Racial Inequality Is Hollowing Out America’s Middle Class

Kenneth Worles Jr. / Institute for Policy Studies

America’s middle class is under assault.

Since 1983, national median wealth has declined by 20 percent, falling from $ 73,000 to $ 64,000 in 2013. And U.S. homeownership has been in a steady decline since 2005.

While we often hear about the struggles of the white working class, a driving force behind this trend is an accelerating decline in black and Latino household wealth.

Over those three decades, the wealth of median black and Latino households decreased by 75 percent and 50 percent, respectively, while median white household wealth actually rose a little. As of 2013, median whites had $ 116,800 in wealth — compared to just $ 2,000 for Latinos and $ 1,700 for blacks.

This wealth decline is a threat to the viability of the American middle class and the nation’s overall economic health. Families with more wealth can cover emergencies without going into debt and take advantage of economic opportunity, such as buying a home, saving for college, or starting a business.

We looked at the growing racial wealth gap in a new report for the Institute for Policy Studies and Prosperity Now.

We found that if these appalling trends continue, median black household wealth will hit zero by 2053, even while median white wealth continues to climb. Latino net worth will hit zero two decades later, according to our projections.

It’s in everyone’s interest to reverse these trends. Growing racial wealth inequality is bringing down median American middle class wealth, and with it shrinking the middle class — especially as Americans of color make up an increasing share of the U.S. population.

The causes of this racial wealth divide have little to do with individual behavior. Instead, they’re the result of a range of systemic factors and policies.

These include past discriminatory housing policies that continue to fuel an enormous racial divide in homeownership rates, as well as an “upside down” tax system that helps the wealthiest households get wealthier while providing the lowest income families with almost nothing.

The American middle class was created by government policy, investment, and the hard work of its citizenry. Today Americans are working as hard as ever, but government policy is failing to invest in a sustainable and growing middle class.

To do better, Congress must redirect subsidies to the already wealthy and invest in opportunities for poorer families to save and build wealth.

For example, people can currently write off part of their mortgage interest payments on their taxes. But this only benefits you if you already own a home — an opportunity long denied to millions of black and Latino families — and benefits you even more if you own an expensive home. It helps the already rich, at the expense of the poor.

Congress should reform that deduction and other tax expenditures to focus on those excluded from opportunity, not the already have-a-lots.

Other actions include protecting families from the wealth stripping practices common in many low-income communities, like “contract for deed” scams that can leave renters homeless even after they’ve fronted money for expensive repairs to their homes. That means strengthening institutions like the Consumer Financial Protection Bureau.

The nation has experienced 30 years of middle class decline. If we don’t want this to be a permanent trend, then government must respond with the boldness and ingenuity that expanded the middle class after World War Two — but this time with a racially inclusive frame to reflect our 21st century population.

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Report: Reversing Inequality

While there is now widespread understanding that extreme income and wealth inequality is growing and has negative impacts on society, most proposed solutions fail to address deeper systemic drivers. While technological change and globalization have supercharged inequalities, they are not the primary drivers.

This report, released with the Next Systems Project, offers a more critical explanation for extreme inequality and the ways in which the rules governing the economy have been distorted by power differentials and political factors. These rules –including tax, trade, regulation, public subsidies, and expenditures – have been tipped to advantage asset owners over wage earners, and transnational corporations over domestically-rooted enterprises. As a result, we are living with a particular flavor of a market economy – hyper-extractive monopoly capitalism – that is transferring wealth from workers and communities upwards to a small segment of the population.

Another driver of inequality is systemic racism and a legacy of discrimination in wages and wealth-building. These forces are impossible to separate and disentangle from other drivers of inequality. Policy interventions that don’t incorporate an understanding of systemic racism will fail to reverse or compound existing inequalities. And false solutions like a New Deal 2.0 program, including government stimulus packages, fail to recognize the ecological limits to traditional growth and the need to operate within the earth’s carrying capacity. The only path forward is building resilient communities that can bounce back from environmental and economic challenges.

