The Growing Divide Inequality & the Roots of Economic Insecurity - PowerPoint PPT Presentation

The Growing Divide Inequality & the Roots of Economic Insecurity March 2014 One Milk St., 5th Floor, Boston, MA 02109 • www.faireconomy.org • info@faireconomy.org • 617-423-2148

The Nation at a Crossroads H Growing Insecurity H Greater Burdens Layofgs & job instability Stagnant wages Longer work hours Insecure retirement Loss of family time Roller-coaster stock market Rising costs of housing, health care, education, utilities, and food H Stress, Isolation & Scapegoating Environmental hazards Endless war Anger at immigrants Growing prison population Fear of crime 2 One Milk Street, Boston, MA 02109 • www.faireconomy.org • info@faireconomy.org • 617-423-2148

The Trends since 1980 H The Bad News High unemployment persists. H The Good News Growth in income has gone to the top Infmation is moderate 1%; the gap between highest and lowest Interest rates on loans are low paid workers has widened. Real wages have dropped since 2009. Wealth gap has widened and the racial wealth gap is growing. Poor families not lifued out of poverty. For a few, the U.S. economy has done very well. But the rising tide lifted only a few boats and most of us are struggling to stay afmoat. 3 One Milk Street, Boston, MA 02109 • www.faireconomy.org • info@faireconomy.org • 617-423-2148

Real Family Income Growth by Quintile & for T op 5% & T op 1%, 1979 - 2009 +169% We Grew Apart 80% +73% 70% 60% +49% 50% 40% 30% +23% 20% +11% +4% 10% – 7% 0% Up to $26,934 - $73,338 - $112,540 $200,000 $1.2 M $47,914 - $26,934 $47,914 $112,540 and up and up and up $73,338 Bottom 20% Second 20% Fourth 20% Top 20% Top 5% Top 1% Middle 20% Source: US Census Bureau, Historical Income Tables, Tables F-1, F-3 <http://www.census.gov/hhes/www/income/data/historical/families/index.html>. Data for the T op 1% from Emmanuel Saez. <http://elsa.berkeley.edu/~saez/> is for 2008 and excludes income from capital gains. 4 One Milk Street, Boston, MA 02109 • www.faireconomy.org • info@faireconomy.org • 617-423-2148

Real Family Income Growth from 2009 - 2012 Growing Apart Even Further since the Great Recession 44.8% 45% 40% 35% 31.4% 30% 25% 20% 15% 10% 6.0% 5% 0.4% 0% Average Bottom 99% Top 1% Top 0.1% Source: Piketty and Saez (2003), series updated to 2012 in August 2013 using IRS preliminary tax statistics for 2012. 5 One Milk Street, Boston, MA 02109 • www.faireconomy.org • info@faireconomy.org • 617-423-2148

Median Family Income by Race, 1947-2010 Racial Income Inequality Persists $65,138 $70,000 $60,000 White $50,000 Latino** $40,785 $40,910 $40,000 $39,715 $30,000 $27,807 African American* $20,000 $14,216 $10,000 1947 1969 1979 1989 1995 2000 2007 2010 Source: Analysis of Current Population Survey Annual Social and Economic Supplement Historical Income Tables (Table F-5) in The State of Working America <http://stateofworkingamerica.org/chart/swa-income-table-2-5-median-family-income/> Economic Policy Institute. All income in 2011 dollars. * Prior to 1967, data for African Americans included all “non-whites.” ** The Census Bureau uses the term “Hispanic.” We prefer “Latino.” Persons of “Latino” origin may be of any race. 6 One Milk Street, Boston, MA 02109 • www.faireconomy.org • info@faireconomy.org • 617-423-2148

Median Annual Wages for Women & Men, 1960-2008 Gender-based Income Inequality Persists $50,000 Men $45,000 $46,202 $40,000 $38,907 $35,000 $35,618 $30,000 Women $25,000 $20,000 $23,606 $15,000 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2008 Notes: Annual earnings data are for full-time, year-round workers aged 14 and older through 1979 and workers 15 and older from 1980 through 2008, and include self-employed workers. (A full-time worker works 35 hours or more per week, a year-round worker at least 50 weeks during the year.) The data series is derived from the Current Population Survey. Adjustments to 2009 dollars are computed on the basis of the Consumer Price Index (CPI-U) (U.S. Bureau of Labor Statistics. <ftp:// fts.bls.gov/pub/special.requests/cpi/cpiai.txt> retrieved January 2010). Source: Institute for Women’s Policy Research, IWPR Fact Sheet #C350, updated March 2010. 7 One Milk Street, Boston, MA 02109 • www.faireconomy.org • info@faireconomy.org • 617-423-2148

