Forget the 1% It is the 0.01% who are really getting ahead in America
http://www.economist.com/news/finance-and-economics/21631129-it-001-who-are-really-getting-ahead-america-forget-1
The article talks about the growing inequality in the share of wealth held. In 1976 about the share of wealth held by the top 1% was at about 19%. Compared to in 2000 the percentage shared by the 1% was 21%. This 2% increase is pretty unheard of, the percentage change in wealth held is usually very small percentage changes. Before the great depression the middle class (bottom 90%) controlled about 16% of the wealth, and the top .01% controlled about 25%. Once the great depression hit the trend reversed and the bottom 90% started increasing their share of wealth. Their share continued to grow all the way to 36% until the early 1980s. Where once again the trend had reversed and the bottom 90 started losing their share of wealth again. The author suggests that main reason that this income disparity is increasing and returning to pre Great Depression numbers has to deal with increasing debt of the middle class, largely homes values rising did not have much of and increase in wealth because mortgage debt was also rising as well.
This issue has definitely fought its way to the forefront of our social issues but I feel like these articles talk about the problem when they should be hypothesizing about solutions. Does this article provide any insight into what might solve this issue?
ReplyDeleteThe term "the rich get richer" describes this issue perfectly. When there is a recession or depression in the economy the poor and rich will take a hit, however the poor or middle class will always take a bigger hit because they have less income. What explains the vast increase of wealth occupation by the upper class after recessions is that the upper class can grow very very quickly. People with billions and billions of dollars can invest more and grow faster and thus control more of the wealth in the world than middle class workers.
ReplyDeleteThe increasing wealth gap is not a good thing for the economy as a whole. As the rich get richer, they will not use their increased income to consume more as people who are poorer would. The increased wealth gap is not a good thing for the economy as a whole.
ReplyDeleteThe recession hit the top percent of wealth holders hard, and has actually redistributed wealth. As the economy has recovered, so has the share of wealth that the top percent holds.
ReplyDeleteThis is a sad thing to see. The injustice that occurs as the distribution of wealth becomes more and more warped is clear and present in our society. Perhaps different housing options for the middle class, with less debt and a differently structured mortgage, would help to restore some equality?
ReplyDeleteIt's interesting to note the wealth disparity during the times of the Great Depression. Obviously times now are difficult and the distribution of wealth is problematic, but we have came a long way and are still are a way from those levels. As the economy grows and innovation continues, I believe the inequality will get better. This is an issue that takes a long time to solve even if all the correct policies are in place.
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