This paper describes a full menu of “interventions” to reduce income and wealth inequality and address some of the systemic drivers of inequality. They fall into four categories, including policies that:

  • Lift the Floor, establishing minimal standard of living and safety nets
  • Level the Playing Field, by ensuring investments in public goods and elimination of the distorting influences of power and privilege
  • Deconcentrate Wealth, through interventions that directly reduce the concentration of wealth and power
  • Rewire the System, to undercut inequality drivers

One way forward is to build power and win some of these rule changes by focusing on “pressure points” that can accelerate the transition to the next system. This will require game changing campaigns that accomplish three things:

  • Reduce the concentration of wealth and power, break up institutions, or redistribute wealth and power.
  • Open up economic opportunities for those excluded in the current system.
  • Capture the imagination of a wide constituency of people willing to fight for policy change.

Three examples in the paper are:

  • Dividends for all: linking common wealth sources of revenue to programs that expand economic stability
  • Taxing excessive carbon solution and directing revenue to investments in renewable energy, green infrastructure and just transition efforts.
  • Expand tuition-free higher education by creating education trust funds funded by progressive taxes on wealth.

Read the full report here [PDF].
Download Quick Takeaways from the report here.
Find shareable graphics here.

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On Fighting Inequality, Which Nations Do More than Pay Lip Service?

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London Fire Fuels Movement to Tackle Inequality in Britain

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(Photo: ChiralJon / Flickr)

Just hours after a 24-story London apartment building went up in flames on June 14, Faiza Shaheen appeared on Britain’s Sky TV to connect the dots between this horrific tragedy and the city’s rank as one of the world’s most unequal.

Inequality.org co-editor Chuck Collins and I sat down with Shaheen the following day, as the death toll, now estimated at 79, continued to rise. We talked about the public anger over the fire and what she sees as the related outcry for economic and racial equity that resulted in an unexpectedly strong showing for the UK Labour Party in the country’s June 8 election. Shaheen directs the Centre for Labour and Social Studies (Class), a London-based think tank.

Inequality.org: What’s the connection between the Grenfell Tower fire and London’s extremely high levels of inequality?

Faiza Shaheen: The neighborhood surrounding the tower has the biggest gap between rich and poor of any in the country. It’s a very wealthy area, but the people living in this particular tower were mostly working class ethnic minorities. Also, in terms of voice, you see the disparities. People living in this building had clearly spoken out about the problems with safety — you can find their blogs online. But they also said they knew nothing would be done until there’s a catastrophe. Well, now that’s happened and we need to make sure the authorities can’t just brush this away anymore.

Inequality.org: How much was the recent election about inequality?

Faiza Shaheen: I would say inequality was fundamental to understanding the narrative of this election. When it was first announced, people thought it would be about Brexit again. But the Labour Party very effectively pivoted away from that. Their language was about the elites and about the rest of us not getting salary increases and facing cuts to public services.

We’ve had these cuts for the past seven years, but people were far more aware of them in this election than in the last one. We heard about parents getting letters from their children’s teachers saying they didn’t have money because of the budget cuts and asking for donations. With the terror attacks in London and Manchester, there was a lot of talk about the culling of police officers and how that had affected community policing.

The conservatives thought we could have a conversation about being strong and stable. But as a country it’s very obvious that we’re not strong and stable right now.

Inequality.org: Didn’t Prime Minister Theresa May initially make some proposals to reduce inequality?

Faiza Shaheen: When she first became prime minister less than a year ago, she spoke in quite strong terms about inequality. But in this election she didn’t appeal to that language very much. And on some things, she reversed her position. For example, at one point she called for requiring large corporations to have worker representatives on their boards. Then later she said this could be voluntary and the “workers” could be managers. So it’s completely meaningless. Conservatives showed themselves to be very out of touch by sticking with the status quo.

