The Increasingly Unequal States of America

January 29, 2015 11:30am by

The Increasingly Unequal States of America

Source: EPI

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  1. rd commented on Jan 29

    It worked well for us in the 1920s. It is good to see that we are bringing inequality back to recreate that outcome.

    • willid3 commented on Jan 29

      well maybe they aiming for 1800s levels?

  2. Whammer commented on Jan 29

    This chart is a little different from the one that was in the Economist fairly recently, but the general point is still the same. For a long time, the income share of the top 1% was around 10%. Now it is more than 20%, and the defenders of the current distribution pretend like it is the only way it can be, and that any change would be a disaster. It’s goofy and stupid.

  4. Whammer commented on Jan 29

    The lucky sperm club is tough to beat!!

  5. pekoe commented on Jan 29

    I think it may be worse than the graph depicts because of changes in the funding of retirement. In the post WWII era many workers had pensions where the funding and risk was borne by the employer. With the Reagan revolution, 401K type pensions replaced traditional pension systems where the majority of the funding will come from the worker if they participate and bumpkis income if they do not. Income charts like this may not reflect this change as well as other structural changes in the last few decades that are unfavorable to labor.

    • willid3 commented on Jan 29

      well its also possible for those who did participate to be in a world of hurt too. just retire at the wrong time, like say 2008?

    • rd commented on Jan 30

      401ks were created in the 1974 ERISA legislation. The number of people covered by pensions peaked in 1979. The inflation and recession in the early 80s began the trend of companies moving away from providing pensions. At the peak, only half the full-time workers in the private sector were covered by pensions, so it is a myth that most workers were covered by pensions for a number of decades: http://www.ssa.gov/policy/docs/ssb/v44n7/v44n7p3.pdf

      Private pensions were largely an artifact of the post-WW II period and in general were unsustainable. A major issue is that you had to stay at one company for a long time (20 years+) to see significant benefits. In many cases, losing one’s job meant losing both health insurance and retirement funds. 401ks provided more portability.

      The biggest issue with the 401ks is that companies usually do not fund them to the same extent they funded pensions with a typical range of 3%-6% matches of employee contributions. A 3% match is significantly lower than what they typically had to put in their pension plans. If companies put in 6% to 10% into 401ks, then the whole issue of retirement funding largely goes away if the employee puts in some nominal percentage like 3%-6% as well.http://www.ehow.com/info_8444082_percent-match-typical-401k.html

  6. tagyoureit commented on Jan 29

    Zounds! What happened in 1980? Good to see the 1% back at their “natural rate.” I’m looking foward to 16 hour work days and relaxed child labor laws (in foreign countries of course, not here in the USA).

    <:o)

  7. A commented on Jan 30

    The easiest way to understand why the disparity is growing, is to go to the other side of the desk, and look back at what the other 99% is doing.

  8. NoKidding commented on Jan 30

    If two people maintain equal income for their entire lives, but one saves and reinvests even one percent, the saver/investor finishes richer.

    If they start with unequal income, and the higher income saves and invests some portion, the wealth diverges a lot.

    If the pattern persists across a few generations …

    Increasing wealth gap is a natural thing, I would say a good thing, so long as the standard of living increases steadily for the bottom percentiles. In the 1920’s the bottom quarter didn’t have cell phones, computers, cars, clothes washing machines, dish washers, comfortable sneakers, three sets of clothes, enough calories for obesity and diabetes,…

    If the richest man in the world has more money than every other human combined, good for him. I’d like the 2025 Ford Fiesta to drive like a 2010 BMW 3series please. And it probably will.

    • noncist commented on Jan 30

      Agreed,

      Historically, regimes of high monetary inequality often broke down with periods of large-scale warfare. If humanity has broken out of that cycle, ever-increasing inequality is a small price to pay.

      We should be more focused on eliminating barriers and helping the people on the bottom than moaning about the rich getting richer.

  9. Denis Drew commented on Jan 30

    The first step on the way back — to economic and political equality — no kidding:

    The ultimate – federally prosecutable — sweetheart labor contract may be no contract at all.

    No one would doubt the criminality of a mob union boss and/or an employer threatening to fire workers for speaking out against a mobbed-up sweetheart contract – in order to obtain for themselves the pay and benefit moneys that might otherwise have gone to employees through fair bargaining practices. A for certain RICO or Hobbs Act target.
    http://ricoact.com/

    Why shouldn’t the exact same extortionate activity be view in the exact same extortionate light when union busting “consultants” and ownership threaten to strip away workers’ economic livelihoods should they dare to participate in a federally approved path to establish federally approved union bargaining rights?
    US Attorneys — Criminal Resource Manual 2403
    http://www.justice.gov/usao/eousa/foia_reading_room/usam/title9/crm02403.htm

    In current (virtually universal) practice this economically — and by extension politically — ruinous extortion is “punished” only under administrative law laid down by the National Labor Relations Board — and employers found guilty pay only a (usually small) compensation for lost wages (not a penalty).

    Alternate route: if any state independently outlaws this form of labor market extortion with a penalty of at least one year in prison, federal prosecution can automatically step in.

  10. ralphwl commented on Jan 30

    Not sure equality can ever be a goal in and of itself. Better to look at a weighted measure to see how far we are from the next revolution…..

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