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Aug. 2001Edition 24

[ Click here for July posting ]

Obstacles that terminated the recent
"Golden Age" of Americas middle class.

How Much More Will You tolerate?

By James Lardner
In health care, campaign finance, and public education, among other areas, increased inequality trips up reform. James Lardner is a journalist and the founder of Inequality.org. This is an updated version of a paper presented at a national conference on "Income Inequality, Socioeconomic Status, and Health: Exploring the Relationships."

A GENERATION AGO, Americans grew up with the idea that time would soften the material differences among us. In the American Revolution and the Civil War, we cast off forever those Old World hand-me-downs, royalty and slavery. In more recent memory, the great post-World War II boom lifted countless Americans into a middle class that became the envy of the world. By the late 1960s, responsible officials looked toward a day when the last pockets of poverty, as they were quaintly known, would be eliminated. R. Sargent Shriver, Director of the Office of Economic Opportunity, went as far as to pinpoint the year this lofty goal would be realized: 1976.

As it turned out, the late 1970s marked the beginning of a profound and unexpected reversal. Almost all the year-to-year income gains from then to now have gone to the highest-earning 20 percent of the population. Today, roughly as many Americans meet the official definition of poor (12.7 percent, as of 1998) as at any time since the 1970s, hardly a banner decade economically.

Even more striking are the gaps that have opened up among the non-poor. At major law firms in New York and Silicon Valley, freshly minted lawyers in their early twenties command salaries of well over $100,000 a year, while experienced factory workers or teachers (a profession whose pay has fallen 20 percent in relation to the salaries of college graduates in general) are lucky to get half that. Wealth even more than income divides us. One percent of the population holds over 35 percent of the nation's private assets, a level of concentration not seen since before the Great Depression.

In a time of rapid economic expansion, it's hard to know just how to think about such things. Rather than run the risk of undermining growth through heavy-handed efforts to bring about greater equality, most Americans (and their elected representatives) seem to be willing to let the marketplace decide who gets how much. At the same time, we look for ways to micromitigate the impact of inequality in a few particular realms of life areas where it strikes us as viscerally wrong to let money rule. Yet when we attempt to put the theory of micromitigation into practice, a puzzle arises.

No story better illustrates the problem than the saga of universal health insurance in one of the first nations to enact it. The British created their National Health Service in 1947 in the hope of modifying a pattern of steep, socioeconomically determined differences in health. More than half a century later, Great Britain is waking up to the fact that income and wealth have, in fact, come to play a larger role in foretelling a person's chances of getting sick. As the landmark Whitehall II Study of 17,000 British civil servants showed, the annual heart-attack fatality rate among clerks and messengers is four times that of administrators. (So much for the idea of executive stress as a big contributor to heart disease.) It is not just those at the bottom who are at greater risk. Even on the middle and higher rungs, the socioeconomic ladder is a health ladder. Who would have imagined that, for example, a senior assistant statistician would be twice as susceptible to heart attack as a chief statistician? A similar pattern holds for cancer and other diseases that might be assumed to choose their victims more randomly.

IN THE DEVELOPED WORLD, at least, population health appears to depend less on national or per capita income than on the way income is apportioned. Thus, Greece, where the average citizen earns about one-half as much as the average American, outdoes the United States in most indices of good health, including longevity. Costa Rica, a relatively egalitarian nation, has somehow managed to achieve an average life expectancy of 76 years despite a per capita gross national product that is barely one-tenth of the United States's.

Inequality helps to explain contrasts within as well as among nations. Using two different statistical methods, separate research teams have found a strong correlation—strong and sobering to followers of the "disease-conquering" school of medical progress—at the U.S. state and metropolitan level. Inequality and poverty, according to George Kaplan of the University of Michigan, impose a combined statistical "burden of mortality" greater than that associated with lung cancer, AIDS, diabetes, suicide, homicide, and automobile accidents put together.

Some people see these links mainly as expressions of the material or practical consequences of low economic status. For others, the psychosocial effects are critical. More unequal communities, Ichiro Kawachi and Bruce Kennedy of the Harvard School of Public Health suggest, are characterized by lower levels of trust or, to use a term coined by the sociologist James Coleman, "social capital." In such a context, they argue, people are more likely to feel stressed and lonely and, as a result, will be more vulnerable to a wide range of ailments.

