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The one big message 2011’s Occupy Wall Street protests brought to light was income inequality: how the 1 percent owns so much and how the rest of civilization owns so little.
A new study by the RAND Corporation, in collaboration with the Fair Work Center, has clarified just how much the vast majority of Americans are being robbed: $2.5 trillion a year.
The two lead authors of the RAND study, Carter C. Price and Kathryn Edwards, stated, “We estimate the aggregate income for the population below the 90th percentile over this time period (1975-2018) would have been $2.5 trillion higher in 2018 had income growth since 1975 remained as equitable as it was in the first two post-War decades.”
To make it even more concrete, the research shows if income had been distributed as equitably as it had been in 1975, the average worker in the U.S. would be earning $92,000 a year instead of the current $50,000.
Nick Hanauer, one of the creators of the study, said, “We were shocked by the numbers. It explains almost everything. It explains why people are so pissed off. It explains why they are so economically precarious.”
David Rolf, president of the Fair Work Center, stated, “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.”
The report includes graphs that illustrate just how, from 1973 to 2013, the U.S. productivity rate rose 74.4 percent while hourly compensation for workers went up only 9.2 percent.
The study showed that American workers missed out on $50 trillion over several decades in what is known as the upward redistribution of income. Time magazine wrote the amount “would have gone into the paychecks of working Americans had inequality held constant” and would have allowed many Americans to enter the coronavirus lockdown in a much better financial situation.
The amount would have been enough to pay every worker in the bottom nine deciles $1,144 a month for every year over four decades.
COVID Killer
As we have noted from the onset of the lockdowns, the economic fallout has been felt far and wide in the U.S. economy, but no category absorbed the brunt like those in the lowest income, such as hospitality, restaurant, entertainment, tourism, theme parks, seasonal jobs, and workers in jobs deemed “non-essential.”
What none of the media or politicians were talking about in February, March, and April, when the draconian “shelter in place” dictates were imposed, were the implications, which we had warned about, from their launching the COVID War.
CNBC reported last week that about three in ten Americans have decreased the amount of money they’re putting into their retirement accounts or have stopped saving at all due to the economic strains from the lockdowns. About 30 percent of those saving money have dipped into their accounts over the past 60 days, according to the report.
New York magazine wrote what the Trends Journal has been writing about for nearly a decade but only now has become more obvious to those who see what is happening. As the income discrepancies are becoming more obvious, New York said the RAND study showed “the 1 percent’s total victory in the 50 Years Class War.”
Richest Getting Richer
The total net worth of the richest individuals in the U.S. increased by $845 billion over the first six months of the pandemic, increasing their total fortunes from $2.95 trillion to $3.8 trillion, a report this week said.
That’s almost a 30 percent increase in just over six months, according to calculations from the Institute for Policy Studies and Americans for Tax Fairness. Both studies used data from Forbes.
Business Insider, citing a recent study by the Institute for Policy Studies, reported the study included 643 of the richest people in the U.S., which includes names like Amazon’s Jeff Bezos; Tesla’s Elon Musk and the “Oracle of Omaha” Warren Buffett.
Most of the increase is the result of a booming stock market. Jeff Bezos, CEO of Amazon, now worth $113 billion, watched his company’s stock go up 40 percent as millions of Americans, obeying stay-at-home orders, passed the time buying products online. In addition, businesses invested more in Amazon’s Cloud Services to support millions of employees working remotely from home.
“The difference is stark between profits for billionaires and the widespread economic misery in our nation,” Chuck Collins, the director of the Institute for Policy Studies’ Program on Inequality, told Business Insider. “Clearly, the priorities of our elected officials in Washington, D.C. are completely upside down.”
Along with highly publicized winners such as Bezos and Elon Musk, CEO of Tesla, who is now 273 percent richer than six months previous, many of the top 1 percent in wealth benefited from the historically low interest rates manipulated by the Fed, helping the stock market to rise 34 percent since March.
Collins said the coronavirus was to blame for “supercharging” the country’s “existing inequalities.”
The U.K.’s Independent newspaper reported the current level of unemployment in the U.S. is about four times higher than before the virus outbreak, and 11.5 million Americans have lost their jobs since the beginning of the year.
Despite those numbers, the Federal Reserve has kept interest rates at rock-bottom levels and injected trillions into the economy to avert disaster. Despite the issues on Main Street, the S&P 500 is up by 34 percent since March, according to Business Insider.
CNN Business reported that, besides Amazon, the combined wealth of the Walton family, which is behind Walmart stores, has also exploded by more than $60 billion since the beginning of the year.
Collins told the network it is up to Congress to fix the discrepancies or the wealth concentration will continue to damage the country.
“A few people are going to have an extreme amount of power to shape the economy, politics, the media,” Collins said. “None of us are going to want to live in a society like that, where your Main Street no longer has 100 shops. It just has an Amazon loading depot.”
TRENDPOST: Beyond the U.S., income inequality is a global trend. As we have been reporting in the Trends Journal, Oxfam research shows the world’s 2,000 billionaires have more combined wealth than the 4.6 billion people who comprise 60 percent of the world’s population.
TREND FORECAST: Our “OFF WITH THEIR HEADS 2.0” trend from December 2019, forecasting the global rise in anger directed at the 1 percent, was already spreading globally prior the 2020 COVID War.
The great wealth gap followed by the destruction of small businesses by politicians who launched the COVID War while allowing the Bigs to get bigger will be a key platform in the formation of new political parties across the globe. As the gap between the rich and poor widens, so, too, will the animosity between the “haves” and “have nots.”
Gated communities will increase in popularity and more private security will be hired by the haves who will be gangland targets.