Is Inequality in America Irreversible? E-Book

Chuck Collins

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: Blackwell Companions to History
• Sprache: Englisch

Seitenzahl: 135

Veröffentlichungsjahr: 2018

Beschreibung

We are living in a time of extreme inequality: America's three richest people now own as much wealth as the bottom half of the population. Although most accept that this is grotesque, many politicians accept it as irreversible. In this book, leading US researcher and activist Chuck Collins succinctly diagnoses the drivers of rampant inequality, arguing that such disparities have their roots in 40 years of the powerful rigging the system in their favor. He proposes a far-reaching policy agenda, analyzes the barriers to progress, and shows how transformative local campaigns can become a national movement for change. This book is a powerful analysis of how the plutocracy sold us a toxic lie, and what we can do to reverse inequality.

Leseprobe

Contents

Cover

Title Page

Copyright

Acknowledgments

Dedication

Introduction

A Front Row Seat to Inequality

Current Inequality Trends

Is Inequality in American Irreversible?

Notes

1 Why Does Inequality Matter? (And Why Is It Happening?)

Why Inequality Matters

Inequality Makes You Sick and Tears Communities Apart

Inequality and Social Mobility, Opportunity, Poverty, and Democracy

What is Causing Inequality to Grow?

Notes

2 What Are the Barriers to Change?

Tale of Two Populisms

Changing the Stories that Hold Inequality in Place

Disrupting Myths of Deservedness

Notes

3 Changing the Rules: Raising Floors, Opening Doors

Raising the Floor

Additional Rule Changes that Raise the Floor

Level the Playing Field: Opening Doors

Democracy Protections, Money and Politics

Notes

4 Reducing the Concentration of Wealth

Progressive Taxation

Reforming CEO Pay and Corporate Incentive Systems

Anti-Trust Policy to Reduce Corporate Concentration

The Hidden Wealth Problem

Fixing the Hidden Wealth Problem

Notes

5 Transformative Campaigns to Change the Future

Four Transformative Campaigns

Everyone Gets a Home Before Government Subsidizes Second Homes

Debt Free Higher Education for All, Funded by Wealth Taxation

Save the Planet and Create Good Jobs

Universal Basic Income Funded by Commonwealth Funds

Notes

Conclusion: Toward Equality

Notes

End User License Agreement

Guide

Cover

Table of Contents

Begin Reading

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The Future of Capitalism series

Steve Keen, Can We Avoid Another Financial Crisis?

Ann Lee, Will China’s Economy Collapse?

Danny Dorling, Do We Need Economic Inequality?

Malcolm Sawyer, Can the Euro be Saved?

Chuck Collins, Is Inequality in America Irreversible?

Is Inequality in America Irreversible?

Chuck Collins

polity

Copyright © Chuck Collins 2018

The right of Chuck Collins to be identified as Author of this Work has been asserted in accordance with the UK Copyright, Designs and Patents Act 1988.

First published in 2018 by Polity Press

Polity Press65 Bridge StreetCambridge CB2 1UR, UK

Polity Press101 Station LandingSuite 300Medford, MA 02155, USA

All rights reserved. Except for the quotation of short passages for the purpose of criticism and review, no part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher.

ISBN-13: 978-1-5095-2254-5

Library of Congress Cataloging-in-Publication Data

Names: Collins, Chuck, 1959- author.Title: Is inequality in America irreversible? / Chuck Collins.Description: Malden, MA : Polity Press, [2018] | Series: The future of capitalism | Includes bibliographical references and index.Identifiers: LCCN 2017045295 (print) | LCCN 2017048494 (ebook) | ISBN 9781509522545 (Epub) | ISBN 9781509522507 (hardback) | ISBN 9781509522514 (pbk.)Subjects: LCSH: Income distribution--United States. | Poor--United States. | Wealth--United States. | Equality--United States.Classification: LCC HC110.I5 (ebook) | LCC HC110.I5 C5866 2018 (print) | DDC 339.2/20973--dc23LC record available at https://lccn.loc.gov/2017045295

The publisher has used its best endeavours to ensure that the URLs for external websites referred to in this book are correct and active at the time of going to press. However, the publisher has no responsibility for the websites and can make no guarantee that a site will remain live or that the content is or will remain appropriate.

Every effort has been made to trace all copyright holders, but if any have been inadvertently overlooked the publisher will be pleased to include any necessary credits in any subsequent reprint or edition.

