I don’t often write about income equality and politics in this blog, even though my inital degree was in Political Science I prefer to stick to Urban issues that are a little more lite and friendly then things like economic inequality and the division of wealth, these topics tend to be divisive and are often better left to the many political blogs out there. Today however, a news article came across my desk today that made me rethink my decision to ignore these topics given that the economic vitality of our cities is directly tied in with income distribution and the ability of a cities citizens to spend money. If the stratification between income classes is too far apart then, and the majority of a city’s residents don’t have access to capital, then the social order tends to break down.
Anyway the information I am talking about comes by way of an opinion piece in the New York Times Titled A Hedge Fund Republic,
It turns out that in the United States in United States the income equality between different classes of citizens is worse then in most so called banana republics. It turns out that the US is on par with, if not worse than Nicaragua, Venezuela and Guyana. While this is a pretty strong statement its the statistics behind the statement hat make a more compelling argument.
Let’s compare the United States in Argentina and consult the statistics, in the 1940s the top 1% of Argentina controlled 20% of the country’s net income versus the United States where the top 1% controlled only about 10% of the national income. Most of the wealth was concentrated in a small percentage of the population and this would later assist Juan Peron in his populist rise to power in 1946.
Now fast forward those statistics to today or rather 2007 ( the most recent years to which the data is available). In Argentina the top 1% has reduced its share of the pie down to 15% of net income whereas in the United States the top 1% has now gained control of approximately 34% of America’s private net worth. To further illustrate the disparity of wealth one only needs to expand the statistics from the top 1 percent to the top 10% and you end up with a situation where 10% of America owns 71% of Americans’ total net worth. Leaving with 90% of the country with only 29% of net worth.
The times article goes on to further discuss why the supporters of the republican party who fall in that 90% are absolutely insane for letting the party convince them that it is necessary for health of the American economy to keep the bush cuts going, but I will let the New York Times finish that story as they do a much better job. Read the rest at the New York Times