America's Widening Wealth Gap
http://thedianerehmshow.org/shows/2011-07-28/americas-widening-wealth-gap
America is facing its largest wealth disparity in a generation, and it’s pushing minorities to the economic margins. That’s the finding of a new study by the Pew Research Center. The median wealth of whites is now 20 times that of black households and 18 times that of Hispanic households. And though the recession cut across all races and ethnicities, Hispanics were especially hard hit. Hispanic families accounted for the largest single decline in wealth in the last few years. And when you add skyrocketing pay for CEOs, and increasing assets for those at the very top income brackets, you’ve got a record high divide between the rich and the poor. A look at what’s behind our country’s growing wealth gap.
Guests
Paul Taylor
executive vice president, Pew Research Center.
Gary Burtless
senior fellow, economic studies at The Brookings Institution.
Roderick Harrison
professor of sociology at Howard University, senior research fellow at the Joint Center for Political and Economic Studies.
Comments
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Please include in this discussion how the role out of wedlock births and the exploding number of single parent households figure into these wealth gap figures. Single parent households, black 70%, hispanic 50%, white 30%.
The effect of government welfare subsidies that in reality destroy the work ethic of minority groups. Also the cultural disrespect of education.
Lastly, from what I have read those living in poverty now by historical standards have many of what used to be considered luxury items in their possession, big screen TVs, air conditioning and telecommunication devices. Being poor in 2011 is certainly not the same as it was even 30 years ago.
Monte is unfortunately missing the point. It is true that social problems such as single parent households reduce the overall wealth of the society. But the urgent issue at the moment is not that. Rather it is the explosion of ultra-high incomes which came about as a result of the great capital expansion of the 1980's, accompanied by the stagnation of middle class incomes since the 1970's. More capital has led to a ballooning of valuations and capital transactions. Since pay is often tied to financial results, the earnings of those in the capital sectors have exploded. Particularly egregious is the practice of paying senior executives, who are in reality only high ranking employees of the share holders, immense sums which are out of all relevance to the actual value they create. Young people are drawn by the siren call of high earnings and are forgetting how to make things. Paul Volker has called this "financial engineering" and describes it as the worst economic problem facing our country today. This trend has gone forward whichever party is in power and, as the NY Times reported yesterday, continues whether the economy is flourishing or not. This entitled and usually egotistic group of people have upset the social balance which has always been so important to the United States. Add to that the near disappearance of the skilled worker class and you have a dangerous erosion of the very foundations of society. No society which has impoverished its people and neglected its core values has thrived over a long period. The self-serving attitudes of our rich are helping push us downwards. This is the issue which I hope you will discuss today. thank you
Susan will join Diane in ignoring the population numbers and their effect overall, here and around the world. Immigrants, legal, and illegal, and refugees in great numbers are favored by corporate employers. Competing for jobs keep wages and benefits low, a prime corporate interest, including NPR interest.
Depleting resources needed for life will be ignored. Scarcity will increase costs. Environmental effects will be ignored along with the increased cost needed for health care.
Abortion and homosexuality! Hey! there's the problem.
Monte, thanks for your comment. You are open, even though you ignore the have- nots. Perhaps you favor the mercy of a cyanide pill.
Although b23erlin comments are accurate, however, one must ask themselves why the supposedly rich are getting richer. There are many reasons why some individuals accumulate wealth beyond what the main stream media advocates. Since I don't want write a small story as to why this is so, I'll focus on MY theory as to why some individuals accumulate wealth, while others are on a perpetual spending treadmill.
A vast majority of the middle class and some of the poor choose to live their lives as consumers first and as wealth accumulators second. FYI... attacking this fact will not change its reality. Nevertheless, if these population segments will flip these wealth destructive personality traits, financial success, freedom, flexibility, and independence will follow.
Trust me; it works because I've always practiced this philosophy. This philosophy requires patience, perseverance and discipline to work, which is in short supply for most Americans.
We are now living in the best of all worlds. High gas prices and low wages mean lot of the riff-raff are kept off the roads -more room for those that matter. Servants are cheap. We need to subsidize more corporations . These people that have no jobs- are there no work houses? are there no prisons? The top deserve it all- that’s all there is to it. The rest of the population- make sure they have a lot of access to lots of guns. And lets see what happens. Just stay away from my gated community, my off-shore tax shelters and my private island, please. Can’t find a job - decrease the surface population and leave a little more for rest of us. That’s what’s life’s all about.
30 years of decreasing wages for majority, funneling $ to the Haliburton’s, financial institutions, corporate media, oil companies, etc. of the world; unfunded wars and look where it has lead us. Ain’t it pretty?
