5 Ways Massive Inequality Is Paralyzing American Society

The severing of our society into a plutocracy and a peasantry is so far along that statistics almost cease to have meaning. But the facts have to be told, to help explain the sickening sense that we're becoming a nation without a middle class, paralyzed by the inequality deniers and excuse makers who refuse to admit there's something wrong with their free-market capitalist system. The extremes are becoming almost intolerable.

1. A Broken System of Compensation: The Combined Salaries of 350,000 Pre-School Teachers is Less Than That of Five Hedge Fund Managers

Pre-school teaching may be our nation's most important job. Numerous studies show that with pre-school, all children achieve more and earn more through adulthood, with the most disadvantaged benefiting the most.

Hedge fund managers, at the other extreme, are likely to bet on mortgages to fail or on food prices to rise.

It's a frightening commentary on our value system that the total income of over a third of a million pre-school teachers is less than the combined income of just five big-money speculators.


2. Diminishing Support for Society: The 1% Made More from their Investments in 2013 than the Entire Cost of Social Security, Medicare, Medicaid, and the Safety Net

America's wealth grew by almost $9 trillion in 2013. The richest 1% own 34 percent of the wealth (Table 6 here or Table 2 here), or about $3 trillion of the 2013 gain.

That is far more than the budget for Social Security ($860 billion), Medicare ($524 billion), Medicaid ($304 billion), and the entire safety net ($286 billion for SNAP, WIC [Women, Infants, Children], Child Nutrition, Earned Income Tax Credit, Supplemental Security Income, Temporary Assistance for Needy Families, and Housing).


3. Capital's Long-Term Dominance of Labor: Since 1900, a Dollar of Labor has Grown to $127, a Dollar of Stocks to $1,247

There's a good reason why the super-rich are cleaning up in the stock market. Thomas Piketty explains that, barring war or depression, the return on capital far outpaces economic growth, causing average workers without a stock portfolio to drop further and further behind. A look at stock market growth over 114 years (Page 60) confirms that a dollar of capital is now worth ten times more than a dollar of labor value.

In recent years, the gains from continued worker productivity have gone to the 10% of Americans who own almost 90 percent of all stocks excluding pensions (which are fast disappearing).


4. The Walmartization of America: A Few Super-Rich at the Top, then Everyone Else

Just like at Walmart, a few big moneymakers are ruling over a great majority of increasingly low-income workers. Low-wage jobs ($7.69 to $13.83 per hour) made up 1/5 of the jobs lost to the recession, but accounted for nearly 3/5 of the jobs regained during the recovery. And it's getting worse. Nine out of ten of the fastest-growing occupations are considered low-wage, generally not requiring a college degree.

The descent into Walmart-like employment is disproportionately hurting minorities. In 2013, an astonishing 55.9 percent of employed black recent college graduates were underemployed, working in an occupation that typically does not require a four-year college degree.

At the other end of the Walmartization, families in the top 5% made anywhere from $300,000 to $40 million -- in just one year.


5. Toward Third-World Status: Our Shrinking Middle Class Gets a Smaller Cut of National Wealth than Anywhere except China and India

From a global perspective, we're becoming the type of country that we used to dismiss as "third-world." Among developed and fast-rising nations only the middle classes of China and India get a smaller cut of their country's wealth than in the United States. Both of them are rapidly catching up to us.

Antidote

Thomas Piketty recommends a global wealth tax to help reverse inequality. But a financial transaction tax (also called speculation tax or Robin Hood tax) would be easier to implement, more efficiently regulated, and a source of massive revenues at little cost to financial traders.

Whatever method we choose, progressive thinkers in the U.S. and around the world will need to unite on a single cause, much as the Tea Party did in its crusade against government. We can't afford to disagree among ourselves as paralysis sets in.

ACLU By ACLUSponsored

Imagine you've forgotten once again the difference between a gorilla and a chimpanzee, so you do a quick Google image search of “gorilla." But instead of finding images of adorable animals, photos of a Black couple pop up.

Is this just a glitch in the algorithm? Or, is Google an ad company, not an information company, that's replicating the discrimination of the world it operates in? How can this discrimination be addressed and who is accountable for it?

“These platforms are encoded with racism," says UCLA professor and best-selling author of Algorithms of Oppression, Dr. Safiya Noble. “The logic is racist and sexist because it would allow for these kinds of false, misleading, kinds of results to come to the fore…There are unfortunately thousands of examples now of harm that comes from algorithmic discrimination."

On At Liberty this week, Dr. Noble joined us to discuss what she calls “algorithmic oppression," and what needs to be done to end this kind of bias and dismantle systemic racism in software, predictive analytics, search platforms, surveillance systems, and other technologies.

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