American Ignorance of Economic Inequality Is Marginalizing the Middle Class

I think I better understand why so many people vote Republican now. The average American is projecting an economic vision of American that is fantastically, horrifyingly wrong.

 

Haha the ideal is funny because we're nowhere near that :(

that top 1% definitely earned 50% of the nation's wealth the hard way, through rugged individualism and capitalist entrepreneurship. and apple pie

 

This study cites other works that estimate the income disparity may be so bad, that 1% of the nation’s population controls 50% of its wealth (Davies, Sandstrom, Shorrocks, & Wolff, 2009; Keister, 2000; Wolff, 2002).

The results of the study that are shown in the graph is solid. Out of a list of 1 million Americans, roughly 5,500 were randomly chose. Their median income is close to the national average ($45,000 to the national $48,000). I think it’s important to go over medians vs. averages. The median is the middle set of numbers out of a population. and the average is the numerical sum divided by the population’s quantity. So if four guys make $1 and one guy makes $999,996, the median is still $1 but the average is $200,000. Since only 20% of the population makes over the average, this population would be pretty unequal, yeah?

Anyway, politically the sample is the national norm. So they’re normal Americans with normal American views, as best as they can be defined. And they failed to grasp the reality of their nation’s economy, in totality.

The difference in American wealth inequality has probably never been as stark. Wealth inequality is certainly the highest since the Great Depression. The y-axis below describes the share of national wealth of the top 10%. Please compare the glaringly different historical norm to today. During the prime years of America’s “Greatest Generation”, the largest share the top decile controlled only 30%. It’s now estimated that the top 1% controls as much as 50% of the wealth.

 

 

Top Decile's Share of US Wealth

 

Why this is bad is fairly obvious. If wealth is highly concentrated, it’s harder for the median middle class (as opposed to the middle class derived from an averaged income) to get their kids into good colleges, adequately save for retirement, or influence their elected officials. It’s been strongly documented that the non-wealthy have almost no chance of influencing their elected politicians if the non-wealthy favor a policy and the rich don’t. I wrote about this. It’s time to wake up and realize the American glory days had a very different economic reality, one where the wealthy were less wealthy and the poor were less poor. And more people were better off and able to influence their politicians.

Many of us are being left behind, and increasingly marginalized by politicians that prefer the rich by a factor of 3 to 1. It’s due, very likely, to imbalanced economic inequalities. Is this a trend you want to continue for you and your children? Because let me tell you, you’re not likely to be benefiting from it. And if you are, you probably won’t be soon enough.

 

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3 Responses to American Ignorance of Economic Inequality Is Marginalizing the Middle Class

  1. MoreEqualWorksBetter says:

    “If wealth is highly concentrated, it’s harder for the median middle class (as opposed to the middle class derived from an averaged income) to get their kids into good colleges, adequately save for retirement, or influence their elected officials.”

    The effects of inequality are even more systemic than this. Evidence is mounting that it impacts GDP, savings rates, homicide rates, HS dropout rates and the strength of democracy as well. See how it effects the US and your pay here: http://www.trickler.org

  2. dcskeptic says:

    This is fantastic! It really shows how inequality has affected income. Thanks.

  3. Re American inequality
    My hypothesis (as I am from New Zealand) is that America is following similar policies to that in NZ – a major difference though is that while NZ discriminates on the grounds of social status at birth (see UK social class discrimination) the US discriminates re socio-economic status (wealth) but the latter has its origins not in the Corporations but rather the bureaucracy. NZ, the US and many other States are ‘going nowhere’ – ‘freedom and democracy’ is now going in reverse as more countries are becoming authoritarian. Who is going to take risks when countries are going nowhere and in fact there seems to be increasing internal conflict. There are a number in the establishment who know what the problem is but are too afraid to ‘speak out’ about it. While I can only be specific re NZ I think many States have a similar problem. Essentially, NZ’s problem is that there are many human rights omissions in our human rights law (the source is the global elites at the UN who design these instruments) – so it is not just our fault – but it highly favors the countries ‘sacred cows’ and for obvious reasons people do not want to discuss it. Much can be found in my book, ‘Freedom from our social prisons: the rise of economic, social and cultural rights’, Lexington Books, which is on the UN portal website despite my harsh criticism of the UN. I think the US should look at what is happening to small/med business (see the American Small Business League website and how federal contracts are been diverted to big business on a massive scale). In NZ I am promoting a radical, ideas-driven bottom-up development (an entrepreneurial/ethical human rights culture) which is part of the ethical approach I take to human rights, development and globalization but because it really shakes the status quo and people will only face the truth as a last possible resort they simply do not want to know – its far too unsafe. But this is very short, sighted better to go through the suffering of facing the truth and making changes than having it forced on us very likely after enormous people damage. I am Anthony Ravlich, Chairperson of the Human Rights Council Inc (New Zealand) ph: (0064) (09) 940 9658. And remember, the truth will set you free as long as you are not too afraid to be free and so too afraid of the truth.

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