AC Alert for December 5, 2011 New Hot Topic: Focus on Risks of Wealth and Income Gap
These stories may be familiar to you: Larry, a highly-skilled carpenter by trade, has a real hard time believing that the recession is over. He gave up looking for a job some time ago. Now that he is over 60 years old, being unemployed (and perhaps in fact un-employable) is not a fun place to be to be these days. He and his wife, Grace are scraping by -- but they face the reality of possibly losing their home in the next year or two if he can't find a decent paying job. The couple have long considered themselves to be among the American middle class…now, the future seems so uncertain.
Across the street, his neighbor Ted has just moved in to a custom-built 4-bedroom colonial. Ted's only a few years younger than Larry -- but he's had the good fortune of working in the corporate law office for a major company since 1995 and his portfolio is in very good shape. Even with the economic slowdown, there should be a nice bonus at year-end.
As each family approaches the holiday season, the income and wealth divide between them couldn't be more pronounced. And so the story goes, across the nation – this is the “divide,” a fact of life in America today, and not just the basis of political rhetoric.
The issues and events represented in the broadening public discussions about “wealth and income disparities” or the “wealth divide” or the “1% and the 99%” or the “Occupy” protests are certainly on the minds of many of our citizens like Larry and Ted. These are not new issues, but for many Americans the continuing Great Recession has been intensifying the troubling aspects of income inequality and certainly the obvious wealth inequality that exists in the USA today.
Your AC editors and researchers monitor thousands of news and commentary streams each day, and we've been watching how the wealthy and income divide has become a public debate and policy issue of increasing concern and controversy. When we see an emerging issue like this gaining momentum, we assemble the content into a special “Hot Topic” for easy access. Based upon recent developments, including the highly publicized Occupy Wall Street Movement of the past several months, we believe that the growing wealth and income gap in our nation, and indeed the entire world, warrants a separate Hot Topic designation.
The essence of the American Dream has been about the assurance of equal access to quality education, the enjoyment of a good income, access to affordable healthcare, and the means to acquire a home of one’s own. These have been the traditional pathways to building personal and family wealth at least since the years of the Great Depression.
In the “Era of Prosperity,” after World War II, as author Robert Reich describes the time, the American middle class emerged in great numbers. Thanks to equal access to credit and capital, steadily increasing wage levels for workers, and reasonably-priced housing and durable goods, and the attaining of higher levels of education, among other things, each generation could expect to be better off than the previous. Until now. Today, we learn, more than half of recent college grads are unemployed. Hundreds of thousands of older workers have given up looking for a job.
For a variety of reasons, what most Americans believed to be “financial fairness” for a rising middle class has been fading away, especially since the financial sector crisis of 2008-2009. This is the reality, and the perceptions of many people. Unemployment has only recently dropped below at the 9% level and many Americans are under-employed, working two jobs, or out of work for so long that they have given up on finding a job, leading to more financial stress on millions of families.
This reality of diminishing economic returns is not about income or wealth re-distribution, or pursuing socialist or left-leaning political ideologies or policies, or hatching schemes to tax the rich, or “wealth transfer” schemes. This is about both the reality and perception of financial fairness and equity, and equal access to economic opportunity, which many middle-class and low-to-moderate income earners now believe is no longer the American Dream for them. This is a potentially dangerous social condition and one that our policymakers – or the fortunate affluent and wealthy -- should not ignore.
There is now abundant news & commentary about the income and wealth divide in the United States, as well as a growing gap between rich and poor in many other countries. We are bringing you the highlights of this issue in this Hot Topic because we believe that everyone should be tuned in to this critical social issue, which threatens the well-being of the nation, and individuals in all socio-economic categories. Just sampling some of these recent excerpts:
‘Occupy’ Protesters Evicted in Two Cities
(Source: New York Times) The near-simultaneous action against Occupy protests in Los Angeles and Philadelphia, after protests in places like New York, Oakland, Detroit and St. Louis were shut down, is the latest evidence that the nationwide movement — or, at least, the encampment portion of it — may be slowly coming to an end.
Occupy protests cost nation’s cities at least $13M
(Source: KAAL TV) During the first two months of the nationwide Occupy protests, the movement that is demanding more out of the wealthiest Americans cost local taxpayers at least $13 million in police overtime and other municipal services, according to a survey by Associated Press. The heaviest financial burden has fallen upon law enforcement agencies tasked with monitoring marches and evicting protesters from outdoor camps.
Business must address wealth gap, Chrysler CEO says
(Source: Financial Post) Chrysler CEO Sergio Marchionne told business leaders this week that they have a moral responsibility to address the growing income disparity between the rich and poor that is at the heart of the current Occupy Wall Street movement by curtailing excessive executive compensation and corporate greed.
GOP: Charge wealthy more for Medicare to cover payroll tax extension
(Source: Los Angeles Times) The GOP has offered an alternative proposal for funding an extension of the lower payroll tax that would not tax millionaires to pay for it, but instead require those earning beyond $1 million to pay full price for Medicare.
Government aid helps to trim poverty rate
(Source: Market Watch) Various forms of government support kept millions of people out of poverty last year, even as the rate of poverty rose. According to the Census Bureau there were 49 million poor people in 2010, or a national poverty rate of 16%. In 2009 there were about 46 million in poverty, a rate of 15.3%.
The Divide – Danger Ahead
(Source: Hank Boerner) The editors offer some compelling thoughts about the growing income divide, and the impact it may have on our nation and the world.
Will income inequality get even worse?
(Source: Christian Science Monitor) Commentator Jared Bernstein believes that the forces driving inequality in America remain alive and well and that the income gap may get worse.
A Banker Speaks, With Regrets
(Source: New York Times) Op-Ed Columnist Nicholas D. Kristof offers a chilling summary of comments by a former banker, pertaining to the manner in which mortgages were doled out just prior to the recession.
Solutions to these issues are not easy, or simple, or something government can prescribe. All Americans of all walks of life, and our institutions, have to address the issues – and some of us will have to give a little to get the country back on track. We especially cannot afford to lose the Millennial Generation (born 1975-2000) – the young people who seek the opportunities that their parents and grandparents enjoyed, and who will be our future leaders in business, the arts, education, and other pursuits of our society.
AC editors have been focused on the issues surrounding the income and wealth divide for some time. The new Hot Topic is being added to Accountability Central as the issues continue to gain momentum. We will also be offering commentary in a running series, “The Divide – Danger Ahead.” As always we welcome your comments. Send them to firstname.lastname@example.org
Add your voice to this important public dialogue – what are your thoughts on the income and wealth divide in America? Are there short- and longer-term fixes that you would like to suggest?
Send your comments to: email@example.com
This is just a sampling of the information in our Accountability-Central.com Alert. Go here for the full text of this alert, and more information on Sustainability, and other Accountability related topics.