CEO Pay as a Multiple of Average Worker Pay, 1960-2012 525x 500 For large U.S. corporations. 411x 400 Note: 1960-1980 based on Business Week calculations; 354x 1990 & 2000 based on UFE & IPS calculations; 343x 2010 - 2012 from Economic Policy Institute’s State of Working America, 12th edition. 300 281x 200 180x 107x 100 79x 44x 41x 0 1960 1970 1980 1990 1995 2000 2005 2010 2011 2012 8 One Milk Street, Boston, MA 02109 • www.faireconomy.org • info@faireconomy.org • 617-423-2148

Multiplier of CEO Pay to Average Worker Pay, 2012 Tie wage gap in the U.S is out of step with the rest of the world. 354:1 350 300 Countries are ranked by size of per capita GDP , 250 largest left to right. 206:1 200 147:1 150 127:1 104:1 89:1 84:1 100 67:1 50 28:1 0 U.S. Japan Germany France U.K. Canada Spain Sweden Poland Sources: AFL-CIO Executive Pay Watch. 2012 U.S. CEO-to-worker pay ratio calculated based on AFL-CIO analysis of average CEO pay at 327 companies in the S&P 500 Index, which disclosed 2012 CEO pay data as of April 1, 2013, as provided by Salary.com. 2012 U.S. rank-and-fjle worker pay calculated from the U.S. Bureau of Labor Statistics’ Current Employment Statistics Survey—Table B-2: Average hours and earnings of production and non-supervisory employees on private non-farm payrolls. GDP rankings from the IMF. 9 One Milk Street, Boston, MA 02109 • www.faireconomy.org • info@faireconomy.org • 617-423-2148

Productivity and Median Family Income, 1947-2007 Since the mid-1970s, family income hardly grew while productivity soared! 350 300 Productivity 250 Median 200 Family Income 150 100 1947 1951 1955 1959 1963 1967 1971 1975 1979 1983 1987 1991 1995 1999 2003 2007 Source: Analysis of US Census Bureau and US Bureau of Labor Statistics in The State of Working America 2008/2009 , Figure 1G, by Lawrence Mishel, Jared Bernstein, and Heidi Shierholz, Economic Policy Institute. 10 One Milk Street, Boston, MA 02109 • www.faireconomy.org • info@faireconomy.org • 617-423-2148

Ownership of Household Wealth in the U.S., 2010 Top 1% 35.4% 64.6% Tie total net worth of the Bottom top 1% = $21.9 Trillion 99% Tie total net worth of the bottom 90% = $18.4 Trillion Source: Edward N. Wolff, New York University, 2012. 11 One Milk Street, Boston, MA 02109 • www.faireconomy.org • info@faireconomy.org • 617-423-2148

Household Median Net Worth by Race, 2010 $110,729 Net Worth is ASSETS minus DEBTS (What You OWN minus What You OWE) $69,590 $7,424 $4,995 African American Latino Asian White Source : US Census Bureau. (Dollar fjgures for Whites and African Americans exclude Latinos.) 12 One Milk Street, Boston, MA 02109 • www.faireconomy.org • info@faireconomy.org • 617-423-2148

Student Debt on the Rise Student debt has outstripped credit card debt for the fjrst time. (Billions) $1,000 $800 Credit card $600 debt $400 Student-loan debt $200 $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source : Mother Jones: College Tuition and student debt charts and graphics <http://motherjones.com/contributor/2011/09/student-debt-charts> 13 One Milk Street, Boston, MA 02109 • www.faireconomy.org • info@faireconomy.org • 617-423-2148

The Power Shift Since the 1970s On In the Rise Decline Big Campaign Popular Political Contributors Movements Corporate Lobbyists Voters Corporations Labor Unions Big Asset Owners Wage Earners CEOs Employees Wall Street Main Street 14 One Milk Street, Boston, MA 02109 • www.faireconomy.org • info@faireconomy.org • 617-423-2148

Rule Changes Since the 1970s Policy changes refmect and reinforce the power shifu. Unions: Anti-union climate weakens the power & voice of workers. Trade: Global treaties benefjt corporations, not workers or communities. Taxes: Taxes shifued from big investors and corporations to workers. Budget: Public services cut. Corporate subsidies expand. Minimum Wage: Not raised to keep up with infmation & increased cost of living. Privatization: Government outsourcing plus no-bid contracts hurts taxpayers, workers, and public safety. 15 One Milk Street, Boston, MA 02109 • www.faireconomy.org • info@faireconomy.org • 617-423-2148

The Wheel of Misfortune Power shifts to Decline corporations & in political big investors participation • Scapegoating Rule • Divided communities changes that • Individualism favor the • Escapism • Big top 1% money in politics • Longer work hours • Rising personal debt Greater economic inequality 16 One Milk Street, Boston, MA 02109 • www.faireconomy.org • info@faireconomy.org • 617-423-2148