Growing Income Gap

The Eroding Base

Pew Research published a report about the shrinking middle class. I remember learning that the strength of this country was it's robust middle class. According to Pew the middle class has been eroding steadily for the past four decades.

Looking at the chart below reveals growth of the wealthy ranks and the poorer ranks. The result is an increasing income disparity.

Why does this matter?

According to a report from the Organization for Economic Co-operation and Development, there is a reduction in economic growth as wealth becomes concentrated among a smaller portion of the global population.

The International Monetary Fund released a report in June, 2015 that outlined the problems created by the rising inequality in income distribution.

• Inequality affects growth drivers.
• Inequality dampens investment, and hence growth, by fueling economic, financial, and political instability. 

           Financial crises.
           Global imbalances.
           Conflicts.

• Inequality can lead to policies that hurt growth. 
• Inequality hampers poverty reduction. 

You can read more at Causes and Consequences of Income Inequality:A Global Perspective

The prospect of increasing crisis, global imbalances and conflicts does not seem to be a bright prospect. If you take the downturn of the middle class and combine it with the growing ranks of impoverished, you can see the consequences of the continued accumulation of wealth among the top one percent and what it means for the rest of us. 

Unemployment Rate and African Americans

Black unemployment rate is consistently twice that of whites

Unemployment for African Americans is twice the rate for Whites. It has been that way since the 1950's when the Bureau of Labor Statistics started keeping track.  According to an article published by Fact Tank (Which is part Pew Research), the statistics are, in part, a result of Last In First Out (LIFO). The current unemployment rate among African Americans is 13.4% as opposed to 6.7% for whites. Couple this with the rate for African American teens at 43% and, you have a grim statistic. At the same time corporate profits are at an all-time high.

Corporate Profits Soar To Record, Now More Than Double Their Peak Under Ronald Reagan
The job creators...as they were called in the last election...are not creating enough jobs despite record profits. And, the jobs they are creating are low wage.

New jobs disproportionately low-pay or part-time

Back in the days when I was a history major (I went on to other things) there were studies about the growing tensions created when the income gap between the top 1% and the other 99% got too wide. The result was turmoil and revolution. So far we've avoided that in this country because of the strength of the middle class.The Progressives from the early 20th century understood this and, did something had to be done to break the corporate stranglehold on American or we would pay the consequences. The middle class is being deeply eroded. Minorities are suffering the most with the highest unemployment rates. 

How long can we continue on our current path? Is congress really going to stand up for us? We elect congress. I think we can do something about this.