Inequality.org: In the end, the Labour Party did gain 30 seats and the Conservative Party lost their majority, but Prime Minister May is still hanging on to power by pursuing a coalition with a small Northern Ireland party. Where do you see things going in the next year?

Faiza Shaheen: Most people think they’ll be going into election before the end of the five-year term because the Conservatives are really weakened. To build support, they’ll need to put more money into education and the National Health Service. They came across as quite mean in the campaign. When nurses asked ministers why they haven’t had a pay raise, they were told very dismissively that there isn’t a “magic money tree.” We’ve got nurses going to food banks. That really connects with people emotionally.

Inequality.org: Brexit negotiations began on June 19. How might this affect inequality?

Faiza Shaheen: The decision to withdraw from the European Union has already weakened the pound, making inflation worse. Because they don’t know what will happen, businesses are holding back on investments that could boost productivity. And while wages don’t always rise with productivity, this means we’re likely to continue to have stagnation in most sectors. Combined with automation and the lack of strong trade union rights, this could mean even worse inequality under Brexit.

Inequality.org: Where’s the movement energy now for tackling inequality?

Faiza Shaheen: With Labour doing so well, we feel there’s a mandate now to lift the pay cap on public service workers. We also feel May will have to abandon her plans to expand grammar schools, which are free schools that are academically selective. The evidence shows they don’t help with social mobility and they tear the school system apart. That can’t happen now.

We also think we can take advantage of the Conservative Party’s statements about addressing excessive pay at the top. They pledged to require corporations that receive public contracts to report their CEO-worker pay ratio. And even May’s weak current position on worker representation on boards gives something to push for that could affect executive pay. From the experiences in Germany and elsewhere we’ve seen that executives don’t want to talk about giving themselves bonuses with workers at the table.

Labour proposed to tax the top 5 percent much more and leave bottom 95 percent as is. That drew a lot of support but the Conservatives are very unlikely to support that.

Inequality.org: Like Bernie Sanders, Labour Party leader Jeremy Corbyn did very well among young voters. Do you think this bloc will continue to be mobilized?

Faiza Shaheen: It was amazing to see tons of people coming out to volunteer for the campaign for the first time and really passionate about what Labour was calling for, especially young people. There was an app so that you could find your nearest marginal neighborhood, where it could go one way or another, and you could just turn up and help knock on doors. But they had so many volunteers they had to turn many away.

Labour had much less money than the Conservatives, but they really won the branding war. Corbyn definitely came out as cooler. There was even #Grime4Corbyn. People made videos with grime music mixed with Corbyn speeches, which worked well to encourage turnout by young people and ethnic minorities.

We’re in a political quagmire now in terms of the makeup of parliament. In terms of the movement, people are really enthused and passionate. Horrible things keep happening but they are a reminder that we need to keep fighting. It will be really important to keep the pressure up and find ways to campaign – it might be single issues, it might be Grenfell Tower and how we get justice there. Some of it will happen naturally because people have made friends through their political work.

We’re in permanent campaign mode now.

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Who’s To Blame for Inequality?

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Inequality Makes Us Sad

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(Photo: Shutterstock)

On average, our economy tanks every seven years or so. By now we should have a pretty good idea of why that tanking happens, how we can protect ourselves, and what the impact will be. Unfortunately, we don’t.

Recessions remain a bit like death, inevitable yet near impossible to predict. Like death, recessions also generate sadness. The Great Recession, a new collection of research papers out of the Russell Sage Foundation shows, generated a great deal of sadness.

In 2010, one year after the official end of the Great Recession, reported happiness hit its lowest level since researchers first started recording the measure in the mid 1970s.

This shouldn’t be too surprising. In the Great Recession, home prices tanked, unemployment skyrocketed, and retirement accounts shriveled up. And many of the families the Great Recession hit the hardest have not recovered financially, leaving millions of households now more susceptible to the next downturn, not less.

