Monday, September 13, 2010

Plutocracy, the Wealth Gap, and Income Inequality



I refer to the wealth gap numerous times throughout the blog, so I thought it would benefit readers to actually see statistical evidence that shows that there is indeed a very significant wealth gap and income inequality that has led to a plutocracy in the Philippines, the US, and many other countries throughout the world.


The statistical evidence that follows is data for the US, where corruption and the wealth gap is not as apparent.  So, what more for the Philippines, where there is a clear and definite contrast between the two extremes -- the impoverished masses and the plutocracy (the few but wealthy, and hence powerful, elite).

The rich are getting richer and the poor are getting poorer.  Cliché, sure, but it's also more true than at any time since the Gilded Age.  The poor are getting poorer, wages are falling behind inflation, and social mobility is at an all-time low (as of 2010).




The Distribution of Wealth in America






There is very little data about the distribution of wealth in America. There is one source, the Survey of Consumer Finances, sponsored by the Federal Reserve Board, that does provide data from 1983.

These data suggest that wealth is concentrated in the hands of a small number of families. The wealthiest 1 percent of families owns roughly 34.3% of the nation's net worth, the top 10% of families owns over 71%, and the bottom 40% of the population owns way less than 1%.


Changes in the Concentration of Wealth

As with the case of income, the evidence suggests an increase in inequality over time.

The Distribution of Wealth and Income
The distribution of wealth is much more unequal than the distribution of income, especially when focussing on the bottom 60% of all households. The bottom 60% of households possess only 4% of the nation's wealth while it earns 26.8% of all income.

The gap between the top 1% and everyone else hasn't been this bad since the Roaring Twenties



This chart shows average income of the top 1% as a multiple of average income of the bottom 90% (via The Nation).

Half of America has 2.5% of the wealth




Half of America has 2.5% of the wealth
Source: Institute for Policy Studies


Half of America has only 0.5% of America's stocks and bonds



Half of America has only 0.5% of America's stocks and bonds
Source: Institute for Policy Studies
Look at the wealth gap grow!



Look at the wealth gap grow!
Source: Professor G. William Domhoff

The last two decades were great...if you were a CEO or owner. Not if you were anyone else.


The last two decades were great...if you were a CEO or owner.  Not if you were anyone else.



Real average earnings have not increased in 50 years


Real average earnings have not increased in 50 years


And savings rates are sinking



And savings rates are sinking

Despite the myth of social mobility, poor Americans have a 

SLIM CHANCE of rising to the upper middle class


Despite the myth of social mobility, poor Americans have a SLIM CHANCE of rising to the upper middle class





















Source: NBER

Republican tax cuts have significantly increased the wealth gap
Republican tax cuts have significantly increased the gap


Source: NYT

Meanwhile, income tax is getting lower and lower for the rich



Meanwhile, income tax is getting lower and lower for the rich
America spreads its wealth FAR LESS than other developed countries



America spreads its wealth FAR LESS than other developed countries
America's income spread is nearly twice the OECD average




America's income spread is nearly twice the OECD average






























Source: Economist

The income gap is NOT growing in other countries, 

like France




The income gap is NOT growing in other countries, like France

Inequality is worst around Wall Street and Oil Land


Inequality is worst around Wall Street and Oil Land





































Source: The Map Scroll

If you aren't in the top 1%, then you're getting a 

bum deal.

Normalized to 1979, the top 1% have seen their 

share of America's income more than double. 

The bottom 90% have seen their portion shrink.



[Slide4.JPG]
Source: Afferent Input

1 comment:

Anonymous said...

the Philippines as much as I love it, it has its evil side. Elitism has been a part of the society since the spanish times. I guess we got this filipino trait from them (the spaniards). As much as I love the Philippines but the society is such that I do have reservation if I am going to retire in the country

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