Wednesday, 3 September 2014

7 Shocking Facts about Economic Inequality in the USA.


VIDEO: https://www.youtube.com/watch?v=a4QkvGJgDoc



The GDP growth rate in the United States of America has averaged 3.27% between 1947-2014- such a growth rate is a sign of a healthy, thriving economy. And certainly the USA's economy has thrived, but have its citizens enjoyed their fair share of the pie?
It appears not; wealth inequality has become one of the major problems in the US; numerous presidents have come and go promising reform on the matter, but little effective change has been made. 
Here are some shocking facts about just how bad the problem of economic inequality is in the USA right now.


1. CEO PAY (Business Insider)

Between 1990 and 2005, CEO pay had tripled- meanwhile the minimum wage dropped, and the pay of the average production worker increased just 4%.  
CEOs in 1965 made 24 times more than the average production worker; whereas in 2009 they made 185 times more.








2. THE USA IS THE MOST UNEQUAL ADVANCED ECONOMY... IN THE WORLD (Credit Suisse Global Wealth Databook)

The USA's GINI coefficient (the most widely accepted mathematical calculation of economic inequality) is the highest of all developed economies- at 85.1%, this high GINI scores confirms America's place as the most economically unequal developed country in the world. To compare, the UK scored a modest 67.7%, China 69.5% and India 81.1%. 


3. "THE POOR STAY POOR, THE RICH GET RICHER" (Emmanuel Saez., Berkeley)

In 1982, the top 1% families in terms of salary were earning 10.8% of all income in the USA (pre-tax)- the bottom 90% received 64.7%. 
However, in 2012 the top 1% received 22.5% of pre-tax income- while the share of the bottom 90% dropped to just 49.6%.

Berkeley economist Emmanuel Saez also estimates that between 2009 and 2012, the time of America's 'economic recovery', the top 1 percent captured 95 percent of total income growth.

4. CLOSE, BUT NO BISCUIT (MOTHER JONES) 

This drop in share of wages experienced by the bottom 90% comes despite the fact that productivity has drastically increased in recent decades- though this is also attributed to developments in work methods, technology- Americans are more productive today than ever- yet overall wages have overall stagnated. 
This graph shows quite clearly who has benefited from the increase in productivity.
Had median household incomes kept up with the growth of the economy since 1970, they would be around $92,000. The current median wage being $50,000 is quite a clear indication that something is out of balance.

5. DEEP IN DEBT (Domhoff, UCSC)

Meanwhile the bottom 90% enjoy responsibility of 72.5% of the US' debt, as opposed to the paltry 5.9% held by the top 1%.







6. HOMELESS AMERICA (Western Regional Advocacy Programme)

An estimated 22,000 children live homeless on the streets of New York City alone; the largest such number since the time of the Great Depression. But these children represent just a part of a nation wide problem, with roughly 1.2 million children being reported homeless in March 2014.



7. THE AMERICAN NIGHTMARE? (Saez., Kopczuk., Song., Columbia University)


Despite the grand vision of the 'American Dream', the 'land of opportunity', since the 1950s probability of socio-economic mobility has been almost constantly decreasing.





Mohammad Lone Editor