“Americans are financially worse equipped to handle unemployment now than a generation ago,” the Russell Sage researchers point out “thanks to deteriorating household wealth and unemployment insurance benefits.”

Endurance athletes and psychologists will both tell you that humans can adeptly block out memories of pain and suffering. In the retelling of stories, we often gloss over the ugly parts and choose to remember the pleasantries. This also appears to hold true for macroeconomics.

In the period since the last recession, the stock market has more than tripled in value. Yet this increase has essentially only benefited those at the top. Our too-big-to-fail banks have grown even bigger, and reckless behavior has returned to the financial markets. Inequality has also been rising steadily, with nearly all the income gains of the “recovery” going to the top 1 percent.

Public policy holds much of the responsibility for this growing inequality. The federal minimum wage has not budged from $ 7.25 an hour, a go-hungry wage for families. Federal tax expenditures — mortgage subsidies and beyond — go overwhelmingly to the already wealthy and do little to help low- and middle-income workers save.

That reality hits Black and Latino families particularly hard. Racist policies have blocked them from wealth-building opportunities for generations.

The researchers at Russell Sage have provided a sober reminder that the Great Recession brought with it brutal and wide reaching pain. We need to take action now to soften the blow of the next recession and prevent the suffering we know is coming. Changing our public policies to reach these goals, the data show, will make us a happier.

Read the new Russell Sage research collection in the Foundation’s Journal of the Social Sciences.

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The Myths Behind Inequality in Our Country

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(Photo: Democracy Chronicles/ Flickr)

The gap between the rich and poor has been growing for decades. Some claim this growing gap is the natural result of smart, hard workers getting what they deserve (fabulous wealth) and lazy, mediocre workers getting what they deserve, too (poverty).

This framing is fundamentally wrong.

Consider, as Haitian filmmaker Raoul Peck points out, that Bill Gates’ net worth exceeds 30 years’ worth of the entire collective output of Haiti. Consider further that Gates’ full time job right now is to give away his money. All day, every day — through the Bill and Melinda Gates foundation — the Microsoft founder seeks ways to give away his enormous fortune.

Despite his best efforts, Gates’ treasure continues to rise, not shrink, year after year by more than 10 percent — meaning his $ 80 billion could become $ 1 trillion before his 90th birthday. That’s trillion with a T.

This is obviously an extreme example, but it’s illustrative.

Today’s inequality isn’t driven by individual choices, but by an unfair system that enables a few (mostly white) people to become wealthy, while many (mostly non-white) families are unable to build wealth.

The racial component of our growing divide is often overlooked, but it’s a critical part of just how unfair our economic system is. If current trends persist, it would take the average black family 228 years to reach the level of wealth the average white family already has today.

For comparison, George Washington started his presidency 228 years ago. It’s a long time.

If you think the main driver of poverty is lazy takers sitting around rather than working, the solutions to poverty are pretty straightforward: Eliminate public programs that help the poor, so they have to pull themselves up by their bootstraps. That’s essentially the doctrine of the modern Republican Party.

But imploring people to simply work harder ignores the fact that most jobs don’t pay enough to get ahead. The federal minimum wage, $ 7.25 an hour, isn’t enough to live on in any major city in the country. And half the jobs in the United States pay less than $ 15 an hour.

Getting an education isn’t a guaranteed pathway out of poverty either. Consider, as New School professor Darrick Hamilton points out, that black college graduates only own about two-thirds the wealth of white high school dropouts.

Creating a more fair and just economy will require solutions at the systemic level, not the individual level. That means acknowledging the unfair starting points we all begin with and taking steps to level the playing field.

One idea for how to do this is through baby bonds, also known as child savings accounts. This would basically start every child with a small savings account at birth, which would appreciate over time and could be used for getting an education or starting a business later on.

