Rich and poor: Just the facts, Ma’am
Editorial
Attempting to rebuff the more or less general scientific agreement that global warming, a potentially disastrous ecological phenomenon, was in fact a reality, a Republican senator recently quipped that “Everybody’s entitled to their statistics.” It never ceases to amaze this editorial staff just how far some people will go to distort the facts – even if only in their own minds – to protect their pet beliefs of how the world is supposed to work.A striking example of this appears today on this very page.It’s a bizarre – and well documented – aberration of American’s social consciences that nearly everyone in this country believes that they are middle-class. And although the perception of what constitutes middle-class status in the United States has stretched to encompass an enormous range of people, there is little evidence to support the notion that actual income levels reflect this perception. Instead, an increased stratification between the rich and poor has emerged to take its place.According to U.S. Census Bureau statistics, in the decade 1984-1994 the average household income, when adjusted for inflation, rose by less than 1 percent. The average income for the poorest one-fifth of households in the U.S. increased by only 0.1 percent, while the top one-fifth of households enjoyed an increase of over 20 percent in their average income.Additionally, although the absolute number of households with what could be characterized as moderate incomes have increased since 1970, the proportion of those with moderate incomes is declining.If one takes a broad definition of what constitutes a middle-class income – all households with incomes between $15,000 to $75,000 – the middle-class made up 64 percent of all households in 1994, down from 70 percent in 1970. At the same time, the number of households grew from 25 million in 1970, to about 30 million in 1994.The question becomes, of course, just what does this data reflect? Are those leaving the middle-class moving into higher income brackets? Or are they falling below middle-class status?Like most things, it depends on who you ask. But what is clear is that since 1984 the only households which have seen a significant increase in their income are those which constitute the highest income households.Additionally, according to Federal Reserve Bank figures, the richest 20 percent of Americans owned more than four-fifths of the country’s wealth, while the top 1 percent held nearly 40 percent of all American assets. This is reflected in U.S. Census Bureau data that reveals that during the same year, 5 percent of households held over 21 percent of the nation’s income.We believe this is cause for alarm.This increased economic disparity is clearly reflected by at least one economic measure, the Gini coefficient. Developed by Italian demographer Corrodo Gini, the coefficient reflects the overall distribution of income over an entire country. If the Gini coefficient is 0, there is a perfect distribution of income, while a coefficient of 1 means that all income goes to a single person. Thus, whenever the Gini coefficient rises, income distribution has become less equal. The Gini coefficient for the United States has risen from .394 in 1970 to .456 in 1994 and is the highest of any industrialized nation in the world.If this inequality exists, and if that inequality is steadily increasing, the immediate question becomes, why?Well, there’s a number of explanations. When Fortune 500 companies began abandoning the postwar social contract and looking strictly at the bottom line, many workers’ fates were sealed. One may also point to the decline in well-paying manufacturing jobs in the United States, or cite the alarming stagnation of wages which began in 1970. The point is, that like global warming, not everyone agrees on causes, but only a fool would deny that something potentially destructive is occurring. Ultimately, the belief that a rising tide raises all ships is doomed to takes its place as just another myth of the American consciousness.
