The New Inequality

Special edition of The Nation explores the current state of inequality in the U.S. The June 30 issue explores the impact of the greatest level of inequality since the Gilded Age prior to WWI.

The Rich and the Rest of Us by John Cavanagh and Chuck Collins
Over the last three decades, market worshipping politicians and their and their corporate backers have engineered the most colossal redistribution of wealth in modern world history, a redistribution form the bottom up, from working people to the tiny global elite.
Read more http://www.thenation.com/doc/20080630/cavanagh_collins

Our Gilded Age by Doug Henwood
It has become a cliche to say that we live in a new Gilded Age. True enough, up to a point. Money, mostly new money, rules politics and culture. Corporations merge into larger corporations. You have to go back to before World War I to match today’s levels of income and wealth inequality.
In some ways, the second Gilded age is worse than the first. Sure, we live longer now, more of us can read and you don’t have to be a white man to vote. But to prove my point, consider two big arties thrown 110 years apart.
Read more http://www.thenation.com/doc/20080630/henwood

Meet the Wealth Gap by Gabriel Thompson

For a delivery worker, perched on a bicycle with plastic bags of food dangling from each handlebar, Manhattan's East Side offers many opportunities for a trip to the emergency room. I learn this one May afternoon as I trail 26-year-old Apolinar Perez, a chubby-faced Mexican immigrant who skillfully steers his black mountain bike through the chaos. A taxi switches lanes without warning, nearly clipping my front wheel. Suit-clad men and women stride purposefully into the street, too wrapped up in their phone conversations to notice they're crossing against the light. A black Suburban with tinted windows screeches to a halt in front of us, directly in the path of the bike lane.
Perez arrived in New York City five years ago, after crossing the Texas border in the back of a truck while hidden beneath a pile of children's toys. Since then, he's delivered food for the same Italian restaurant, working eleven hours a day, six days a week. Pay couldn't be simpler: before heading home each night, one of the managers hands him a $20 bill. That's an hourly wage of $1.82--well below the state's $4.85 minimum wage for delivery workers. The rest of his earnings come through tips, which average $60 a shift. There's no overtime or healthcare, no sick days or workers' comp. I inquire about any benefits I might be forgetting. "For Christmas they give me $50," he says. "Sometimes.

Read more http://www.thenation.com/doc/20080630/thompson

Race and Extreme Inequality by Dedrick Muhammad

The current presidential campaign has sparked a lot of conversation about race, but it has primarily been at the symbolic and interpersonal level. It has failed to probe the underlying substance of racial economic disparities and the slow rate of progress toward equity in wealth and wages. Too many Americans naïvely see the strong presidential candidacy of Illinois Senator Barack Obama as evidence of the resolution of the racial divide.

Read more http://www.thenation.com/doc/20080630/muhammad

This Land is Their Land by Barbara Ehrenreich

I took a little vacation recently--nine hours in Sun Valley, Idaho, before an evening speaking engagement. The sky was deep blue, the air crystalline, the hills green and not yet on fire. Strolling out of the Sun Valley Lodge, I found a tiny tourist village, complete with Swiss-style bakery, multistar restaurant and "opera house." What luck--the boutiques were displaying outdoor racks of summer clothing on sale! Nature and commerce were conspiring to make this the perfect micro-vacation.
But as I approached the stores things started to get a little sinister--maybe I had wandered into a movie set or Paris Hilton's closet?--because even at a 60 percent discount, I couldn't find a sleeveless cotton shirt for less than $100. These items shouldn't have been outdoors; they should have been in locked glass cases.

Then I remembered the general rule, which has been in effect since sometime in the 1990s: if a place is truly beautiful, you can't afford to be there. All right, I'm sure there are still exceptions--a few scenic spots not yet eaten up by mansions. But they're going fast.

