Income Inequality

Income Inequality Continues to Grow

Income InequalityFor the first time in US history we have a generation living under worse economic conditions than the prior generation. The negative effects of this are being felt throughout our society, with one notable exception: the capitalist class. Throughout the former and current terms of the last two Presidents — one a Republican and the other a Democrat — this privileged class has enjoyed massive increases in wealth, even during the Great Recession. Meanwhile, the working class has had the opposite experience, suffering from the crisis to its fullest extent.

But it would be naïve to think these problems are the result of actions taken only during the last decade. The current trend towards skyrocketing inequality started with the Reagan administration in 1981, and this was due to the tax and economic policies enacted at that time and largely upheld throughout the last thirty years. While the outcome isn’t surprising, the extent of the damage to society may: economic inequality has risen over this period to a greater extent than at any previous time in recorded US history.

The accompanying graph clearly shows the disproportionate increase in income by the top 1 percent income earners in the United States starting in 1979 and ending in 2007, and combines the bottom 60% earners as represented by the lowest and flattest line in the graph. While this is in itself a stark contrast, it is even more-so when pulling data for the bottom 20% earners and then combining that information with dollar figures adjusted to 2005 levels. In 1979, the bottom 20% income earners made an average of $14,500. By 2005 that average had increased $15,500 — an increase of a mere $1,000 in almost a 30 year period. The middle 60% (as opposed to the bottom 60% shown in the graph) started in 1979 at $42,000 and reached $51,000 by 2005 — a more substantial but still modest increase of just $9,000 over the same period.

But the top 1% started 1979 with an average income of $325,000, and by 2005, that same group had an average income of $1.1 million. This represents an increase in income of almost 340%.

While the trend is obvious given this 30 year time frame, the largest increase in income for the top 1% has come during the last decade. This first substantial increase occurred when generous tax cuts were implemented for the rich, and then later through multiple government bailouts to the financial firms largely responsible for the latest economic crisis. Both the Republicans under Bush and the Democrats under Obama share the blame for this.

In 2010 alone the top 400 wealth holders in the US increased their already substantial wealth by 8%. This constitutes $1.37 trillion dollars, or 2.6 percent of the total private wealth in the entire country. According to the Social Security Administration, 1 in every 34 wage earners in 2008 went without earning anything in 2009. What this shows us is that during economic recessions the working class is exploited to an even greater extent than normal, and when an economic upswing finally begins to occur it is felt primarily — and almost exclusively — by the most wealthy segment of society.

This is all evidence that our current economic system does not “reward success” or “hard work” as some would have us believe. It is a slap in the face to the entire working class to claim that top income earners have put themselves in their inflated position of resource and wealth accumulation through their extraordinary hard work and diligence — as if the average worker doesn’t know what “hard work” really is!

The truth is that hard work and diligence did put this wealthy group of individuals into their elevated position — the collective work performed by the working class! Our economic system primarily rewards taking advantage of the already disadvantaged, and those who excel the most at this fundamentally anti-social behavior are rewarded handsomely for their efforts. With the resources gained through this method, the capitalists are able to work within our current government to create and enforce  programs and laws which serve to benefit their class at the expense of everyone else. This relatively small section of our society increasingly feels entitled to any and every thing our society collectively produces. However, they have the means to guarantee a certain longevity to this system only so long as there is an absence of any meaningful, organized opposition.

That opposition will never be successful if it remains within the limits of the two capitalist political parties. Until we begin building a real alternative to these political parties, we will continue to alternate between them as one side of the political coin is blamed more than the other for our ever growing socio-economic problems.

A majority of Americans are fed up with this cycle in US politics, and we feel it is time to bring it to a stop by building a mass political party that answers to the working class. This why we have helped to launch the Campaign for a Mass Party of Labor (CMPL). We know that any attempt at building such an organization must have the above fundamental goals as part of its platform as well as the active participation and support from the unions and a large segment of society.

If you would like to help the CMPL build support for this perspective in your local area, visit the CMPL website at and join the campaign.


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