Observation:
I am a little bit later this month, as I have been relatively busy at work.
I have recently read study how top 1% Americans have taken $50 trillion from the bottom 90% and how it made the U.S. less secure country. This didn’t happen overnight and slowly from year 1975 onwards. If income distribution would remain pre-1974 levels each working American would have $1,144 a month more. Every single month.
On top of it low-income people suffer from higher rates of asthma, hypertension, diabetes and far more likely to work in “essential” industries during COVID-19 pandemic. Those industries were with the highest rates of coronavirus exposure and transmission.
Of course, the USA and Western Europe’s chronic case of extreme inequality is old news. It hasn’t always been the case. As from 1947 through 1974 real income grew close to the rate of per capita economic growth across all income levels. This was when U.S. built the world’s largest middle class. After that top 1% disproportionately took the income away from the bottom 90%, as the majority of the full-time workers did not share in the economic growth of the last forty years.
In 1985 average worker needed 30 weeks of income to pay for housing, healthcare, transportation and education for his family. In 2018 this went to 53 weeks (more weeks than in an actual year). Another comparison is that in 2018 the combined income of married households with two full-time workers was barely more than what the income of a single earner would have earned had inequality in 1974 stayed constant. In nowadays two income families are now working twice the hours to maintain a shrinking share of the pie, while struggling to pay housing, healthcare, education, childcare and transportation cost that have grown at two to three times the rate of inflation.
The house that we bought was built by a single working man (as an electronics engineer) in 1971. He had a wife at home and raised three kids. In 2024 my works at the same facility, has a PhD degree (entry level requirement) and her salary is enough to cover mortgage only (without house taxes, bills, etc..)….
American workers have never been more highly educated. Its impossible to argue that a “skill gap” is responsible for rising income inequality when the rate of educational attainment is rising faster that the rate of growth in productivity or per capita GDP.
Todays U.S. is a country in which 28 million citizens have no health insurance, and in which 44 million under-insured – can afford the deductibles or copay to use the insurance they have. U.S. recklessly rushed to re-open its economy in middle of the global deadly pandemic as the business where too fragile to survive an extended closure and workers too powerless and impoverished to defy the call back to work.
The redistribution of wealth was a choice. A choice through cutting taxes on billionaires, deregulation of financial industry, allowing CEO’s to manipulate share prices through stock buybacks and lavishly reward themselves with the proceeds. We chose to erode the minimum wage and the overtime threshold.
However, I strongly believe that inequality gap will continue to raise sharply in the years to come. I have been personally lucky to accumulate a little bit of money through saving some of my wages and investing them. I have made some foolish and ineffective investment choices but still have something for a raining day. Under Trump administration the Wall Street is already salivating for the gains and taking a bigger share of pie from the bottom 90% percent.
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