The severing of our society into a plutocracy and a peasantry is so far along that statistics almost cease to have meaning. But the facts have to be told, to help explain the sickening sense that we’re becoming a nation without a middle class, paralyzed by the inequality deniers and excuse makers who refuse to admit there’s something wrong with their free-market capitalist system. The extremes are becoming almost intolerable.
1. A Broken System of Compensation: The Combined Salaries of 350,000 Pre-School Teachers is Less Than That of Five Hedge Fund Managers
Pre-school teaching may be our nation’s most important job. Numerous studies show that with pre-school, all children achieve more and earn more through adulthood, with the most disadvantaged benefiting the most.
2. Diminishing Support for Society: The 1% Made More from their Investments in 2013 than the Entire Cost of Social Security, Medicare, Medicaid, and the Safety Net
That is far more than the budget for Social Security ($860 billion), Medicare ($524 billion), Medicaid ($304 billion), and the entire safety net ($286 billion for SNAP, WIC [Women, Infants, Children], Child Nutrition, Earned Income Tax Credit, Supplemental Security Income, Temporary Assistance for Needy Families, and Housing).
3. Capital’s Long-Term Dominance of Labor: Since 1900, a Dollar of Labor has Grown to $127, a Dollar of Stocks to $1,247
There’s a good reason why the super-rich are cleaning up in the stock market. Thomas Piketty explains that, barring war or depression, the return on capital far outpaces economic growth, causing average workers without a stock portfolio to drop further and further behind. A look at stock market growth over 114 years (Page 60) confirms that a dollar of capital is now worth ten times more than a dollar of labor value.
4. The Walmartization of America: A Few Super-Rich at the Top, then Everyone Else
Just like at Walmart, a few big moneymakers are ruling over a great majority of increasingly low-income workers. Low-wage jobs ($7.69 to $13.83 per hour) made up 1/5 of the jobs lost to the recession, but accounted for nearly 3/5 of the jobs regained during the recovery. And it’s getting worse. Nine out of ten of the fastest-growing occupations are considered low-wage, generally not requiring a college degree.
The descent into Walmart-like employment is disproportionately hurting minorities. In 2013, an astonishing 55.9 percent of employed black recent college graduates were underemployed, working in an occupation that typically does not require a four-year college degree.
At the other end of the Walmartization, families in the top 5% made anywhere from$300,000 to $40 million — in just one year.
5. Toward Third-World Status: Our Shrinking Middle Class Gets a Smaller Cut of National Wealth than Anywhere except China and India
From a global perspective, we’re becoming the type of country that we used to dismiss as “third-world.” Among developed and fast-rising nations only the middle classes of China and India get a smaller cut of their country’s wealth than in the United States. Both of them are rapidly catching up to us.
Thomas Piketty recommends a global wealth tax to help reverse inequality. But a financial transaction tax (also called speculation tax or Robin Hood tax) would be easier to implement, more efficiently regulated, and a source of massive revenues at little cost to financial traders.
Whatever method we choose, progressive thinkers in the U.S. and around the world will need to unite on a single cause, much as the Tea Party did in its crusade against government. We can’t afford to disagree among ourselves as paralysis sets in.