Read more http://www.thenation.com/doc/20080630/ehrenreich

For more information on income and wealth inequality and how to work for a more equal society:

www.extremeinequality.org
The Working Group on Extreme Inequality began coming together in 2007. Many of the organizations involved in the Working Group had, over the years, been active in organizing against poverty and economic insecurity. That effort had helped us understand that the fight against inequality, to make significant headway, has to both “raise the floor” and challenge the concentrated wealth and power that increasingly sit at the top of our economic ladder.

www.inequality.org
About Inequality.org
Ten or fifteen years ago, we can attest, the growing concentration of income and wealth was not a focus of overwhelming national concern. The problem is worse today than it was then. Nevertheless, over the past year, America has taken a huge step forward in awareness. Across the political spectrum, there is almost universal acknowledgment that our nation (and planet) are pulling apart economically.
Alan Greenspan has spoken out. So has George Bush. Jim Webb made rising inequality a theme of his successful campaign for the Senate in Virginia. "When I graduated from college, the average corporate CEO made 20 times what the average worker did," Webb pointed out in his response to the President's State of the Union Message in January. "Today, it's nearly 400 times. In other words, it takes the average worker more than a year to make the money his or her boss makes in one day."
You'll find many other startling and disturbing statistics in our "By the Numbers " section. None are widely contested.
The debate now turns to three important questions: Does it matter? Why is it happening? What can be done? Despite the emerging consensus over the fact of rising inequality, there is still wide divergence of opinion over its sources - and potential solutions.
Inequality.org was created to serve as a dependable portal of information. Too much inequality, we believe, undermines democracy, community, culture and economic health. Because the problem is so important, accuracy is important, and we are committed to presenting the best and latest information.
We hope you will bookmark us, join us regularly for up-to-date information and analysis, and participate in the conversation - and the action.
Chuck Collins, Institute for Policy Studies
James Lardner, Demos

www.faireconomy.org

United for a Fair Economy is a national, independent, nonpartisan, 501(c)(3) non-profit organization. UFE raises awareness that concentrated wealth and power undermine the economy, corrupt democracy, deepen the racial divide, and tear communities apart. We support and help build social movements for greater equality.

www.toomuchonline.org

About Too Much
Each and every week, Too Much explores excess and inequality, in the United States and throughout the world. We cover a wide swatch of economic and political territory, everything from executive pay and lifestyles of the rich and famous to the latest research insights on how staggering income and wealth divides are impacting our health and our happiness.
Too Much began publication in 1995 as a print quarterly jointly published by the Council on International and Public Affairs in New York and the Boston-based United for a Fair Economy, then became an online weekly nine years later.
Too Much, ever since its inception, has been edited by labor journalist Sam Pizzigati, the author, most recently, of the award-winning Greed and and Good: Understanding and Overcoming the Inequality that Limits Our Lives.
Subscriptions to the weekly Too Much email newsletter are free. You can read the current issue online or check our archive for back issues. To get Too Much in your e-mail inbox every Monday, just sign up here.

You've Received Your Economic Stimulus Check: Now What

May 15, 2008 EPI Policy Memorandum #124

Making the case – again – for an economic rebound
by Nancy Cleeland and John Irons

With federal stimulus checks in the mail this month, it’s worth reconsidering the much-trumpeted bipartisan accord that was reached in January to jumpstart the U.S. economy – and all that it fails to do. For instance, the stimulus deal provides for no extension of unemployment benefits; no aid to cash-strapped states; and no spending on immediate repairs to schools, bridges, ports, and other crucial infrastructure. All of the above were identified by EPI as cost-effective ways to inject money into a shrinking economy, in many cases, creating good jobs in the process. They were not incorporated into the plan then, and despite far worsening economic conditions, efforts to revive the ideas have not gathered sufficient support. In fact, the latest effort toward a second stimulus package in the House, which began with talk of halting foreclosures and building infrastructure, has shrunk down to a minor extension of unemployment benefits tagged onto a supplemental appropriations bill used to fund the war in Iraq.

The good news is that the January deal between House leaders and President Bush puts cash in the pockets of people who are likely to spend it, ratcheting down the payments for individuals who earn more than $75,000 a year. The bad news is that businesses get tax breaks worth an estimated $45 billion this year that will do nothing to get the economy moving again—businesses need customers, not incentives to increase capacity. If there was any doubt of recession in January, it should be gone by now, after four months of shrinking employment, a quarterly gross domestic product rate that is barely above zero, and signs of a pullback in consumer spending.

Here is some of what needs to be done in a second stimulus package to immediately boost the economy, create jobs, and ensure against a prolonged period of economic weakness:

Infrastructure:
With thousands of bridges in need of repair, accelerated investments in road and bridge repair would create jobs today while making our transportation system safer;
A school maintenance and repair initiative would eliminate years of deferred maintenance and improve the learning conditions for students and teachers;
By putting a down payment on regional transportation projects by creating an infrastructure investment bank we can begin to meet long-term infrastructure needs.

