Tuesday, February 28, 2006

The Ever Widening Spread Between Haves and Have-nots

America is fundamentally broken.

In 1960 the gap in wealth between the top 20% and the bottom 20% was 30-fold. Today it's 75-fold.

Thirty years ago the average annual compensation of the top 100 CEOs was 30 times the pay of the average worker. Now, it's 1,000 times.

As great wealth has accumulated at the top, the rest of society has failed to keep up. The top 10% of earners have captured almost half the total income gains in the past four decades. The top 1% have gained the most -- more than all the bottom 50% combined. Meanwhile, working men and women and their families are strained to cope with the rising cost of health care, housing, and higher education -- all of which have risen in price much faster than typical family incomes.


Blogger John said...

The gap may be true, but what you leave out are any comments on "income mobility".

As people age and climb through their career, their income also changes. A true measurement of a fair economic system is not the gap between rich and poor, but how many people climb up or move down.

The income gap analysis you refer to is too simple. The rich do not get richer and the poor, poorer. There is instead a constant dynamic movement between the levels. Rich become poor, and poor become rich.

The proportions of poor may remain constant, but they aren't the same poor - e.g. new entrants into the market.

For the record, the USA has some of the highest income mobility in the world. That is the true test of a functional market system: merit begets returns.

11:36 PM  

Post a Comment

<< Home