The State of
The Fading American Dream:
Equal opportunity and equality – bedrock values of our nation – are being undermined.
Inequality between rich and poor has become increasingly apparent in things like income distribution, unemployment, health coverage, consumer debt, poverty, class issues, and education.
Since late last year, the Los Angeles Times, The New York Times and The Wall Street Journal have published multi-part series addressing rising inequality in
The L.A. Times series, entitled "The New Deal," zeroed in on what reporter Peter Gosselin called "a quarter-century-long shift of economic risks from the broad shoulders of business and government to the backs of working families." He wrote about the measurably increased risks that Americans must bear as they provide for their families, pay for their houses, save for their retirements and seek a better quality of life.
"A broad array of protections that families once depended on to shield them from economic turmoil--stable jobs, widely available health coverage, guaranteed pensions, short unemployment spells, long-lasting unemployment benefits and well-funded job training programs--have been scaled back or have vanished altogether." (SOURCE: Peter Gosselin, L.A. Times)
Income Inequality:
The share of income going to the richest 1 percent grew significantly in 2003 while the share going to the remaining 99 percent of Americans fell. (SOURCE: Internal Revenue Service). This should come as no surprise after years of tax giveaways to the wealthy, among other things.
The tax cuts that took effect between 2001 and 2003 exacerbated the income gap by redistributing income from lower to higher-income households. Income inequality in the
In 2004, an average CEO made 430 times the salary of the average production worker. Up from 301-1 in 2003. Up from 109-1 in 1990. From 2003 to 2004, the average annual CEO salary – ranging from $10 million to $12 million – increased by 12 percent.
How do CEOs get to make so much money? One sure way for them to boost their country-club-level salaries is to outsource American jobs. Average CEO compensation at the 50 firms outsourcing the most service jobs in 2003 increased approximately by half, compared to only a 9 percent average increase for all CEOs at the 365 large companies surveyed by Business Week. (Source: 2004 report of United for a Fair Economy.) (From 2001 to 2003, the top 50 outsourcing CEOs earned $2.2 billion while happily sending an estimated 200,000 jobs overseas.)
In contrast, the average annual non-supervisory worker pay – $27,485 – increased just 2.2 percent. (Source: ABC News and Study by compensation consultant Pearl Meyer & Partners for The New York Times.) Similarly, the purchasing power of the federal minimum wage has fallen to a 56-year low due to the effects of inflation, the Economic Policy Institute reported in September.
(SOURCE: www.epi.org/content.cfm/epi_cbpp_20050901)
“The other path, where many of the current trends are pointing, leads toward an economy like the one we experienced during the 1980s, with large and growing budget deficits, high average unemployment, sharply growing inequality, and declining real wages and incomes for many in the bottom half of the income scale.”
(SOURCE: Economic Policy Institute, Senior Economist Jared Bernstein, The State of Working America 2004/2005, Sept. 2004).
Unemployment:
At the end of 2004, the nation remained in a “jobless” recovery with an unemployment rate at 5.4 percent, stuck at about the same level it was when this recovery began in 2001. (SOURCE: Economic Policy Institute)
“So far, the recovery has not generated either the quantity or quality of jobs families need to lift their living standards. . .The costs of basic necessities like health care, housing, and college keep rising, and many working families’ incomes are not keeping pace.” (SOURCE: Economic Policy Institute, Economist Sylvia Allegretto, co-author of The State of Working America 2004/2005, Sept. 2004)
Health Issues and Consumer Debt:
Since 2004, the number of people without health insurance grew from 45 million to 45.8 million. (SOURCE:
Consider this: in the United States, unlike any other advanced country, many people fail to receive basic health care because they can't afford it. Lack of health insurance kills many more Americans each year than Katrina and 9/11 combined.
A study released earlier this year calculated that more than 83,000 African Americans die each year as a result of pervasive inequalities in the nation’s social, economic and healthcare systems. (SOURCE: Former Surgeon General David Satcher)
Health insurance also is partly to blame for personal debt being at an all-time-high. Average individual credit card debt is twice what it was 10 years ago. Besides health insurance, much of the borrowed money goes to pay for school costs, catastrophic illnesses, long-term care for aging parents, and retirement. This last one has become a rising issue given the virtual obliteration of the private pension system over the past few years. (SOURCE: Jonathan Tasini, President, Economic Future Group)
Poverty, Class and Education:
Since 2004, the nation's poverty rate rose to 12.7 percent of the population, which represents the fourth consecutive annual increase. The last decline in overall poverty was in 2000. (SOURCE:
In 2004, 37 million people were in poverty, up 1.1 million from 2003.
For the fourth straight year, the number of children in
In terms of inequality, “the
America has “an economy that is slowly stratifying along class lines. Upward mobility is determined increasingly by a college degree that's attainable mostly by those whose parents already have money or education.”
(SOURCE: Aaron Bernstein, Business Week)
Over the last two decades, enrollment at four-year colleges increased by 20 percent for the richest segment of Americans, while it declined for lower-income Americans. (SOURCE: Columnist David Brooks wrote in a recent New York Times article.) High school dropout rate for Latinos is twice the national average.
“Once seen as a global exemplar of egalitarianism and middle-class opportunity,
(SOURCE: Jim Lardner, journalist and the founder of Inequality.org, and David Smith, senior fellow at Demos, a New York City-based think tank, in their forthcoming book Inequality Matters: The Growing Economic Divide in
 |
 |
