An updated report on growing income inequality between America’s profit makers and profit takers shows the growth of income for the profit takers – the top ONE%, who are making at least $394,000/year for 2012. The table below shows how much of the nation’s income went to the top ONE% during economic recoveries.
- 1973 Low - 7.7%
- Clinton Expansion - 45.0%
- Bush II Expansion - 65.0%
- Recession Recovery - 95.0%
Figure 2 – Decomposing the Top Decile US Income Share into 3 Groups, 1913-2012
Many factors contributed to this income shift and I discuss those in other postings. Here is a partial list:
- Excessive corporate and wealthy individual tax cuts since the 1980s
- Wage theft as savings from productivity increases by millions of profit makers were transferred to hundreds of profit takers who stashed the cash in banks instead of paying the profit makers their due
- Increased profit maker debt by borrowing their stolen wages from the banks stuffed by the profit takers
- Increasing the number of profit makers in the work force by adding women to help make up for the loss in stolen wages
- Competition from overseas as countries recover from destruction of WW II
- Removing the regulations put in place after the last profit taker excesses
- Recessions instigated by the profit takers to increase their opportunities for corporate welfare and takeover of public functions (privatization) for profit
- Replacing representative governance with corporate governance (The Powell Memo of 1971 and Citizens United decision of 2010)
- Changing corporate bankruptcy and labor relations laws to let corporations steal pension funds and break private unions
- Bankrupting public infrastructure through tax breaks for corporations to kill public unions, their pensions, and funding of public schools
- Acceptance of the Ayn Randian world view which emphasises greed and rugged individualism over the equal protection and empowerment of all citizens
- Tax laws that favor investment income over earned income
One thing that will help reverse this trend is participating in the democratic process – vote the ONE% and their bedfellows out. We can also reverse all the legislation that favors the ONE%, and overturn the Citizens United decision.