By: Hugh B. Price
National Urban League
In recent days a spate of newspaper headlines have sketched the boundaries of a development on the American scene that is becoming more and more ominous.
Those headlines declared: "Factory Orders Tumble, Layoffs Surge,""Job Losses Continued in October,""Jobless Rate Rises to 5.7% in New Signs of Lagging Economy," "WorldCom Seems Close to Deal To Settle S.E.C.'s Fraud Case,""Corporate Loans Used Personally, Report Discloses,""Departing Chief Says I.R.S. Is Losing War on Tex Cheats,"and"Boom's End Is Felt Even at Wealthy Colleges."
The suddenness and severity of America's economic downturn, and, one must say, the financial scandals that have rocked Wall Street and some major American corporations, has thrown into sharp relief not just the economic pain lacerating the poor and the newly jobless.
It's also illuminated the chasm in wealth between the relatively small cohort of the richest Americans and the rest of the American people.
Paul Krugman, a New York Times columnist, laid out some of the data showing this remarkable gap in a long article in the October 20 New York Times Magazine.
Census data clearly show an extraordinary concentration of wealth in the hands of America's richest families: Over the past two decades the top 20 percent of families have gained an increasing share of societal wealth, Krugman wrote, as families in the middle classes have seen their share of societal wealth decline.
Furthermore, the upward draft of wealth continues within America's top 20 percent of families: the top 5 percent of families have done noticeably better than the next 15 percent, and the top 1 percent have done significantly better than the next 4 percent.
Krugman cites a recent study of the nonpartisan Congressional Budget Office that determined that between 1979 and 1997, the after-tax incomes of the top 1 percent of families rose 157 percent, compared with only a 10-percent gain for families near the middle of the income distribution ladder.
One result of that is that now the top one percent of the families get about 16 percent of total pretax income, and keep about 14 percent of after-tax income—a share that has roughly doubled over the past 30 years. Their share is now about as large as the share of the bottom 40 percent of the American population.
Krugman is far from the only observer sounding the alarm about the economic inequality gap. Kevin Phillips' new book, Wealth and Democracy: A Political History of the American Rich, explores the historical roots of the gap and its impact on the conduct of American politics today.
In a recent column for the Washington Post, Phillips put it bluntly, In the past two decades, he wrote, “puffed up by the boom in high-technology and finance, a select group of Americans has accumulated an even larger boodle in an even shorter period of time than the titans of the Gilded Age amassed 100 years ago. The numbers almost defy belief.”
Some observers have been warning of the rising economic inequality for years.
But their words were generally ignored because times seemed to be flush for most Americans.
Now, with millions of Americans out of work, with millions more clearly caught in a downwardly mobile economic spiral—many will never again earn as much as they did during the 1990s—the realization seems to be growing that this astonishing economic inequality threatens America as well: It threatens to undermine the belief that a rough equality of spirit and opportunity and fairness of treatment under law exists among us Americans.
For all that may be, rightly, said by leading economists and the official governmental stewards about the economy being on the slow road to recovery, at the level of ordinary Americans, many remain caught in perfect economic storm at a time when the federal and state safety nets have been shredded, and many others fear that it could engulf them at any moment.
Their pain and, for some, despair at their diminished personal circumstances is likely to become much sharper as the realization grows that the wealthiest Americans are serenely soaring well above the economic turmoil.
It's an understatement to say that America's rising economic inequality is not the kind of thing likely to foster a sense of “national unity” in this time of peril from the worldwide terror network.
Even more than that, however, America's rising economic inequality will undermine the historic vision of America as a society built and maintained for the well-being of, not the wealthy, but the middle class—a vision which promised a robust upward mobility for all those willing to work for it.
The worth of that essential character of America, that legacy of all the good America has achieved can't be calculated; it's priceless.
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