the future.
Buzzfeed reports that shareholders at Domino’s Pizza are questioning the pay of CEO Patrick Doyle, whose pay is $43 million over 3 years. The groups leading the protest are not simply do-gooders. They want the best results from their investments. One member of the group says that most of the money can be paid up front with no consideration of company performance or profit. These shareholders, whatever their motivation, are holding a CEO and his friends on the Board to the fire. It’s about time. For too long, only working people have been targets. It’s time to hold the highest of the high accountable for their performance.
Lately I’ve been blogging about the disparity of wealth in the U.S. However, it’s a worldwide problem that had its best framing from an unusual source: Pope Francis. Since taking over from Pope Benedict, Francis has surprised many of us by speaking out in defense of poor and working people. This past Sunday, he put the problem in theological terms.
Speaking to unemployed miners in Sardina, the Pope put aside prepared remarks and spoke his heart. He said, “If there is no work, there is no dignity.” He challenged a world economic system that replaced God with an idol: money. The Pope then prayed to God to “give us work and teach us to fight for work.” Those words are powerful, especially in a world were workers are treated more and more as disposable commodities.
At what point is too much wealth too much and too much poverty too much? Pope Francis sees a world of haves and have not, and he is calling for change. May his voice – and his prayers – be heard.
Huffington Post has a great story about the growth of income inequality in the U.S. It includes an animated map that shows changes over the decades. Anyone who doesn’t think this issue is a problem needs to have an explanation for this map. As I said in a recent post, this trend of new income going almost exclusively to the top 1/% and top 10% cannot continue.
The Miami Heat?
The Baltimore Ravens?
Nope. It’s the 1% stomping all challengers in the income game. Al Jazeera America reports that the richest of the rich collect 19.3% of all income earned in the U.S. in 2012, which is the largest share in IRS records for the past century. 95% of income increases since 2009 have gone to the top 1%, which is defined as income over $394,000 in 2012.
In some ways, these numbers aren’t surprising because they are part of a trend, more of the same. What is surprising is that so many Americans accept this situation as normal. Since the Reagan presidency, tax laws have been rigged to help the most wealthy. Meanwhile, the middle class pays more of its declining income to support the social programs needed by employees of companies like Walmart and McDonalds that pay low wages. 99% of America needs a raise.
The former Labor Secretary asks a good question: Can one worker or family have too much? This is a moral question, not a legal one. Of course, it is legal for a CEO to make a ratio of 150:1 to the average worker at her company. Is it right? At a time when most of the jobs being created are low wage, we need to think about wages and who benefits most. That is what Reich explores in his commentary.
To put the question another way, how can we justify a situation where six heirs of a man who was a business genius (Sam Walton) hold more wealth than the bottom 40% of all Americans? This is not just a question for the bottom 40% (more than 100 million Americans). Wage disparity makes us all poorer because we have become a society that lives by fear rather than hope. This gap between rich and poor cannot continue to grow as it has over the last 30 years. Sooner or later, the cradle will fall.
Good advice? Once upon a time, American society offered mobility, especially to those who made the sacrifice to get a good education. Writing in Daily Kos, Laura Clawson finds that things are different now in the U.S. If you want to get ahead, there’s one path to success: Be born rich.
College graduates still have better prospects than those with less education. But the research Clawson cites has found that a person without a college degree born to rich parents is 2.5 times more likely to be wealthy than the college grad who is not born to rich parents. As Ed Schultz puts it, its all about membership in the “lucky sperm club.”
I saw some interesting news in Saturday’s Chicago Sun-Times. First the real winner: Boeing CEO James McNerney received a 20% pay increase, which cashes out to a sweet $27.5 million for 2012. Meanwhile, Ford’s CEO Alan Mulally saw his pay cut by 29%. He will only earn $20.95 million. Before we feel too sorry for poor Mr. Mulally, we should note that he will still receive $680,809 in other compensation that includes a private plane, housing, and security. Most American wish they could get such a pay cut.