Feeling the Pinch? Income Inequality in the U.S. Continues to Skyrocket

Inconvenient truth: “Income inequality” is real, and it’s getting worse

Income inequality in the U.S. is getting a lot of attention lately, and for good reason. It is skyrocketing, with the top 1% now making over 40 times what the average person makes. The average income in 2012 for the bottom 90% in the U.S. was $30,997, while for the top 1% it was $1,264,064 (figures include capital gains for both).

Income Inequality in the U.S.
Graphic generated by app at The World Top Incomes Database site.

In 1981, when Reagan took office, the ratio was 13.8 to 1, with the top 1% making $449,989 to the bottom 90%’s $32,672. Since then, the change has been quite dramatic, as you can see.

Perhaps if the middle class was still as comfortable as it was in its heyday, people wouldn’t mind so much. But it’s quite a slap in the face to be far more productive, as workers are now, and yet not share in the increased wealth.

And when Wall Street banksters are allowed to speculate wildly with the country’s wealth and tank the economy as they did at the end of Bush’s term, and get bailed out while the rest of us suffer, well, let’s just say that gets even the easily-distracted American people’s attention.

The middle class continues to shrink dramatically, as they are forced to pay for the sins of the greedy. Meanwhile, the ultra-rich are getting ever-more powerful politically, which makes this sad state of affairs even more difficult to change. They now pretty much own congress and the office of the president, and for the most part, they get their way.

We need a new way forward. Unfettered capitalism is not working, except for the fat cats on top. Staggering income inequality is destroying our way of life, and in the end, perhaps life itself, what with the environmental destruction and global climate change it is causing.

“The Case for Market Socialism” by Allan Goldstein makes an interesting proposal. In it, Goldstein says:

The markets are not some heavenly ordained thing, created perfect and whole from the day of conception. The markets, capitalism and economics are human constructs… We made the markets; we can change them.

Market socialism seeks to change the rules… It lets the markets be the markets. But it sets some parameters. Work cannot equal poverty; every job must pay a living wage. Market Socialism demands that every law, every tax and every regulation for our economy be written with two goals in mind. Create all the wealth we can, and spread it around as widely as possible.

Let’s not be afraid to look at new ways of doing things. In fact, it’s imperative for our survival to do so.

 

James Israel
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