Monday, December 09, 2019

Once again America's inequality

In 2018 on average, CEOs of S&P 500 companies earned $14.5 million in full compensations.  On the other hand, rank and file employees earned only $39,888. Yet, roughly 11.8% of the population, 38.1 million Americans, is still stuck in poverty earning at or below the current poverty line, which in 2018 was $25,465 for a family of four.  While a tiny handful of elites make an inconceivable amount of money, so many people earn at or right above subsistence level, struggling to afford basic necessities like food and shelter. 

In 2018 on average, CEOs of S&P 500 companies made 287 times more than their workers. What’s of great concern, however, is that this gap between CEO and employee compensation continues to expand.  In 1965, the CEO-to-average worker compensation ratio was 20:1.  

Since 1978, CEO compensation has grown by 940%; the average worker’s compensation, a mere 12% increase, with many salaries remaining unchanged or even decreasing.  As the top 1% of incomes continue to soar, the rest of the population’s lags far behind, creating a gap that has become larger than ever.

In America today, the 400 richest people have more wealth than the 150 million adults in  America’s bottom 60%.  Millions in the United States lack jobs, health care, basic nutrition, adequate education, and struggle living paycheck to paycheck. On the flip side, the top 1% is constantly seeking to increase their already massive fortune.

For professors Martin Gilens and Benjamin Page, it comes down to the idea that within the United States, economic elites and interest groups representing large businesses have significant influence on government policy making.  In acknowledging this, average citizens currently feel they have little to no influence on policy making, with around 75% of Americans feeling their voices are unheard.  More and more people are beginning to realize that currently, as Gilens and Page argues, “money is akin to economic votes.”  In a system that fails to check wealth and its ability to pervade all aspects of society, the wealthy are able to accumulate greater influence every year.  They are able to shape a system that strictly caters to them, their needs, and disregard the demands of the masses. 

For French economist Thomas Piketty, it is the belief that when too many people lose total faith in the current narrative that a society is vulnerable to toppling. 

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