A 1992 bill called KidSave, for example, would’ve given $ 1,000 to each of the 4 million babies born in the United States. That would’ve grown to an estimated $ 700,000 each by age 65 thanks to the wonder of compounding interest.

Had child savings accounts been established in 1979, the racial wealth gap would be 82 percent lower than it currently is, according to the Annie E. Casey Foundation. The gap within racial groups would likely be smaller, too.

Other systemic ideas include including instituting single-payer healthcare, ending mass incarceration, investing in debt-free higher education, and much more.

To create a more fair and just economy, one first must recognize that the current economic system is deeply unfair and unjust. Then the work to change the system can begin.

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Right-Wingers Want Us to Accept Inequality and Move On

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(Photo: Prazis/Shutterstock)

Cheerleaders for concentrated wealth have a new reason to cheer. They have chanced upon a fresh rationalization for inequality.

This new rationalization comes from an unlikely source, a sober and thoughtful just-published book from a distinguished historian and classicist, Stanford’s Walter Scheidel.

In The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-First Century, Scheidel builds upon his considerable academic expertise on the ancient world and explores how and when societies have actually become less unequal. In the process, he has brought forth a book that could hardly be more profoundly depressing.

Scheidel’s basic thesis: Down through history, only “massive and violent disruptions of the established order” have generated “big equalizing moments.”

“It is almost universally true,” he advises, “that violence has been necessary to ensure the redistribution of wealth at any point in time.”

The violence that Scheidel details has taken various forms over the millennia, from war and plagues to revolutions and utter collapses of civil authority. All this violence has exacted a heavy price on humanity, in everything from lives to liberty.

Even worse, the greater levels of equality this violence has ushered in, The Great Leveler relates, has never been sustainable. In instance after instance, inequality has always returned, often at even fiercer levels than before.

The good news? Scheidel essentially has none. On the one hand, “nobody in his or her right mind” welcomes violence. On the other, Scheidel sees no easy, peaceful, incremental route to more meaningfully equitable distributions of income and wealth.

“Business as usual may not be enough,” Scheidel cautions. “We have to think harder about how to bring change in today’s world.”

By change, Scheidel means greater equity, an outcome most people in the world today would likely consider worth pursuing. But not all people. In our contemporary unequal world, we have among us a number of folks who see nothing particularly wrong with grand concentrations of private wealth and power. These folks now seem to see Scheidel as an ideological godsend.

Scheidel hasn’t invited this bubbly appreciation from the right. The Great Leveler offers up no impassioned defense for maldistributions of income and wealth. Quite the opposite. Scheidel invites us to think deeply about inequality and come up with something “innovative and original” enough to “create lasting change.” The conservatives now celebrating Scheidel’s book don’t want us thinking at all about “lasting change.” They want us to simply accept our current maldistributions as inevitable and irreversible.

Only “bloody suffering,” as the Cato Institute’s Ryan Bourne puts it, ever produces more equality, and that equality “comes at too high a cost.” So let’s simply instead “accept the historical facts” that Scheidel gives us, he counsels, and abandon “equality as a central ambition.”

For fans of grand fortune like Bourne, the notion “that more equality generally is necessarily better” amounts to a silly “value judgment” that “should surely be put to bed by the long sweep of history.”

We need not, in other words, make any moves that challenge our top-heavy world economic order. We don’t need, Bourne believes, “much higher minimum wages” or “unionization” or “punitive income tax rates” on our wealthiest. Just keep government at bay and let the market work its magic.

And if we do, the Cato Institute analyst assures us, “our modern, dynamic world” economy will surely bring us “opportunities to continue to alleviate poverty.” A rising tide will lift all boats. So what if the income gap widens. That widening, “absent violence,” will always be with us.

George Will, America’s prime gatekeeper to conservative orthodoxy, fully shares Bourne’s gratitude for The Great Leveler’s take on inequality’s history. His write-up on the book, published earlier this month in the conservative National Review, carries a headline that neatly sums up how the right is reading Scheidel: “The most potent ‘solutions’ for inequality are unpleasant.”