Let’s see if we can get tax rates for the wealthy down to the 25% and income inequality as it was just before the Depression- I reckon that’s about right.
Of course argument from right is that any body who believes raising taxes on those that have trillions on the sidelines is a bunch of comi socialists. Since early 20th century wealthiest have been asked to pay on average over 60% tax rate. Apparrently then during all those years of fiscal sanity we were all abunch of pinko comi socialists. The “greatest generation” were the worst comis of the bunch because at that time rate was 90% plus. We need to make sure our history books are changed to reflect this GOP insight.
And of course the “can’t tax those paying over 250 G” argument is completely bogus. Why?
For one, under that plan, those making up to 1/2 mil would not be taxed more than an extra $400. This is going to effect ability to hire??
How many extra folks are you going to put on payroll with that $400? Are you going to pay 4 people 25Cents a day or something?
I know it's hard for GOP Borrow and Spender to understand, and I don't expect they ever will, but you can't pay down debt without $.
Tax rates on the wealthy are pretty close to historical low. And that's not even including off-shore tax havens, myriad of tax loopholes, etc.
The actual job creators are small business and new startups. Unfortunately for past 30 + years since “trickle up” began, these types of businesses have been on steady decline.
Good grief. Another class warfare show.
Blame whitey. Blame the rich. Blame Bush. Blah, blah, blah........ Same old tired rhetoric, tell people they are victims of some unseen force. Tell people they are oppressed, and their standard of living is not their fault. If someone has more than you - they obviously don't deserve it, and should be required to give whatever arbitrary "excess" they have to you. Because it's "fair".
My god people are so naive.
BTW, check the projected tax tables for 2011, it's not just the rich that are going to get soaked. EVERYONE is going to be paying more - so how's that "Hope 'n' Change" working out for ya?
Wealth and poverty are more self-magnifying in this form of capitalism than most seem to recognize.
Where does the "rugged capitalist" think their children will stand, if not themselves, as society stratifies and we face increasing global resource issues? Welcome to neo-feudalism. If they're lucky, their lord will think they work better and be more loyal when they're fed and rested.
Marvin: Perhaps he does favor the mercy of a cyanide pill but at any rate, has missed the point.
Such vision of humanity! William Gibson's future wouldn't seem so far off. But I think natural selection won't favor a handful of Plutocrats and their lackeys if it favors anyone.
Z_Harris: To your last point: Some Change has been marginal; it hardly has to be said why.
All of these situation is directly related to financial education of the different groups, Do you guy know what's going to happen to all these bankers that mislead all these minorities into buying home that they could not afford?
The minorities paid for it, but what will happen to the predators(loan and mortgage company? Do they get to keep the money or they will pay for it?
And how come Financial Education is not obligatory in schools, just like math?
Can anyone address the role of the racial IQ gap as described in Charles Murray's "The Bell Curve"? I am black, but I feel as if avoiding discussion over the racial IQ gap is not constructive in resolving several critical issues like the racial wealth gap.
I have the solution! Let's just round up everyone making more than median income, confiscate their extra income, and write every African American, Hispanic, and any other "minority" a check for a million dollars!
Problem solved. Where's my Nobel peace prize?
BTW, the "Bush" tax cuts were cuts for EVERY taxpayer, not just the "wealthiest 1%".
Ignorance is our most expensive commodity, as evidenced by most of these comments.
Please comment on how much behavior and cultural factors contribute to these changes such as decreasing family size, immigration and especially the very high black illegitimacy rate.... By contrast, getting married and waiting to have children seems to me to be one of the best ways to accumulate wealth that has been given up on my many in our society and may be an underlying cause of your statistics.
eric.
Is this at all an after-effect of post-war wealth? The (very white) generation that made a lot of money after WWII is beginning to die, leaving their wealth to their kids and grandkids?
Isn't comparing wealth or income averages across such large and disparate groups (such as all whites/all blacks/all Hispanics), a crude approach to understanding the growing wealth and income gap in the U.S.? Aren't there about 3 times more poor whites than poor blacks? It seems low income whites often get neglected in these race/ethnicity-based discussions. All low-income folks of all races are losing, and all upper-income folks of all races are gaining. It's rather arbitrary to group Asian Indian professionals and Hmong refugees, just because they're both from Asia, and then average their incomes for comparison purposes. Same issue applies if you're using median income rather than average income.
Frankly, this has everything to do with the education gap (with some racism included, of course). And when we are talking about the education gap, we would be foolish not to mention the racial IQ gap. Its the reason why affirmative action and No Child Left Behind have produced sub-optimal results...
Its a hard thing to talk about. Believe me, I know! But we, especially as part of the black community, need to talk about it!
