A new study by five economists, including one from the U.S. Treasury and two from the Federal Reserve,concludes that the rich became permanently richer and the poor permanently poorer from 1987 to 2009. The deepening divide between rich and poor in the US is spread across the whole lifetime of workers.
“This is even more reason to worry about inequality. It’s not just year to year ups and downs that have gotten worse. It’s actually the rich are getting richer and staying richer. The poor, [getting] poorer and staying poorer,’’ explained Justin Wolfers, co-editor of the Brookings Papers on Economic Activity, which published the new study.
Nearly five years after the financial crash when the stock market lost more than half its value, the big corporations are enjoying profits that are at their all-time record level. Earlier this month the Dow - the supposed blue-chip barometer of America's fiscal health - bulled through its 2007 closing high of 14,164 and kept going higher. No doubt champagne corks popped in some board-rooms of corporations that have stashed away an astonishing $1.45 trillion in cash - more than half of that overseas - while average CEO pay continued to rise, even during the bleakest years of the economic crisis. But for many workers it was a side-show.
"I could care less," said Tracy Mulvehill, of Northeast Philly, 50 and unemployed for the past year, when asked about the upbeat reports from Wall Street and of a gradual recovery in the job market. "It doesn't pay my bills." Mulvehill will see their long-term unemployment benefits slashed by nearly 11 percent in 10 days, and she's busy calculating how she'll live with an additional $200 less every month. "Now I've dropped my Internet," she said, "and for all my other bills I'm going to have to rob Peter to pay Paul one month, and the next month I'll rob Paul to pay Peter."
The children of lower-income parents are ever more likely to become, in turn, the parents of lower-income children. It has become much harder to make a living without a college degree. Right-wing conservatives say that men have become “less industrious.” But it is much more plausible that in the working world there is just less and less use for these folks. Employers have downsized and have discovered they can get by with fewer employees. Employers can take advantage of intractably high unemployment to keep wages at depressed levels. This period of high unemployment is basically undermining the bargaining power of the typical worker. And labor unions that may have struck for higher pay in the 1950s or 1960s have been weakened and are unable to exert any strength.
According to Nobel Prize-winning economist Joseph Stiglitz, “The upper 1 percent of Americans are now taking in nearly a quarter of the nation’s income every year” and control 40 percent of the nation’s total wealth. The bottom 80 percent of Americans own just 7 percent of the nation’s wealth and Stiglitz notes that “while the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall.”
The phrase “class war” is appropriate and accurate. The capitalist class has declared war upon the poor. They claim business-friendly (read worker-unfriendly) policies are necessary to fix the economy (in their favor). Jared Bernstein, the former top economic adviser to Vice President Joe Biden, said that the bottom line is that the affluent - thanks to favorable tax codes and the long slide in the influence of labor unions - have been crushing the working class, and then accusing anyone who complains about inequity of waging "class warfare." He said "If you're on the side that's winning the class warfare, nobody wants to bring it up,"
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| Workers hung out to dry |
“This is even more reason to worry about inequality. It’s not just year to year ups and downs that have gotten worse. It’s actually the rich are getting richer and staying richer. The poor, [getting] poorer and staying poorer,’’ explained Justin Wolfers, co-editor of the Brookings Papers on Economic Activity, which published the new study.
Nearly five years after the financial crash when the stock market lost more than half its value, the big corporations are enjoying profits that are at their all-time record level. Earlier this month the Dow - the supposed blue-chip barometer of America's fiscal health - bulled through its 2007 closing high of 14,164 and kept going higher. No doubt champagne corks popped in some board-rooms of corporations that have stashed away an astonishing $1.45 trillion in cash - more than half of that overseas - while average CEO pay continued to rise, even during the bleakest years of the economic crisis. But for many workers it was a side-show.
"I could care less," said Tracy Mulvehill, of Northeast Philly, 50 and unemployed for the past year, when asked about the upbeat reports from Wall Street and of a gradual recovery in the job market. "It doesn't pay my bills." Mulvehill will see their long-term unemployment benefits slashed by nearly 11 percent in 10 days, and she's busy calculating how she'll live with an additional $200 less every month. "Now I've dropped my Internet," she said, "and for all my other bills I'm going to have to rob Peter to pay Paul one month, and the next month I'll rob Paul to pay Peter."
The children of lower-income parents are ever more likely to become, in turn, the parents of lower-income children. It has become much harder to make a living without a college degree. Right-wing conservatives say that men have become “less industrious.” But it is much more plausible that in the working world there is just less and less use for these folks. Employers have downsized and have discovered they can get by with fewer employees. Employers can take advantage of intractably high unemployment to keep wages at depressed levels. This period of high unemployment is basically undermining the bargaining power of the typical worker. And labor unions that may have struck for higher pay in the 1950s or 1960s have been weakened and are unable to exert any strength.
According to Nobel Prize-winning economist Joseph Stiglitz, “The upper 1 percent of Americans are now taking in nearly a quarter of the nation’s income every year” and control 40 percent of the nation’s total wealth. The bottom 80 percent of Americans own just 7 percent of the nation’s wealth and Stiglitz notes that “while the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall.”
The phrase “class war” is appropriate and accurate. The capitalist class has declared war upon the poor. They claim business-friendly (read worker-unfriendly) policies are necessary to fix the economy (in their favor). Jared Bernstein, the former top economic adviser to Vice President Joe Biden, said that the bottom line is that the affluent - thanks to favorable tax codes and the long slide in the influence of labor unions - have been crushing the working class, and then accusing anyone who complains about inequity of waging "class warfare." He said "If you're on the side that's winning the class warfare, nobody wants to bring it up,"
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