It would be foolhardy to say that inequality "causes" sickness. But perhaps not a great deal more foolhardy than to say that carcinogens "cause" cancer. One does not have to be an apologist for the tobacco industry to note with interest that Japanese men live longer than American men despite being twice as likely to smoke; what is more, they have lower rates of lung cancer. With socioeconomic forces as with biochemical ones, it seems, we are talking about influences rather than causes -- about two kinds of influences that work together, for good or ill, in ways more complicated than medical science has generally been willing to acknowledge.

In the United States nowadays, there is little support for new policies on the scale of Social Security, the GI Bill, Medicare, or any of the other great initiatives that arguably played a role in the equalizing trend of the postwar years. Indeed, America's comparatively hard-nosed attitude toward its have-nots and have-lesses is widely portrayed as an important element of its recent economic success. Softer-hearted nations are counseled to adopt a reward structure more like that of the United States, if they know what's good for them.

HITTING THE WALL: Many will be tempted, then, to concentrate on narrower problems -- for example, on the failure of Medicare to cover prescription drugs. Before we make such a choice, however, it might be worthwhile to point to other policy areas where reformers face an oddly similar dilemma.

Consider campaign finance. Here's another cause resting on the theory that money ought not to control access to something vital -- namely, the levers of democratic government. For years, the movement has been stuck on the effort to pass a piece of legislation known as the McCain-Feingold bill. Yet even its greatest champions realize that the bill's effects, should it ever become law, are likely to be modest. With or without McCain-Feingold, a wealthy person or corporation will find ways to use that wealth to sway the political system. It is only natural for the wealthy to try -- and for public institutions to succumb. "We can either have democracy in this country," Louis Brandeis said a long time ago, "or we can have great wealth concentrated in the hands of a few, but we can't have both."

In education, too, well-intentioned citizens are working to fend off the effects of steep economic inequality. In New York State, suburban school systems make as much as twice New York City's per capita investment in the public schools: $12,000 or $13,000 a student versus $6,000 or $7,000. A New York State court recently ruled in favor of the plaintiffs in a lawsuit over this imbalance, and perhaps New York will someday join the small group of states that have seen fit to enforce a degree of equality in educational spending. But with immense differences in wealth between one local jurisdiction and the next, there's a limit to what a state can do. The greater the official commitment to equality, the more parents in the affluent areas (those who stick with the public schools at all) can be counted on to pony up extra money for sports programs, computer programs, music, art, and other forms of what is all too aptly known these days as "enrichment."

Besides, as many conservatives have long argued, the size of the school budget can only do so much to compensate for differences in neighborhood or family environment. James Traub, writing in the New York Times Magazine last year, argued that reformers have put an impossible burden on the schools by, in effect, making them responsible for solving all the social problems of their communities. Traub cited a number of expensive school reform programs that had yielded little benefit. By contrast, his article took stock of several experiments in which families received vouchers to move from poor to middle-class neighborhoods. Although the evidence is hardly in, preliminary indications suggest that these "slum to suburb" initiatives may be more educationally beneficial than any known variety of school reform. Moving to the suburbs also seems to have a salutary effect on children's health.

Technology is only the latest area where humanitarian ideals lead people into an effort to carve out an oasis of relative equality in a world of extreme inequality -- and where they find out how hard that can be. Several years ago, checking on the progress of a computer giveaway program in Soweto, South Africa, Bill Gates noticed something unsettling: there was only one electrical outlet in the place he was visiting. "They had plugged in that computer, he recently recalled, and when I was there, that thing was running and everybody was very thankful. But I looked around and thought, 'Hmm, computers may not be the highest priority in this particular place.'" While Gates his shifted his philanthropic attention away from the so- called digital divide (toward health care, as it happens), many of his fellow technologists continue to donate vast quantities of computer hardware and software to disadvantaged schools, where, we frequently discover, neither the teachers nor the students quite know what to do with these blessings.

