Here are a few passages from Jerry White's analysis
of a November 27th New York Times
article, " '04 Income in U.S. Was Below 2000 Level" by David Cay Johnston:
... the richest one-tenth of 1 percent of Americans took in 9.5 percent of all pretax income, or about $679 billion in 2004, excluding unreported income.
Referring to this elite group, the New York Times article notes, "those very top households, which include about 300,000 Americans, reported significantly more pretax income combined than the poorest 120 million Americans earned in 2004, the data show. This is a sharp change from 1979, the oldest year examined by the I.R.S, when the thin slice at the top received about one-third of the total income of the big group at the bottom."
This staggering fact reveals a great deal about the economic and political processes that have unfolded over the last quarter century. While the portion of national income controlled by America’s corporate and financial elite declined in the aftermath of the Great Depression and stabilized during the postwar period, over the last 25 years a massive social transformation has occurred and the share of the national income now controlled by America’s social oligarchy is at the highest levels since 1929. ...
The last 25 years has seen an enormous transfer of wealth from working people into the hands of America’s economic elite. With the full backing of both the Democrats and Republicans, corporate America responded to the decline of its competitive position in the 1970s by launching an unrelenting attack on the jobs and living standards of the working class that continues to this day. The enrichment of those at the top has come at the direct expense of the vast majority of the working population in America, whose share of national wealth has plummeted.
At the other pole of society is an increasingly impoverished working class, including some 25 percent of all workers who labor for poverty wages. The Times article notes that the bottom fifth of all taxpayers earned below $11,166 and their average reported income was only $5,743 each. Because the IRS includes a single individual or a married couple in its definition of a “taxpayer” the poorest 26 million taxpayers account for the equivalent nearly 48 million adults and about 12 million dependent children. According to the Times analysis, this means the poorest 60 million Americans have reported incomes of less than $7 a day!
The official poverty line in 2004 was $27 a day for a single adult below retirement age and $42 a day for a household with one child—although the real cost of attaining basic necessities is far higher. The Times article notes that the IRS income data does not include the value of government benefits like food stamps, earned-income tax credits and subsidized medical care. But the social programs for the poor—including federal welfare assistance—have largely been wiped out or curtailed and what programs do remain are not sufficient to lift families out of poverty.
It is often noted that 3 billion of the world’s poorest people live on less than $2 a day. In the US, where the cost of living is far higher, $7 a day is only enough to guarantee a life of destitution. The fact that 60 million people live in such dire poverty—and tens of millions more could face the same fate if they lost their jobs or confronted some other financial catastrophe—is a damning indictment of American capitalism and the free market model it touts around the world. ...
Labels: inequality, poverty