By BRYAN GRAY
Others point to a different crisis. A family member believes the biggest problem is America’s “war mentality” trying to police the world. A friend sees unemployment as the central concern. I’ve heard businessmen tell me the most pressing problem is the lack of technological skills shown by the current crop of young job seekers. Talk radio is full of men and women whimpering about America’s “moral collapse” starting with “banning school prayer,” leading to movie obscenity, gay marriage, and Miley Cyrus.
I disagree. I view America’s biggest threat as the rising gap between the richest Americans and the rest of us. Figures released last week by the Internal Revenue Service highlighted my concern.
According to the release, the richest 1 percent of Americans now earn nearly 20 percent of the country’s total household income, and the top 10 percent captured more than 48 percent of the total earnings in 2012.
More importantly, the gulf is getting worse. Last year, the incomes of the top 1 percent rose nearly 20 percent The rest of us – 99 percent of Americans – saw incomes rise by a measly 1 percent. In fact, the gap between the richest and the rest of America is now at its widest since the Roaring ‘20s.
Why is this worrisome? It depicts the decline of a thriving middle class, the very people who buy the homes and the cars and restaurant dinners. You don’t need to be a Marxist to figure out that an economy can’t be strong if the average man and woman cannot afford to purchase the products at the store or business where they work. The middle class “worker bees” drive the economy, not the corporate CEOs.
I’m not arguing for socialism. I like rich people. They provide jobs and make investments. But I fight the concept of an “elite” class, which rakes in the great bulk of the country’s wealth. The recent recession hurt all Americans, especially middle-class families. But since 2009, the richest one-tenth of 1 percent of Americans – those with incomes more than $1.9 million – have reclaimed 60 percent of all gains, leaving little for the rest of us riff-raff.
If these were folks who have made incredible contributions to the economy, I might feel more sympathetic. But these aren’t necessarily people who have worked hard. The very rich are largely comprised of inherited wealth and paper-pushers; trading in derivatives on Wall Street is not the same as building a manufacturing plant.
As the Nobel Prize-winning economist Paul Krugman pointed out Sept. 12 in a New York Times article “Rich Man’s Recovery,” “whatever is causing the growing concentration of income at the top, the effect of that concentration is to undermine all the values that define America. Year by year, we’re diverging from our ideals. Inherited privilege is crowding out equality of opportunity; the power of money is crowding out effective democracy.”
As a country we should reward innovation and hard work. But what does it say when a school superintendent earns more than $200,000 in salary and benefits while his best teachers put in long days and earn less than $40,000? Should a Wall Street banker earn $1 million while the custodian cleaning his office earns $16,000?
Conservatives squawk about the term “sharing the wealth”. But realistically, a nation will stumble when the average Joe doesn’t earn enough to buy the products and services to keep the economy afloat.