The 1 Percent and the Rest of Us
It’s a cliché: a picture is worth a thousand words. These charts are probably worth millions. They depict the degree to which the economy of the United States has become one of haves (about 1 percent of the population) and have-nots (the rest of us).
As of the end of 2012, corporate profits in the United States as a percent of GDP were at an all-time high, while wages, evaluated by that same metric, hit an all-time low.
Many economists are concerned about all this. For example, Paul Krugman says that regardless of evidence of economic growth overall, high levels of inequality in income suppress middle-class wages and produce economic instability. Kathleen Geier points out that inequality is also potentially destructive to our nation’s social fabric, since the money gap greatly exacerbates political and institutional problems. That conclusion is supported by the premise that we have become a credit-driven economy, or, as some have put it, a House of Cards.
Let’s add another chart, and its accompanying statement.
There are lots and lots of reasons to oppose high and rising income inequality. Maybe its effect on economic growth is one of them. [But] aside from the self-interest of the rich, there are no longer any real arguments for favoring or ignoring rising income inequality. The fact that this is now so widely accepted - well, that's kind of amazing, isn't it?
Amazing indeed, and about time.
Michele Petrovsky, Webmaster at Tools4Change Author of, Cathedral or Bazaar? Fix Higher Education – Teach by the Seat of Your Pants , Donkey Dharma, and Quick Guide to Linux Glen Mills, Pa.
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