If Top 1% Hadn't Ripped Off Trillions, You'd Likely Be Making Thousands of Dollars More Right Now
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The corporate media appear to be obsessed with the idea that the Occupy Wall Street movement doesn't have a cohesive message. Of course, that misses the point: as Nathan Schneider wrote in Yes! magazine, “More than demanding any particular policy proposal, the occupation is reminding Wall Street what real democracy looks like: a discussion among people, not a contest of money.”
And despite the handwringing about the movement's supposed lack of focus, it does have a simple-to-understand message that fits neatly on a bumpersticker: "We Are the Other 99 Percent."
Contained in that simple message is an implied demand, whether or not people recognize it: undoing several decades of increasing inequality in this country.
Economists Thomas Picketty and Emanuel Saez sliced and diced America's income going all the way back to 1913, and their results tell us exactly what the Occupy Wall Street movement is about, at least in broad terms.
Choose a year from some fondly remembered past when the American economy generated broadly shared prosperity. How about 1947? That year, the top 1 percent of U.S. households grabbed a bit less than 12 percent of the nation's pre-tax income, and the other 99 percent shared around 88 percent of the take. It wasn't a perfect time, but it was an era when a large middle-class was emerging.
Or maybe you think 1967 was a great time to be an American worker. That year, the top 1 percent grabbed 10.7 percent of the pile, and the other 99 percent divvied up around 89 percent of our income.
Between 1949 and 1979, those at the top never took in more than 12.8 percent of the total. When Ronald Reagan was elected in 1980, they grabbed 10 percent of our economic output, and the rest of us shared 90 percent. And that's when things started to shift, relatively rapidly. In Reagan's final year in office, the top 1 percent of American households grabbed 15.5 percent of the nation's income.
By the time George W. Bush was elected, they were taking in 21.5 percent. And in 2007, the year before the crash, they were pulling in 23.5 percent of our pre-tax income, leaving the other 99 percent to share just 76.5 percent of the fruits of our output.
According to Paul Buchheit, a professor with City Colleges of Chicago and founder of fightingpoverty.org, “if middle- and upper-middle-class families had maintained the same share of American productivity that they held in 1980, they would be making an average of $12,500 more per year.” The size of our economy, he wrote, “has quintupled since 1980, and we all contributed to that success. But our contributions have earned us nothing. While total income has also quintupled, percentage-wise almost all the gains went to the richest 1 percent.” This upward redistribution of wealth “translates into a trillion extra dollars of income every year for the richest 1 percent.”
There are two things that are vitally important to understand about this. First, those at the top of the ladder aren't any more virtuous, intelligent or hardworking than they were 30 years ago, and this didn't happen by accident. Some part of it may well have resulted from technological innovations, but the lion's share of that shift resulted from specific policy changes that the corporate Right fought hard to enact.
It resulted from the emergence of international trade deals that facilitated offshoring much of our manufacturing base, changes in labor laws and enforcement that cut the unionized share of the American workforce in half, and a shift in priorities at the Federal Reserve that led it to concentrate far more on keeping inflation in check than keeping working America employed.