I that growth of $59 was equaled 1 inch on the chart, then the growth of the top 10% ($116,071) would equal 163 feet, the growth in income of the top 1% ($628,817) would equal 884 feet, and the income growth of the top 0.01% ($18,362,740) would equal a chart length of 4.9 miles. Put another way, the income growth of the top 10% grew 1,967 times as much as the income growth of the bottom 90% -- while income growth for the top 1% was 10,658 times as much, and the growth for the top 0.01% was 311,233 times as much.
Seeing this graphic representation of the income growth of the bottom 90% compared to the income growth of the richest Americans (especially the top 1% and above), it should be easy to see how the vast gap in income and wealth in America has become a reality -- making income and wealth inequality in the United States even worse that that of many third world countries. And it is still getting worse -- not better. It is not improving because the conditions that caused it have yet to be corrected.
What are those causal conditions? Here are some of the most egregious:
* The minimum wage has been allowed to drop significantly in buying power. In today's dollars, the minimum wage had the buying power in 1968 of about $10.50 an hour. To day it is only $7.25 an hour.
* Companies no longer share the gains in productivity with workers, but keep all of the gains for themselves. Worker wages have been stagnant, while the income of owners (and top management) have increased by more than 270%.
* Tax policies (instituted by Republicans -- mainly Reagan and Bush II) have favored the rich, and results in the richest Americans paying less in tax percentage than most middle class Americans. One of the main causes of this tax inequality is the special tax rate for investment income (lowered to 15% by Bush & raised to 20% by Obama last December) -- much lower than the approximately 39% rate that would be paid if all income was taxed as earned income (which is the income type that most Americans must declare as their taxable income).
There are easy fixes for all these problems, but our elected representatives either act to protect their own wealth (and that of their Wall Street buddies) or don't have the political courage to oppose the dictates of Wall Street and the giant corporations. If our elected representatives represented the people rather than the rich, they would:
1. Restore the buying power of the minimum wage by raising it to at least $10 an hour, and make sure it doesn't continue to lose buying power in the future by tying it to the rate of inflation.
2. Strengthen unions and makes it easier for employees to form new unions. This would give workers the power to bargain for an increase in wages as a part of the increase in productivity, thus ending wage stagnation.
3. Abolish taxing investment income at a lower rate than earned income. Tax all income at the earned income rate.
4. Do away with government subsidies for giant corporations, and make sure the corporations pay their appropriate share of taxes. Stop corporate tax breaks for outsourcing American jobs to other countries. And make American corporations pay taxes on the profits they are hiding off-shore.
Do we really want to live in a giant third world country, with a disappearing middle class -- and a wealth inequality worse than that of much poorer countries? We are still the richest nation on Earth, but most of that wealth is not being shared -- but hogged by the richest 1%. That must be stopped, because it is killing the American dream for most Americans. Here are a couple more facts showing that to be true:
* Between 1966 and 2011, the bottom 90% of Americans saw their share of national income shrink from 66.3% to 51.8% (from about two-thirds to about half).
* Between 1980 and 2005, more than 80% of the national increase in income went to the top 1%.
That is just so wrong. Call it class warfare or income redistribution if you want, but it's time to restore some economic justice to our economy!