I believe the widening wealth gap is vindication for George Bush senor when he called 'supply side economics' VooDoo economics. The idea that wealth would trickle down was and is absurd. Supply does not fuel an economy, demand does. Supply without demand is inventory. If you have demand you will always have supply. Instead of taxing wealth at the top and reinvesting it in such things as infrastructure and general research in this country, that extra money created jobs in other countries where they could make more money. As the middle class had less to spend we started making it easier to fuel on credit, first with credit cards and then with our homes.
your all rambling on and on and on. its part racism. blacks are former slaves that came here with nothing and were released from free slave labor with nothing. hispanics came here with nothing over what seems like the last 10 years or so. (lol). either way neither blacks nor hispanics had anything to begin with. now we are in a deep recession so sure the stats are going to look like they look.
Please talk about impact of age distribution when talking about racial distribution of wealth. I'm under the impression that the average age of browns/blacks is considerably lower whites. If true, since wealth accumulation tends to occur later in one's life; it seems that the color analysis may be less meaningful. I also appreciated the caller's comments on education and family structure. In general, the study seems insufficiently robust and the authors' conclusions premature.
I have to wonder if having a paid for house is much of an asset these days. With the non stop growth of bloated local governments and of course union controlled public schools, the home owner is seen as a money trough for the incompetent and greedy. I often wonder if I own anything, in reality through property tax I am paying rent, if I cannot pay they (the government) will throw me out.
Doesn't the lack of 'wealth acquisition' for our minorities state that the elementary education system is lacking value? Shouldn't we be teaching our children what 'saving' means before we ask them why don't you have any wealth?
I'd like to see you address the lack of financial education, beginning in the elementary school. While there are many factors that contribute to this disparity, I too often see low income folks, of all races, not managing their money well. Cable TV, giving away a small inheritance to their church, eating out, buying too much meat/soda/you name it.
When children are better educated they will grow to be wiser managers of their assets. The present economics classes in our schools focuses on buying stocks, not on household finances. While this is a small part of the problem, it can make a difference.
They did not talk about education. PERIOD. give me a break, Drshow...still luv ya, though...
It is hard for me to believe that we continue to discuss issues of economics without considering the fact that there are far more people on this earth and in this country than there were earlier, and far fewer resources to take care of them. Last year we used 1.5 times the annual capacity of the earth to provide for us. In so doing, of course, we reduced the resilience and sustainability of the ecosystem. We are not living in a universe that operates according to what people want. Time to factor in the reality of what is available.
wow. lol. that interview just kept getting worse and worse. lol. what they are discussing is an equality issue. if there werent racist employment practices that were existing then no matter what shape the economy is in you wouldnt see results that are so skewed. blacks dont have the same opportunities to work the type of jobs that can drive and develop that type of wealth. and by the way the wealth gap has been widening for some time now. also the fact that we are in a deep recession means alot of people of color are getting seperated from companies alot quicker than whites. it is what it is.
To what extent do varying inheritance patterns impact the wealth disparity between native-born white Americans and black Americans and immigrants? I would guess that many young black and immigrant families are "starting from scratch" when they buy their first homes, having to use a significant amount of their own income to make an initial foray into the housing market, while a significant number of whites might be able to partially defray the cost of that initial investment with some money inherited from parents and grandparents.
No ifs, ands or buts - that minorities are losing status compared with whites is a symptom of the much wider class war that's been going on for 3 decades which the rich are winning hands down.
I listen to the Diane's show all the time.
This show was very frustrating. Most Americans know all of this, we live it everyday. We always state the problems, but never the solutions. What is the sense in airing the problems?
How can our problems be solved? What can the people in the US do ? This gap is widening and many Americans are suffering from lack of funds now the Tea party is threatening what little many of us have and the help we are receiving from
the government. We have all paid into Social Security and Medicare and through the years we paid taxes, why should this be considered an expense for the Government? Entitlement programs should never be considered when cutting expenses.
Thank you,
Armanda Desiato
I don't understand how the median income of white families can be 20 times that of Hispanics. That means that if the median income of Hispanics is $10K a year, whites would be making $200K. I can't believe either of those numbers. $10K is too low but if it's higher than that, then the median income for whites is even more ridiculously high. Is this really true? What are the actual numbers?
I believe these kinds of reports have the unintended consequence of influencing public policy away from addressing wealth and income disparities. Many voting middle class and lower class Whites hear these reports and feel a stronger association with the wealthy, and less of the realistic association with their social economic class. Hence, their political beliefs and votes often conflict with their own economic interest.
If these reports had less emphasis on ethnic group and more emphasis on social economic class, those of us influenced by the reports will see the divides as an issue of class not race. Our ensuing public policies would have less impact on increasing disparities between ethnic groups.