In one problem area after another, reformers are hitting the same barrier to progress, and, by and large, hesitating to acknowledge it. Within our professional silos, we are expected to stick to our areas of expertise: if the problem is health, the answer must be health care. To say anything else -- to speak of the need, for example, to strengthen communities and reduce economic inequality -- is to invite not only the derision of economists but the criticism of one's professional peers and superiors. Plainly, this is not going to be an easy argument to raise. Not for health reformers. Not for educational reformers. Nor for those seeking to widen access to technology or to subdue the power of money in politics. But if the nation as a whole isn't talking much about the consequences of extreme economic inequality, it is partly because those who have seen the consequences up close aren't talking much, either. As we summon the courage to speak out, one group will stumble on another, and together our cries may finally be heard.

Facts and Figures

by Chris Hartman
Last updated: June 1, 2001

Part 1: Wealth Patterns

Source: Edward N. Wolff, "Recent Trends in Wealth Ownership, 1983-1998," April 2000. Table 2. Available on the website of the Jerome Levy Economics Institute at www.levy.org/docs/wrkpap/papers/300.html

1.2 Change in Average Household Net Worth by Wealth Class

Source: Edward N. Wolff, "Recent Trends in Wealth Ownership, 1983-1998," April 2000. Table 3. http://www.levy.org/docs/wrkpap/papers/300.html

1.3 Household Net Worth by Wealth Class, 1998

Source: Edward N. Wolff, "Recent Trends in Wealth Ownership, 1983-1998," April 2000. Table 3 and note to Table 5. http://www.levy.org/docs/wrkpap/papers/300.html

1.4 Top 1% Share of Household Wealth

Source: Edward Wolff, Top Heavy, 1996, New Series Households data, pp. 78-79 (for years 1922-89) and "Recent Trends in Wealth Ownership," April 2000, Table 2 (for years 1992-98) http://www.levy.org/docs/wrkpap/papers/300.html

1.5 Share of Total Ownership of Stocks, Mutual Funds, and Retirement Accounts, 1998

Source: Edward N. Wolff, "Recent Trends in Wealth Ownership, 1983-1998," April 2000. Table 6. http://www.levy.org/docs/wrkpap/papers/300.html

1.6 The Racial Wealth Gap, 1983-98

Note: Financial Wealth is Net Worth minus the value of owner-occupied housing.
Source: Edward N. Wolff, "Recent Trends in Wealth Ownership, 1983-1998," April 2000. Tables 8 and 9. http://www.levy.org/docs/wrkpap/papers/300.html

Page 2

1.7 Richest Individuals and Families in the U.S., 2000

Source: Forbes 400 website: http://www.forbes.com/400richest/ Data retrieved May 18, 2001. These are rough estimates, and a volatile stock market could mean dramatic changes in rank over time.

1.8 Median Wealth in the U.S. in 1998 dollars

Source: Analyses of the Survey of Consumer Finances, conducted every three years by the Federal Reserve Board. Kennickel and Wolff apparently interpret "net worth" differently. Kennickel's work is summarized in "Recent Changes in Family Finances: Results from the 1998 Survey of Consumer Finances," Federal Reserve Bulletin, January 2000, available at http://www.bog.frb.fed.us/pubs/oss/oss2/98/scf98home.html. Wolff's numbers are from his article "Recent Trends in Wealth Ownership, 1983-98," Table 1, available on the website of the Jerome Levy Economics Institute at www.levy.org/docs/wrkpap/papers/300.html

1.9 Total Household Net Worth in the U.S. (in trillions of dollars)

Source: Federal Reserve Board, Flow of Funds Accounts, March 9, 2001.

1.10 Number of Millionaires in the U.S.

Sources: Merrill Lynch / Gemini Consulting, World Wealth Report 2000, Figure 3, and Merrill Lynch / Cap Gemini Ernst & Young, World Wealth Report 2001, Figure 1.

1.11 Number of Millionaires in the World

Source: Forbes 400 website: http://www.forbes.com/400richest/

1.13 Number of Billionaires in the World

Source: Merrill Lynch / Gemini Consulting, World Wealth Report 2000, Figure 8.