For further information on Polity, visit our website:politybooks.com

Acknowledgments

I am most grateful to my colleagues at the Institute for Policy Studies and our Program on Inequality and Inequality.org team – especially Sarah Anderson, John Cavanagh, Josh Hoxie, Bob Lord, Anny Martinez, Jessicah Pierre, Sam Pizzigati, and Basav Sen.

Throughout this book are citations from and attributions to a wide community of scholars, researchers, analysts, agitators, and organizers. My gratitude is expressed, in part, through these footnotes. A special thanks to Brooke Harrington for her work on hidden wealth. S.M. “Mike” Miller has been an important mentor over the years.

Many thanks to the team at Polity, especially George Owers. Thanks also to readers, including Colin Gordon.

This book is dedicated to all those who work each day for an equitable and just society.

Introduction

A Front Row Seat to Inequality

I grew up in an affluent family in the wealthy Detroit suburb of Bloomfield Hills, Michigan. I attended an elite boys’ school, played tennis and golf at a private country club, and didn’t worry for much. Though growing up in the 1 percent, my parents had a strong sense of fairness and community responsibility.

At age 26, I had a job working with tenants in mobile home parks who were struggling to buy their mobile parks as cooperatives. In the process, I personally analyzed the private financial information of hundreds of low-income individuals in order to assess the feasibility of a resident-purchase.

By the mid-1980s, real wages for the bottom half of income earners in the population were starting to stagnate or decline. Because of my job, being privy to the financial secrets of many working-class and low-income Americans, I could see at first hand the impact of declining wages. I saw how people stretched and struggled to pay their bills, from working more hours, putting more family members into the paid labor force, and taking on debt.

Because of my advantaged upbringing, I was also witness to the wealth-creating-wealth phenomenon at the top end of the ladder. I personally saw the value of wealth given to me double over a five-year period. All around me people were celebrating their appreciating real estate and financial investment assets.

In the 1990s, when I started to read about inequality trends, these were not abstract numbers on a page. I could recall the faces and stories of people at both ends of the US economic experience.

* * *

We are living in a time of extreme and extraordinary inequality. There is now a genre of research looking at different dimensions of the income and wealth gap. This body of work chronicles the shapes and facets of inequality and its adverse impact on everything we care about. I myself have written a few of these books, and have documented this growing body of analysis from my perch as coeditor of the web portal, Inequality.org.

This slim volume will intentionally not linger on the problems caused by inequality, but instead will focus on the pathways to reversing these inequalities. This introduction will provide an overview of changes in income, assets, and the racial dimensions of economic inequality.

The primary focus of this analysis will be on the US economy and its particular systemic inequalities of income, wealth, power, and opportunity. While US inequality is part of a global trend, the condition is more acute due to the nature of hyperindividualistic capitalism and public policy in this country.

Chapter 1 summarizes the interdisciplinary research on the ways these inequalities undermine our democracy, public health, social mobility, economic stability, and civic life. In each case, I will point readers to other research on why these inequalities matter. In order to prescribe the proper remedies to reverse these inequalities, we must properly diagnose the causes. The second part of Chapter 1 examines the drivers of these inequalities and the debates as to their relevance. This discussion will go beyond the simplistic theory that they are driven by technological change and globalization, though these forces have contributed to the gap. These inequalities have their roots in “rule changes” in the economy, the result of imbalances of power and agency.

Chapter 2 will confront the significant barriers we face in reversing inequality, both in terms of the growing oligarchic power of wealth and the powerful narratives that hold inequalities in place. We will look at the current political moment in the US and the possibilities for change, setting up a more detailed conversation, in Chapter 5, of transformative campaigns.

The bulk of the book, after Chapter 2, is focused on the remedies and interventions required to shift the current US trajectory toward deeper inequalities – and reverse them. This will draw from the US historical experience of reversing the staggering inequalities of the first Gilded Age that emerged between 1880 and 1915. I will also draw lessons from social democracies that operate in the same global capitalist framework as the US but have considerably less inequality.

For ecological reasons, however, we cannot simply repeat the same playbook from the past, such as the policies that created the post-World War Two period of shared prosperity. Ecological limits to growth will constrain our ability to reduce inequality with a revival of carbon extraction and burning. As we face the realities of climate change – and the breaching of other ecological planetary boundaries such as declining fresh water and soil fertility alongside ocean acidification – a program to reduce inequality will have to operate within the constraints of a finite planet.