The quote marks around “solutions” subtly carry their own message: We don’t need to “solve” inequality because inequality poses no problem that should give a civilized society pause.

Will goes on to not so subtly amplify that same message in the text of his contemplation over what Sheidel has wrought. Inequality surely rates as a fact, Will contends, but inequality only rates as “a problem when, and to the extent that, a critical mass of people decide that it is.”

This claim from Will will not go down well with the legions of social scientists who’ve spent recent decades researching and revealing the many social ills that inequality creates and nurtures. Wide divides between the rich and everyone else, these researchers have shown, are ripping safety nets and degrading our environment, subverting democratic norms and eroding our economy.

Maldistributions of income and wealth, epidemiologists inform us, are even limiting how long we live. And what about violence? Some 40 studies link inequality and homicides, the ultimate in violent acts. The wider a society’s inequality, the higher the murder rate.

Yes, inequality does rate as a problem, a reality that you don’t have to be a social scientist to recognize. Every great religious tradition in the world frowns on maldistributions of wealth. We put ourselves and our societies at risk, our greatest thinkers have always recognized, if we let these maldistributions fester.

But do we have no choice in the matter? Is inequality, as the most dispiriting reading of Scheidel would imply, our inevitable natural order?

In fact, we certainly do have choices. Scheidel may know the historical literature on social cataclysms. But he has less familiarity with the debates over antidotes to inequality that have coursed — and continue to course — through movements for social change.

Activists today are exploring encouraging pathways to a New Economy that sustain both our planet and greater equality. The work of veteran activist scholar Gar Alperovitz stands as just one heartening example.

Walter Scheidel asks us to “think harder about how to bring change in today’s world.” In truth, we already are.

Sam Pizzigati is an associate fellow at the Institute for Policy Studies.

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Inequality Was Responsible for the Depth of the Great Recession

Wealth Distribution

(Photo: Takkun / Shutterstock)

Another new study on the devastating impact of the Great Recession — on the middle class — has just come out from the Hudson Institute, a conservative-leaning think tank.

America’s richest 10 percent, this latest analysis shows, lost 7 percent of their wealth between 2007 and 2013. The bottom 90 percent lost 22 percent, over triple the top 10 percent loss.

The Great Recession essentially wiped out virtually every cent of the new wealth middle class households had added between 1983 and 2007.

In the earlier of these two years, the typical American household held, after adjusting for inflation, a modest net worth of $ 80,200. By 2007, this net worth had grown to just under $ 136,000. The Great Recession knocked that total back down to $ 81,400.

Middle-class household income follows this same basic pattern. Typical families, after adjusting for inflation, took home $ 48,000 in 1983, then only about $ 46,000 in 2013.

By any yardstick, the Great Recession dealt households in America’s economic middle a devastating blow. The United States has emerged from it, notes the new Hudson Institute study, “noticeably more unequal,” with the nation’s top 10 percent now holding three-quarters of the nation’s wealth.

What made the Great Recession so dreadfully “great”? To start getting at the answer, suggests other recent research, we first have to acknowledge how remarkably unequal America had become just before the Great Recession.

The authors of this other new research — economists Kurt Mitman of Stockholm University, Dirk Krueger of the University of Pennsylvania, and  Fabrizio Perri of the University of Minnesota — have all immersed themselves in that pre-Great Recession inequality. They’ve crunched the data from a national University of Michigan survey of 5,000 American families that’s been ongoing ever since 1968.

This survey’s figures show that American household inequality had, by the eve of the Great Recession, hit a “postwar high.” In 2006, the upper 20 percent of U.S. households held a little under 83 percent of the nation’s wealth. The nation’s poorest 40 percent, all combined, held “no net worth at all.”

And households in America’s middle class? Households in the nation’s middle 20 percent owned just 4.4 percent of the nation’s wealth.

