July 3, 2006

• props where props are due> this post is mostly composed of the editorial of Mortimer B. Zuckerman, Editor-in-Chief of US News & World Report, June 12, 2006 issue

  
  

  The hard reality is that it is no longer possible for more than a very small minority to start out poor, work hard, and become well off... The generation that emerged from World War II enjoyed income growth fairly evenly spread throughout our entire population.  The past 25 years tell an utterly different story.  Median family incomes have risen by less than 1 percent a year - for a total of 18 percent overall - but median incomes for the top 1 percent have gone up more than 10 times faster - by an astounding 200 percent!  From 1980 to 2004, our GDP (gross domestic product) rose by almost two thirds, but when you factor in inflation, the wages of the typical earner actually fell... Among the top 20 percent of American earners, real incomes increased by 59 percent. 

  
  

  And there is no sign that the trend is moderating.  This year the top 10 percent of wage earners are projected to receive 45 percent of all household cash income, up from 40.6 percent in 2000.  And what about the average family in the 80 percent of the workforce who make up our rank and file?  Incomes are actually slightly lower, after adjusting for inflation, than they were four years ago… those Americans have effectively taken a pay cut since 2002 even though the economy has been growing by over 3% per year.  Except for a few years in the late 1990s, the hourly pay of most workers has done no better than inflation for the past 30 years. 

  
  

  The gap between the ostentatious new rich and the rest of America is growing fast.  Twenty-five years ago, the top fifth of all American households’ post-tax incomes were 6.7 times those of the bottom fifth.  Today, that ratio has jumped to 9.8 times – nearly a 50% increase.  The result? 37 million Americans living below the poverty line in 2004, but an additional 54 million were the ‘near poor’…

  
  

  If we look at net worth, as distinct from income, the growing inequality is equally manifest.  Some 85% of the nations’ wealth now resides in the hands of the richest 15% of American families.  The bottom 50% of families, on the other hand, claim only 2.5% of household net worth… The average net worth of the richest 10% of American families rose to $861,000 last year, a 6.5% increase over 2001.  What happened to the typical family in the bottom 25%? Net worth actually fell by 1.5%.

  
  

  Our tax system has become much less progressive, enabling families in the top decile to benefit, and especially the top families within the top… Taxes for the well-to-do are lower today than they have been in 60 years.  It is role reversal for Robin Hood: We are robbing the poor to enrich the rich. 

  
  

  "If there is among you anyone in need, a member of your community in any of your towns within the land that the LORD your God is giving you, do not be hard-hearted or tight-fisted toward your need neighbor. You should rather open your hand, willingly lending enough to meet the need, whatever it might be....Give liberally, and be ungrudging when you do so, for on this accoutn the LORD your God will bless you in all your work and in all that you undertake.  Since there will never cease to be some in need on the earth, I therefore command you, 'Open your hand to the poor and needy neighbor in your land.'"   Deuteronomy 15:7-8, 10-11

  
  

   

  • 12:22 am
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