The discussion of policy interventions to reverse inequality will utilize a framework suggested by sociologist S.M. Miller. He clusters policy solutions into three sometimes overlapping categories: raising the floor, leveling the playing field, and reducing concentrations of wealth and power. Chapter 3 will explore solutions that “raise the floor,” reducing inequality by means of a substantial safety net and by establishing an income and wage floor that enables workers to share in productivity gains. The chapter also examines solutions that “level the playing field,” ensuring equality of opportunity and eliminating distortions in rules that govern the economy and that preference one group over another. Chapter 4 will survey solutions that reduce the “concentration of wealth and power,” including taxing the wealthy and instituting anti-trust provisions in order to break up corporate monopolies.

The final chapter will consider approaches to overcome the considerable barriers in terms of power politics, societal narratives, and economic theories. We will examine four examples of transformative campaigns and strategies for disrupting narratives that justify inequality and shifting power relations to reverse inequality.

Current Inequality Trends

What is the current picture in terms of our presentday wrenching inequalities of wages, assets, and opportunity?

One of the most important trends to understand, with enormous implications for recent politics, is the persistent stagnation of wages since the 1980s. After a period of relative shared prosperity, between 1947 and 1977, when real wages doubled for every stratum of US society, we entered a phase of flat or falling paychecks for a majority of US wage earners.

Since 1975, there have been extraordinary gains in productivity. But over half of US wage earners have not shared in the fruits of their labors. In 1970, the bottom half of wage earners, roughly 117 million adults, made an average of $16,000 a year in current dollars. By 2014, earnings for the bottom half of households had remained virtually unchanged, bumping up slightly to $16,200. Over the same period, the incomes of the top 1 percent tripled, from average annual wages of $400,000 to $1.3 million.1

The result is persistent poverty at the bottom, a work treadmill for low-wage workers, and a squeeze on middle-class workers. For more than four decades, poverty rates have remained unchanged. Over 13.5 percent of the population, an estimated 43 million people, live below the poverty line. A growing number of low-wage workers are toiling longer hours and taking on debt to survive economically.

Another form of income inequality is the increasing gap between the compensation of CEOs and top corporate executives compared to average- or lowest-paid workers in firms. In the mid-1960s, the ratio between CEO pay and average worker pay was about 20:1. In recent years, the ratio has swollen to more than 300:1.2 Skyrocketing CEO pay is one of the drivers of increased income concentration. Between 1979 and 2005, corporate executives accounted for 58 percent of the expansion of income for the top 1 percent of households and 67 percent of income growth among the top 0.1 percent.3

Another alarming trend has been the updraft of both income and wealth to the very wealthiest households. Between 1980 and 2013, the richest 1 percent saw their average real income increase by 142 percent, with their share of national income doubling from 10 percent to 20 percent. But most economic gains during this period have flowed to the top 0.1 percent – the top one-tenth of 1 percent – whose real income increased by 236 percent. Their share of national income almost tripled, from 3.4 percent to 9.5 percent. Since the economic meltdown of 2008, an estimated $91 of every $100 in increased earnings have gone to the top 1 percent.4 The bottom 99 percent of wage earners split the remaining 9 percent in gains.

Wealth has increasingly concentrated at the top. The wealthiest 1 percent of households now hold roughly 42 percent of private wealth, up from 33 percent in 1983.5 At the very pinnacle of US wealth is the Forbes 400, all of whom are billionaires, with a combined net worth of $2.3 trillion. Together, this group has more wealth than the bottom 62 percent of the US population combined. The 20 wealthiest billionaires – who could all fit into a Gulfstream 650 luxury jet – have more wealth than the entire bottom half of the US population.6

One reason the wealthy have so much more than the bottom half of US households is that almost 20 percent of US households have zero or negative net worth. This lack of any financial cushion to fall back on increases the vulnerability of millions of households, including those that appear to be middle class and stable. Financial advisors recommend that families maintain three months of financial liquidity, but 44 percent of households don’t have these reserves, especially if they live at the poverty level.7

Reflecting the historic inequalities between white, black, and Latino households, the racial wealth divide has grown over the last several decades. In 2013, the median wealth of white households was an alarming 13 times greater than the median wealth of black households — up from 8 times greater in 2010. White households had 10 times more wealth than Latino households.8 The richest 100 billionaires have more wealth than the entire African American population: more than 14 million households with 42 million people. The wealthiest 186 billionaires have as much wealth as the entire Hispanic population: more than 55 million people.9

Is Inequality in American Irreversible?