Economists Mitman, Krueger, and Perri hold this deep inequality directly responsible for the crushing depth of the Great Recession. Inequality, their research concludes, “has a significant impact on business cycle fluctuations.” Inequality makes cycles fluctuating downward — recessions — worse. Much worse.

Americans have witnessed 11 recessions since 1945. Most of them came and went quickly, leaving behind no lasting damage. Most of these  economic downturns also came at a time when the United States more equally distributed the nation’s wealth.

Why should the distribution of wealth make any difference on the severity of an economic downturn? Mitman, Krueger, and Perri have an explanation.

In 2006, they point out, the nation’s bottom 40 percent of households may have held no net worth. But the households in this bottom 40 percent did, of course, have income. With this income, they consumed a significant share — close to 25 percent — of the nation’s goods and services.

The low-wealth households of the middle 20 percent consumed another sizeable chunk. Together, the households in the nation’s bottom 60 percent in 2006 accounted for just over 40 percent of the nation’s consumption.

But then the economy experienced a “macro shock.” Unemployment rose precipitously and households started cutting back on their consumption. Nothing particularly unusual there. Households almost always cut back on consumption when an economic downturn hits.

The difference this time? The extent of the cutback.

The deeply unequal America of 2006 had a greater proportion of low-wealth households than the America of earlier postwar decades — and that contrast turns out to really matter.

In an economy with wealth more equally distributed, most households will be able “self-insure” against the calamity of unemployment. They will have enough saved up to weather the loss of a job and income without having to cut back drastically on their consumption.

But in an unequal economy, with so many families with so little in wealth, many households will “have a lesser ability to self-insure.” In this economy, note Mitman, Krueger, and Perri, low-wealth households will start to cut back significantly on their personal consumption once unemployment rates start rising, even if their own family income “has not dropped yet.”

And that’s what happened during the Great Recession. With so many households spending significantly less, the recession that began in 2008 soon became the Great Recession, the worst economic downturn in the United States since the Great Depression of the 1930s.

In other words, as our three economists formally put it, “an economy with a large fraction of low-wealth households will experience a sharper reduction in aggregate consumption expenditures in response to a given macroeconomic shock.”

This trio of researchers can back up that conclusion with a wealth of complex analysis. But we can keep things simple. America’s two worst economic catastrophes of the last century — the Great Depression and the Great Recession — came right after America’s wealth had significantly and ferociously concentrated at the nation’s economic summit.

The post Inequality Was Responsible for the Depth of the Great Recession appeared first on Institute for Policy Studies.

Sam Pizzigati is an associate fellow at the Institute for Policy Studies.

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Even Red State Voters Want Action on Inequality

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(Photo: Glynnis Jones / Shutterstock.com)

On the campaign trail, Donald Trump once described our country’s stratospheric CEO pay as “a total and complete joke.” He was right about that. The idea that the guys in the corner office are worth hundreds of times more than their employees does not pass the laugh test.

He was also right when he pointed his finger at cronies on corporate boards as a big part of the problem. “The CEO puts in all his friends,” Trump said. “And they get whatever they want you know because their friends love sitting on the board. That’s the system that we have and it’s a shame and it’s disgraceful.”

But where the president-elect is off base is in his suggestion that we can’t do anything about this disgrace. In reality, there are many ways policymakers could take responsible action to rein in executive excess. And huge numbers of Trump’s own voters want them to do so.

Shortly before the election, Lake Research Partners surveyed likely voters in four states that all wound up in Trump’s column (Florida, Pennsylvania, Missouri and Ohio) and found strong support for specific policy reforms aimed at cracking down on excessive executive pay and Wall Street greed.

Read the rest at U.S. News and World Report.

The post Even Red State Voters Want Action on Inequality appeared first on Institute for Policy Studies.

CEO pay expert Sarah Anderson directs the Global Economy project at the Institute for Policy Studies.

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