Unemployment insurance:
With long-term unemployment at unusually high levels, extending unemployment insurance benefits would yield an immediate stimulus and protection against a longer-term economic downturn.

State aid:
States continue to project significant budget shortfalls; providing emergency aid to states would prevent cutbacks that would worsen economic conditions.

Economic Policy Institute www.epi.org

New Campaign to Cut Poverty in Half

From Poverty to Prosperity: A National Strategy to Cut Poverty in Half


While thirty-seven million Americans living below the official poverty line, and many millions more unable to meet their basic needs, a mere 150,000 families or 0.01% of the nation’s population accounts for 5.5%of total income. As millions of homeowners face foreclosure and the value of the dollar continues to tumble, inequality in the Untied States has surpassed that of many developing and third world countries. While elective and cosmetic surgeries become ever more popular, the number of working Americans with health insurance continues to decline, exceeding forty-seven million people. And, while crime continues to decrease, the Untied Sates prison population continues to grow, topping 2.2 million people incarcerated, the cast majority of whom are poor and men of color.

As our inequality continues to grow and take an ever larger toll, our elected officials continue to ignore reality and since the end of John Edwards’ presidential campaign, poverty is not even an issue on the campaign trail. While Republicans and Democrats continue to squander billions on a failed war effort, social programs are forced to cut back, increasing the burden on working and low income families.

A new effort has been launched to address these inequalities in America, Half In Ten, a campaign to cut poverty in half within ten years. Spearheaded by former Senator john Edwards and the Association of Community Organizations for Reform Now (ACORN), the Center for American Progress Action Fund (CAPAF), the Coalition on Human Needs (CHN), and the Leadership Conference on Civil Rights (LCCR), the campaign goals are to:

1) Elevate and sustain a focus on the situations facing the poor and middle class today (2) Build and strengthen an effective constituency to demand legislative action on poverty and economic mobility (3) Advance specific legislative and policy proposals that will deliver real benefits to struggling American families.

This campaign is based upon a report published by the Center for American Progress, titled From Poverty to Prosperity: A National Campaign to Cut Poverty in Half. The report lays out four principles that guide the campaign, they are:

• Promote decent work
• Provide opportunity for all
• Ensure economic security
• Help people build wealth

To realize the goal of cutting poverty in half within ten years, the report sets out the following twelve point agenda:
1) Raise and index the minimum wage to half the average hourly rate
2) Expand the earned income tax credit and child tax credit
3) Promote unionization by enacting he Employee Free Choice Act
4) Guarantee child care assistance to low-income families and promote early education for all
5) Create 2 million “New Opportunity” housing vouchers and promote equitable development in and around central cities
6) Connect disadvantaged and disconnected youth with school and work
7) Simplify and expand Pell Grants and make higher education accessible to residents of each state
8) Help former prisoners find stable employment and reintegrate into their communities
9) Ensure equity for low wage workers in the Unemployment Insurance system
10) Modernize means-tested benefits programs to develop a coordinated system that helps workers and families
11) Reduce the high cost of being poor and increase access to financial services
12) Expand and simplify the Saver’s Credit to encourage saving for education, homeownership and retirement.

The entire report From Poverty to Prosperity: A National Campaign to Cut Poverty in Half, can be accessed at: http://www.americanprogress.org/issues/2007/04/poverty_report.html

The web site for Half In Ten From Poverty to Prosperity can be accessed at: http://www.halfinten.org/aboutus.html

US: ‘Drug War’ Unjust to African Americans

Two National Reports Detail Racial Disparity in Arrests and Imprisonment

Washington, DC, May 5, 2008) – Ostensibly color-blind, the US “war on drugs” disproportionately targets urban minority neighborhoods, Human Rights Watch and The Sentencing Project said in two reports released today. Although whites commit more drug offenses, African Americans are arrested and imprisoned on drug charges at much higher rates, the reports find.

In the 67-page report, “Targeting Blacks: Drug Law Enforcement and Race in the United States,” Human Rights Watch documents with detailed new statistics persistent racial disparities among drug offenders sent to prison in 34 states. All of these states send black drug offenders to prison at much higher rates than whites. “Most drug offenders are white, but most of the drug offenders sent to prison are black,” said Jamie Fellner, senior counsel in the US program at Human Rights Watch and author of “Targeting Blacks.” “The solution is not to imprison more whites but to radically rethink how to deal with drug abuse and low-level drug offenders.”

