Andrew Jackson may have been the first to register the complaint in the following terms. “When the laws undertake… to make the rich richer and the potent more powerful, the humble members of society… have a right to complain of the injustice to their Government.”
The phrase was popularized in a hit song from 1920, ‘Ain’t we got fun?’ ‘The rich get rich and the poor get poor / In the meantime, in between time / Ain’t we got fun?’
It was never more true than today.
Perhaps the leading American scholar of economic inequality – a fine academic phrase but a lousy message – is Emmanuel Saez, a UC Berkeley economist who has charted waxing and waning wealth concentration beginning in 1913.
Today, the wealthiest 10 percent of Americans take home a larger share of the nation’s income than at any point since data became available. The earlier high preceded the Great Depression. But from the mid-1940s until 1980, the richest 10 percent garnered about 33 percent of American’s total income. Their share then began climbing, culminating in 2012 (the most recent data available), when the wealthiest 10 percent received more than half – 50.4 percent – the nation’s income. Most of those riches are further concentrated in the top 1 percent, who take home more than 20 percent of the country’s income.
THE WEALTHY DO NOT NEED TO BE REWARDED AT THIS LEVEL TO BE ‘JOB CREATORS.’
These data answer one question clearly: It does not have to be this way.
Some inequality is inevitable. But America and Americans did quite well in the post-World War II era with vastly less inequality than we have now.
Putting the point more sharply, in terms often used by Republicans, the wealthy do not need to be rewarded at this level to be “job creators.” They are willing to make more money for themselves even if they have to share it.
During the economic expansion of the Bush years, incomes of the wealthiest 1 percent swelled by 61.8 percent, while incomes for everyone else increased by just 6.8 percent. And in the current recovery, incomes for the 1 percent increased 31.4 percent, but that was no help to others for whom the tide only rose by 0.4 percent.
Former President Clinton demonstrated the economy can be made to work for everyone. During his term the 1 percent saw their incomes jump by a healthy 98.7 percent, but the rest of the country got a real benefit too, with incomes growing 20.3 percent. The rich got richer, but the rest of the country captured some benefit.
If inequality is not inevitable, why has it increased? In part, it’s because taxes for the wealthiest Americans have gone down. From 1953 to 1973, when the top marginal tax rates were 70 percent or higher, income growth for both the top 1 percent and the ‘bottom’ 99 percent was strong. When top tax rates began to slide, income for the 1 percent surged, while the rest of the country began to stagnate.
It’s time, as Jackson advised, for Americans “to complain of the injustice to their Government.”
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Income inequality are encountered in most countries. As the latest report issued by Forbes states that net worth of the super rich Americans climbed last year. The income gap between the wealthy elite and the shrinking class is bigger than it was few years ago. Learn more about income inequality here.
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