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Paul Buchheit
NationofChange / Op-Ed
Published: Monday 2 June 2014
The facts have to be told, to help explain the sickening sense that we’re becoming a nation without a middle class, paralyzed by the inequality deniers and excuse makers who refuse to admit there’s something wrong with their free-market capitalist system.

Toward the Total Paralysis of an Unequal Society

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The severing of our society into a plutocracy and a peasantry is so far along that statistics almost cease to have meaning. But the facts have to be told, to help explain the sickening sense that we're becoming a nation without a middle class, paralyzed by the inequality deniers and excuse makers who refuse to admit there's something wrong with their free-market capitalist system. The extremes are becoming almost intolerable.


 

1. A Broken System of Compensation: The Combined Salaries of 350,000 Pre-School Teachers is Less Than That of Five Hedge Fund Managers

Pre-school teaching may be our nation's most important jobNumerous studies show that with pre-school, all children achieve more and earn more through adulthood, with the most disadvantaged benefiting the most.

Hedge fund managers, at the other extreme, are likely to bet on mortgages to fail or on food prices to rise.

It's a frightening commentary on our value system that the total income of over a third of a million pre-school teachers is less than the combined income of just five big-money speculators.

2. Diminishing Support for Society: The 1% Made More from their Investments in 2013 than the Entire Cost of Social Security, Medicare, Medicaid, and the Safety Net

America's wealth grew by almost $9 trillion in 2013. The richest 1% own 34 percent of the wealth (Table 6 here or Table 2 here), or about $3 trillion of the 2013 gain.

That is far more than the budget for Social Security ($860 billion), Medicare ($524 billion), Medicaid ($304 billion), and the entire safety net ($286 billion for SNAP, WIC [Women, Infants, Children], Child Nutrition, Earned Income Tax Credit, Supplemental Security Income, Temporary Assistance for Needy Families, and Housing).

3. Capital's Long-Term Dominance of Labor: Since 1900, a Dollar of Labor has Grown to $127, a Dollar of Stocks to $1,247

There's a good reason why the super-rich are cleaning up in the stock market. Thomas Piketty explains that, barring war or depression, the return on capital far outpaces economic growth, causing average workers without a stock portfolio to drop further and further behind. A look at stock market growth over 114 years (Page 60) confirms that a dollar of capital is now worth ten times more than a dollar of labor value.

In recent years, the gains from continued worker productivity have gone to the 10% of Americans who own almost 90 percent of all stocks excluding pensions (which are fast disappearing).

4. The Walmartization of America: A Few Super-Rich at the Top, then Everyone Else

Just like at Walmart, a few big moneymakers are ruling over a great majority of increasingly low-income workers. Low-wage jobs ($7.69 to $13.83 per hour) made up 1/5 of the jobs lost to the recession, but accounted for nearly 3/5 of the jobs regained during the recovery. And it's getting worse. Nine out of ten of the fastest-growing occupations are considered low-wage, generally not requiring a college degree.

The descent into Walmart-like employment is disproportionately hurting minorities. In 2013, an astonishing 55.9 percent of employed black recent college graduates were underemployed, working in an occupation that typically does not require a four-year college degree.

At the other end of the Walmartization, families in the top 5% made anywhere from $300,000 to $40 million -- in just one year.

5. Toward Third-World Status: Our Shrinking Middle Class Gets a Smaller Cut of National Wealth than Anywhere except China and India

From a global perspective, we're becoming the type of country that we used to dismiss as "third-world." Among developed and fast-rising nations only the middle classes of China and India get a smaller cut of their country's wealth than in the United States. Both of them are rapidly catching up to us.

Antidote

Thomas Piketty recommends a global wealth tax to help reverse inequality. But a financial transaction tax (also called speculation tax or Robin Hood tax) would be easier to implement, more efficiently regulated, and a source of massive revenues at little cost to financial traders.

Whatever method we choose, progressive thinkers in the U.S. and around the world will need to unite on a single cause, much as the Tea Party did in its crusade against government. We can't afford to disagree among ourselves as paralysis sets in.



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ABOUT Paul Buchheit

Paul Buchheit is a college teacher with formal training in language development and cognitive science. He is the founder and developer of social justice and educational websites (UsAgainstGreed.org, RappingHistory.org, PayUpNow.org), and the editor and main author of "American Wars: Illusions and Realities" (Clarity Press). He can be reached at paul@UsAgainstGreed.org.

Sounds good but how long will

Sounds good but how long will it take for the wealthy to create a loophole around the law although I hope this law is enacted right away. The real change is to create something we can compete with the Chinese and do better without
the cheap labor seems like intellectual property is the only way out however;
when the product is made it will probably be made in China. Decentralizing our food source and energy is another way out as well creating good paying jobs locally. If insurance companies can sue cities for not compensating for global warming and increasing the drainage capacity. Then why cant we sue our representatives for not planning a more secure future for over half of the population throw the bums out on their asses and leave skid marks someone has to be held accountable. Insurance companies can point the finger why cant we do the same.

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