Key findings in the Human Rights Watch report include:

• Across the 34 states, a black man is 11.8 times more likely than a white man to be sent to prison on drug charges, and a black woman is 4.8 times more likely than a white woman.
• In 16 states, African Americans are sent to prison for drug offenses at rates between 10 and 42 times greater than the rate for whites.
• The 10 states with the greatest racial disparities in prison admissions for drug offenders are: Wisconsin, Illinois, New Jersey, Maryland, West Virginia, Colorado, New York, Virginia, Pennsylvania, and Michigan.

The Sentencing Project’s 45-page study, “Disparity by Geography: The War on Drugs in America’s Cities,” is the first city-level analysis of drug arrests, examining data from 43 of the nation’s largest cities between 1980 and 2003.

The study found that, since 1980, the rate of drug arrests in American cities for African Americans increased by 225 percent, compared to 70 percent among whites. Black arrest rates grew by more than 500 percent in 11 cities during this period; and, in nearly half of the cities, the odds of arrest for a drug offense among African Americans relative to whites more than doubled. “The alarming increase in drug arrests since 1980, concentrated among African Americans, raises fundamental questions about fairness and justice,” said Ryan S. King, policy analyst for The Sentencing Project and author of “Disparity by Geography.” “But even more troubling is the fact that these trends come not as the result of higher rates of drug use among African Americans, but, instead, the decisions by local officials about where to pursue drug enforcement.”

Among The Sentencing Project report’s key findings:

• African-American drug arrests increased at 3.4 times the rate of whites despite similar rates of drug use.
• Extreme city variations in drug arrests point to local enforcement decisions as a prime contributor to racial disparity.
• Six cities experienced more than a 500-percent rise in overall drug arrests between 1980 and 2003: Tucson (887 percent), Buffalo (809 percent), Kansas City (736 percent), Toledo (701 percent), Newark (663 percent), and Sacramento (597 percent). The Sentencing Project and Human Rights Watch urge public officials to restore fairness, racial justice, and credibility to drug-control efforts.

They recommend public officials take a number of concrete steps, including:

• Eliminating mandatory minimum sentences and restoring judicial discretion to sentencing of drug offenders;
• Increasing public funding of substance abuse treatment and prevention outreach to make these readily available in communities of color in particular;
• Enhancing public health-based strategies to reduce harms associated with drug abuse and reallocating public resources accordingly.

These reports follow in the wake of the March 2008 recommendations of the United Nations Committee on the Elimination of Racial Discrimination. The committee urged that US criminal justice policies and practices address the unwarranted racial disparities that have been documented at all levels of the system.

Health Care for America

A proposal for guaranteed, affordable health care for all

Americans building on Medicare and

employment-based insurance
b y J a c o b S . H a c k e r

America’s $2.2-trillion-a-year medical complex is enormously wasteful, ill-targeted, inefficient, and unfair. The best medical care is extremely good, but the Rube Goldberg system through which that care is financed is extremely bad—and falling apart. One out of three non-elderly Americans spend some time without health insurance every two years, and the majority of those remain uninsured for more than nine months. Meanwhile, runaway health costs have become an increasingly grave threat, not just to the security of family finances, but also to corporate America’s bottom line. The United States spends much more as a share of its economy on health care than any other nation, and yet all this spending has failed to buy Americans the one thing that health insurance is supposed to provide: health security.

Health insecurity is not confined to one part of the population. It is experienced by all Americans: those without insurance as well as those who risk losing coverage; those who are impoverished as well as those with higher incomes who experience catastrophic costs; those who are sick or injured as well as those who are just one sickness or injury away from financial calamity. As health care costs have skyrocketed and the proportion of Americans with stable benefits has eroded, health insecurity has become a shared American experience, felt by those who thought they had it made as well as those just struggling to get by.

This growing problem is pushing health care reform back onto the agenda of American politics after more than a decade of neglect. And yet, nothing guarantees that this debate will end differently than previous battles. Again and again in the 20th century—most recently, in the early 1990s—efforts to make health insurance an integral piece of the American social fabric were stymied. The stakes are too high to allow reform to be blocked again. America’s economy, the finances of its middle class, the quality of its medical care, and the health of its citizens all hang in the balance.

