Quantcast
Connect with us

‘$2.5 trillion theft’: Study shows richest 1 percent of Americans have taken $50 trillion from bottom 90 percent in recent decades

Published

on

Minimum wage protesters -- Shutterstock

The median U.S. worker salary would be around twice as high today if wages kept pace with economic output since World War II, new research revealed.

New research published Monday found that the top 1% of U.S. income earners have taken $50 trillion from the bottom 90% over the past several decades, and that the median worker salary would be around twice as high today as it was in 1945 if pay had kept pace with economic output over that period.

ADVERTISEMENT

The study’s authors, Carter C. Price and Kathryn Edwards of the RAND Corporation, examined income distribution and economic growth in the United States from 1945 to the present. The researchers found stark differences between income distribution from 1945 to 1974 and 1975 to 2018.

According to the study—which was funded by the Seattle-based Fair Work Center—the median salary of a full-time U.S. worker is currently about $50,000. Adjusted for inflation using the consumer price index, workers at or below the current median income now earn less than half of what they would have if incomes had kept pace with economic growth. This means that if salaries had kept pace with economic output, the median worker pay would be between $92,000 and $102,000 today, depending on how inflation is calculated.

Had the more equitable distribution of the roughly 30-year postwar period continued apace, the total annual income of the bottom 90% of American workers would have been $2.5 trillion higher in 2018, or an amount equal to about 12% of GDP.  In other words, the upward redistribution of income has enriched the 1% by some $47 trillion—which would now be more than $50 trillion—at the expense of American workers.

ADVERTISEMENT

David Rolf, a Seattle labor organizer, president of the Fair Work Center, and founder of Service Employees International Union (SEIU) Local 775, is more blunt. He calls this “the $2.5 trillion theft.”

ADVERTISEMENT

“From the standpoint of people who have worked hard and played by the rules and yet are participating far less in economic growth than Americans did a generation ago, whether you call it ‘reverse distribution’ or ‘theft,’ it demands to be called something,” Rolf, who helped lead the fight for a $15 hourly minimum wage in Seattle and beyond, told Fast Company.

Remarkably, the study found that workers at all income levels would be better off today if income kept pace with output. Full-time, prime-age workers in the 25th percentile, for example, would be earning $61,000 instead of $33,000. Workers in the 75th percentile, who in 2018 earned $81,000, would be making $126,000. Even 90th-percentile workers, who earn $133,000, would be making $168,000 under the more equitable distribution.

ADVERTISEMENT

On the other hand, had the economic pie been divided more equitably, the income of the top 1% would fall from around $1.2 million to a still-affluent $549,000.

“We were shocked by the numbers,” said Nick Hanauer, a venture capitalist and self-described “zillionaire” who, along with Rolf, came up with the idea for the study. “It explains almost everything,” Hanauer told Fast Company. “It explains why people are so pissed off. It explains why they are so economically precarious.”

Sen. Bernie Sanders (I-Vt.), who made correcting economic inequality a pillar of both of his presidential bids, lamented the “h-u-g-e redistribution of income in America” in a Monday tweet.

ADVERTISEMENT

The researchers’ findings, which come amid a deadly coronavirus/Covid-19 pandemic, shine light on the injustice of an economy—by far the wealthiest in the history of civilization—in which essential workers struggle mightily, and often in vain, to survive while the richest people grow ever richer at their expense.

According to Americans for Tax Fairness, the total wealth of U.S. billionaires increased by $792 billion, or 27%, during the first five months of the Covid-19 pandemic. During this period, Amazon CEO Jeff Bezos, the world’s wealthiest person, has become the world’s first multi-centibillionaire, with a net worth now surpassing $200 billion. Meanwhile, his employees struggle to make ends meet, and Amazon workers who speak out against poor pay and hazardous working conditions during the pandemic have been fired and derided by company executives.

ADVERTISEMENT

Compared to other most-developed nations, the U.S. has done a relatively poor job of taking care of its people during the pandemic. In addition to the U.S. being the only developed nation without universal healthcare, its workers have received less in direct payments and government support than people in many comparable countries.

The gap between the richest and poorest U.S. households is now wider than it has ever been in the past 50 years, according to the most recently available data from the U.S. Census Bureau. The pandemic has only exacerbated the situation, as around half of lower-income American households have reported a job or wage loss due to Covid-19.

Internationally, the U.S. ranks 39th out of over 150 nations in income inequality, according to Gini coefficient data compiled by the CIA, placing it roughly on par with nations like Peru and Cameroon. Among Organization for Economic Cooperation and Development (OECD) nations, the U.S. has the seventh-highest level of income inequality.

The U.S. has the highest poverty rate among the world’s most-developed nations, and the fourth-highest poverty rate among OECD nations after South Africa, Costa Rica, and Romania. According to UNICEF, the U.S. also has the second-highest rate of childhood poverty in the developed world behind Romania, with more than one in five U.S. children—and over one in four Latinx children, and nearly one in three Black and Native American children—living in poverty.

ADVERTISEMENT

This year, more than 54 million Americans, or roughly one in every six people—including 18 million children—may experience food insecurity, according to the nonprofit group Feeding America.


Report typos and corrections to: [email protected].
READ COMMENTS - JOIN THE DISCUSSION
Continue Reading

2020 Election

Welcome to ‘Crazytown’: An unprecedented frenzy in Georgia shows how democracy breaks down

Published

on

On the eve of the general election, Russ Silva and his family, like many fellow Georgians, watched as the results started slowly pouring across his television set. It was becoming more and more apparent that Georgia was destined to become a focal point for the entire country, not just because it was a contested battleground state between Donald Trump and Joseph Biden, but also because it was setting the stage for an unprecedented situation.

As election night came to an end with many results still uncertain, Silva let out a sigh as he bemoaned to AlterNet what he suspected was inevitable: "Now I pretty much know I'm going to be barraged by endless ads."

Continue Reading

Breaking Banner

The NYPD said Kawaski Trawick’s killing ‘appears to be justified’ — but revealed video shows officers escalated the situation

Published

on

Kawaski Trawick was shot and killed in his Bronx apartment by a New York Police Department officer on April 14, 2019. The NYPD said Trawick had charged at officers with a knife. Video of the shooting shows the officers had escalated the situation — and that one officer then shot Trawick over his more-experienced partner’s objections.

While the NYPD has never released video of the shooting, the Bronx District Attorney’s Office released footage of it last month, along with a detailed report. ProPublica separately obtained parts of the videos.

Continue Reading
 

Breaking Banner

The View’s Ana Navarro drops the hammer on election challenge: ‘One more Trump fraud’

Published

on

"The View" co-host Ana Navarro called out President Donald Trump's efforts to undermine U.S. democracy as just another "grift."

The president's efforts to overturn his election loss to Joe Biden have set Republicans against each other in Georgia, where both Senate seats -- and the GOP majority -- remain up for grabs in a Jan. 5 runoff.

"When your enemy is shooting themselves, don't get in the way," Navarro said. "Look, if I were [Sen. Kelly] Loeffler or [Sen. David] Perdue, frankly, I would draw the curtains, bolt the doors, shut off the lights and ask somebody to wake me up when he's gone."

Continue Reading