Top 10 Percent of Earners Now Hold Half of America’s Wealth
As income inequality continues to grow in this country, it isn’t about the gap between the rich and poor, but the gap between the insanely wealthy and everyone else.
In the 1950s the top 10 percent of earners held about a third of the nation’s wealth, whereas today that number has skyrocketed to half. Instead of ‘trickle-down’ economics (as the rich become more wealthy, it is supposed to generate opportunity for everyone else), which has been a proven failure, we now have a ‘trickle-up’ effect, as wealth reinforces itself.
The chief culprit for this unseemly trend is America’s failed trade policies. Actions beginning in the 1970s to promote the financial sector over the manufacturing sector through deregulation mark the start of this nation’s path to decline. Deregulation and declining union membership during the past three decades have culminated in stagnant wages, the housing crash and massive economic gains for the wealthy through the stock market.
While average people lost ground in the economy, the wealthiest capitalized on these events. Today, the disconnect is more obvious than ever. As corporations sit on record profits and the stock market roars back to life, record numbers of Americans are still unemployed or have lost hope.
“Coming out of the recession, balance sheets of the [ultra-rich] have recovered much more vigorously than those of other folks,” Ajay Kapur, a managing director at Deutsche Bank wrote for CNNMoney.
These disastrous ‘free’ trade agreements have allowed American companies, which are now American in name only, to create a race to the bottom in wages and benefits between citizens in other countries, and even U.S. states, while executives reap all the profits.
The U.S. needs to reform the tax system so the wealthy pay their fair share and so that businesses can compete globally. Implementation of a value-added tax would go a long way toward solving that problem. Reworking our trade policy so that it benefits American citizens instead of corporations is needed to correct high unemployment.