To avoid the dismal fate of previous reform campaigns, a successful agenda must take seriously the political constraints and organizational realities that have hamstrung reform efforts in the past. Limits on public budgets, resistance to measures that might be seen as taking away what Americans already have, and the embedded realities of the present system all stand squarely in the path of grand policy redesigns—from single-payer national health insurance, to individual mandates requiring that everyone purchase private coverage, to a universe of individualized Health Savings Accounts. Instead, the most promising route forward is to build on the most popular elements of the present structure—Medicare and employment-based health insurance for well-compensated workers—through a series of large-scale changes that are straightforward, politically doable, self-reinforcing, and guaranteed to produce expanded health security.

The full proposal by Jacob Hacker can be viewed at: http://www.sharedprosperity.org/bp180/bp180.pdf

Health Care Insecurity Increases as Employer-Based System Continues to Erode

Health insecurity across education levels

by Heidi Shierholz

It is widely recognized that the employer-based health care system is eroding. The share of workers with employer-provided health insurance has decreased substantially in recent years, even amidst relatively low levels of unemployment and growing productivity. From 2000 to 2006, the share of workers who received health insurance from their own jobs declined 4 percentage points. Perhaps surprisingly, the decline in coverage has taken place across the entire age, education, occupation, industry, race, and ethnicity spectrum. As an example, the chart below shows the decline in employer-provided health insurance between 2000 and 2006 for workers with different levels of education. While workers with more education are more likely to receive health insurance from their employers, workers from all education levels have seen similar declines in coverage. Specifically, workers with no more than a high school education saw a decline of 5.0 percentage points, workers with some college education but no bachelor's degree saw a decline of 4.2 percentage points, and workers with a college degree or more saw a decline of 3.6 percentage points. Overall, 6.4 million fewer workers had employer-provided health insurance in 2006 than in 2000.

These findings, along with others in the Economic Policy Institute paper A Decade of Decline, show that health insecurity is now a broadly shared American experience. The erosion at all levels of the employer-based system, along with the critical need to control skyrocketing health care costs, indicate that the time has come to reform our health care system to guarantee that all Americans have access to affordable, high-quality health insurance. The Health Care for America plan, for example, would ensure that all Americans receive coverage and would do so at a lower total national cost than the current system.

The full report can be viewed at: http://www.epi.org/content.cfm/bp209

INCOME INEQUALITY GREW IN MOST STATES

Low-Income Families Lost Ground Since Late 1990s

The gap between the richest and poorest families, and between the richest and middle-income families, grew significantly in most states over the past two decades, according to a new study by the Center on Budget and Policy Priorities and the Economic Policy Institute. In fact, the nation’s longstanding trend of growing inequality accelerated since the late 1990s as incomes fell
for poor families and stagnated for middle-income families in a number of states.

The study, based on inflation-adjusted Census data, is one of the few to examine income inequality at the state level. It measured and compared income trends among the highest-, middle-, and lowest-income families in three periods – the late 1980s, the late 1990s, and the mid-2000s. (If anything, the study understates inequality because it does not include income from capital gains, which goes overwhelmingly to those at the top.) Low- and middle-income families have reaped few gains since the late 1990s, despite the recent years of economic prosperity. Average incomes actually fell by 2.5% for those in the bottom fifth of the income scale and rose by just 1.3% for those in the middle fifth. Meanwhile, incomes climbed 9% for those in the top fifth.

“Before the recent downturn hit, our economy was generating solid income gains. The problem was that high levels of inequality meant these gains failed to reach middle- and low-income families, whose living standards stagnated or even declined,” said Jared Bernstein, senior economist at the Economic Policy Institute and co-author of the report. “As we head into an economic downturn, these families are illprepared to weather the storm.” Elizabeth McNichol, senior fellow at the Center and the other co-author, added, “Rising inequality raises basic issues of fairness, and harms the nation’s economy and political system. It dampens economic
prosperity as incomes stagnate for tens of millions of average Americans and it threatens to widen the nation’s political cleavages, generating more cynicism about political institutions.”
During the longer time period – from the late 1980s to the mid-2000s – in 37 states, incomes grew much more slowly for the bottom fifth of families than for the top fifth. In these states, the incomes of the richest fifth grew by an average of $36,300 (39 percent), while the incomes of the poorest grew by only $1,600 (9 percent). The purchasing power of the poorest families increased by just $93 per year.

The full report can be found at http://www.cbpp.org/4-9-08sfp.htm.