It’s the Best of Times for Billionaires, The Worst for Everyone Else

wealth-divide-revolution

(Hans Splinter / Flickr)

Charles Dickens opened A Tale of Two Cities, perhaps his most famous tome, with the now iconic line, “It was the best of times, it was the worst of times.”

The book is set in London and Paris during the late 1700s, the lead up to the French Revolution.

While revolution appears unlikely in the near term, we can draw some lessons from this tumultuous era to understand the growing economic divide in the United States today.

The ultra-wealthy are doing phenomenally well. The Forbes 400 own a combined $ 2.68 trillion in wealth. If you could lay all their money in dollar bills down to create a dollar-bill carpet, it would cover the entire state of Massachusetts.

This concentrated wealth at the top continues to skyrocket. Jeff Bezos, head of Amazon, saw his wealth jump by $ 10 billion in October alone, making him the richest person in the country. In other words, one person’s wealth jumped by nearly $ 4 million per second last month.

And if that kind of obscene profiteering wasn’t enough, the president is offering a gigantic handout to the already uber-wealthy in the form of his tax plan.

For Jeff and his billionaire peers, it’s the best of times.

Things aren’t so good for everyone else. The United States remains the only developed country that doesn’t guarantee health care to all its citizens. We’re among the only countries in the world with an expanding work week, meaning we spend more time toiling and less time on things like parenting, playing, or sleeping.

We’re also witnessing the rise of what Nobel Prize winning economist Angus Deaton calls “deaths of despair.” Opioid overdoses and suicides are both on the rise.

Many Americans are coming to terms with the fact that millennials are likely to be the first generation in American history who won’t do better financially than their parents. One in five families is underwater, meaning they owe as much or more than they own.

A gripping stagnation is taking many forms throughout the country, leaving millions of families unable to get ahead of their problems. Rising student debt, declining workforce participation, and a minimum wage way below the basic cost of living are all factors.

For folks at the bottom, it’s the worst of times.

There’s a couple different ways this could play out.

Stagnation for the masses could become the status quo. In this scenario, an ever increasing portion of the population toils for an ever decreasing portion of the nation’s economic resources. Wealth funnels upward.

This is essentially the scenario Dickens depicts in 18th century France. If you remember anything about this era from your history classes, you probably remember what came next — the guillotine.

Fortunately, redistributing our nation’s resources doesn’t have to be violent or even unpleasant. It looks like increasing opportunities for everyone, supported by a strong social safety net. It’s funded by those who’ve benefited the most from the nation’s basic economic, political, and social structure contributing their resources and their support to this effort.

There’s no natural order dividing the ultra-wealthy from a nation of strivers. These conditions have been socially created by a system of rules and norms. Changing these norms won’t be easy, but they will change one way or another.

I, for one, hope we choose the compassionate route and save ourselves the bloodshed.

The post It’s the Best of Times for Billionaires, The Worst for Everyone Else appeared first on Institute for Policy Studies.

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CEOs Now Make 300 Times More Than Their Workers. This City Is Putting a Stop to That.

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(Photo: Flickr/ Democracy Chronicles)

With national policy likely to compound the income and wealth gap in the coming years, states and localities are fighting back.

Across the country, local jurisdictions aren’t waiting for federal action or corporate governance reforms to close the wage gap. In December, for example, the city of Portland, Oregon, passed an ordinance to raise the business tax on companies with CEOs who earn more than 100 times the median pay of their workers. Portland officials said the ordinance is the first of its kind in the country. And now, more cities and states are poised to follow suit.

“The huge divide in income and wealth has real-world implications,” Steve Novick wrote last October in Inequality.org. Novick sponsored the ordinance when he was on the Portland City Council. “Too many Americans cannot get a leg up,” he wrote. “Income inequality undermines the American dream.”

Portland city government projects the tax will raise $ 2.5 million to $ 3.5 million a year, which city officials have said will likely help pay for the city’s homeless programs.

Inspired by the living wage movement, Portland’s ordinance comes on the heels of decades of grassroots activism around the issue of wage inequality.

Starting in the 1990s, the failure of Congress to adequately raise the federal minimum wage gave rise to a prairie-fire movement of local activists pressing for local and state living wage ordinances. Living wage ordinances typically cover a segment of workers, such as employees of government contractors, while minimum wage laws cover all workers. By 2010, over 120 jurisdictions had passed local living wage laws, and at present, 41 jurisdictions have passed minimum wage laws.

“I expect this pay gap reform movement to spread like wildfire, just as the living wage movement did,” said Sarah Anderson from the Institute for Policy Studies. “I’ve gotten inquiries from over two dozen states and cities about how to establish a pay gap ordinance.”

Anderson lobbied the Portland City Council in support of the policy and testified at a public hearing. She has since compiled resources for communities interested in instituting a CEO-worker pay gap penalty.

Read the full article on YES! Magazine’s website. 

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