In 1999, two-thirds of the estate tax was paid by the wealthiest one percent of families. (U.S. Treasury Department)

Since the mid-1970s, the most fortunate one percent of households have doubled their share of the national wealth. They now hold more wealth than the bottom 95 percent of the population. (Shifting Fortunes)

In 1998, 18.7 percent of American children lived in poverty, a lower rate than 1993 (19.6 percent), but higher than the 1979 rate of 16.4 percent. (Columbia University, http://cpmcnet.columbia.edu/dept/nccp/  )

Nine states have reduced child poverty rates by more than 30% since 1993. These states include Tennessee, Michigan, Aransas, South Carolina, Mississippi, Kentucky, Illinois and New Jersey. Michigan is a prime example of a national trend, in that even the recent, dramatic improvement did not counter the losses of the previous 15 years, in which its poverty rate increased 121%. (Columbia University)

In California, the number of children living in poverty has grown from 900,000 in 1979, to 2.15 million in 1998. (Columbia University)

Nearly 3 percent of all workers live under the federal poverty line, defined in 1998 as $13,003 for a family of three. Counting dependents, this encompasses roughly 5 million people.(The Conference Board, contact Linda Barrington, 212-339-0481)

In 1998, the top 1 percent of stock owners owned 47.7 percent of all stock, while the bottom 80 percent owned 4.1 percent. Between 1989 and 1998, nearly 35 percent of all stock market gains went to the top 1 percent of shareholders. 64 percent of American households have stock holdings worth $5,000 or less, or own no stock at all. (Economic Policy Institute)

Between 1995 and 1998, the total wealth of the typical American household rose from $58,800 to $61,000. The average value of stock holdings rose $5,500, the value of non-stock assets (mostly homes) climbed $8,500, and household debt increased $11,800. (Economic Policy Institute)

Middle-class families enjoyed 2.8 percent of the stock market gains between 1989 and 1998, but accounted for 38.8 percent of the increase in household debt. (Economic Policy Institute)

In 1998, 62.9 percent of private sector workers had employer-provided healthcare, down from 63.1 percent in 1989. 49.2 percent of private sector workers have employer-provided pension plans. (Economic Policy Institute)

60 percent of U.S. workers say that if they were laid off, their savings are sufficient to maintain their current standard of living for a few months or less. Only 29 percent said they are able to save for the future. 40 percent say they earn enough to be comfortable, but not to save, while 27 percent said they earn only enough to get by, and 3 percent said they are unable to pay their bills. (Fleet Bank, contact Rena DeSisto, 212-703-1961)

64 percent of U.S. workers say they would rather have more time than more money. Even in households earning less than $25,000, 49 percent said they would still prefer time over money. (Fleet Bank)

Fewer than 43,000 estates -- 2 percent of the total -- paid federal estate taxes in 1997. (Money, 9/2000)

In 2000, the federal estate tax is expected to raise $27 billion, more than double the amount of federal income taxes paid by the bottom half of all taxpayers. (United For a Fair Economy, http://www.ufenet.org/activist/action_alert/Estate_Tax_Talking_Points.html )

A study by Treasury Department economist David Joulfaian found that eliminating the estate tax would reduce charitable bequests by about 12 percent. (United For a Fair Economy)

While the top tax rate is 55 percent, on average, estate taxes represent 17 percent of the gross value of the estate. (United For a Fair Economy)

More than 2.5 million households have investable assets of more than $1 million, up from 2 million households in 1995. (Time, 12/14/98)

As a result of stock-market gains, the most affluent 25-30 percent of American households) are about 20 times wealthier, on average, than they were in 1989. (New York Times, 9/20/98)

Among the industrialized nations, the U.S. has the highest concentration of individual wealth--roughly 3 times that of the No. 2 nation, Germany. (UN Human Development Report, 1998)

As of 1997, the richest five percent of U.S. households held more than 60 percent of the nation's private wealth. The top 1 percent of households held 40 percent of the wealth. (Edward Wolff, relying on data from the Federal Reserve Survey of Consumer Finances)

Between 1983 and 1995, the average net worth of households in the bottom 40 percent of the population declined by 80 percent, from $4,400 to $900. The net worth of the middle fifth of the population declined by 11 percent. (Shifting Fortunes, Edward Wolff)

In 1995, the typical black household held only 12 percent of the wealth of the typical white household. With housing excluded, that figure would be 1 percent. More than 30 percent of black households (and 15 percent of white households) have no net worth. (New York Times 1/4/99, citing Edward Wolff)

Most Americans in the highest-earning one percent of the population (median annual income: $330,000) don't consider themselves rich. (Worth-Roper Starch Survey)

The inflation-adjusted net worth of the median household fell from $54,600 in 1989 to $49,900 in 1997. In nearly one out of five households, debts exceed assets. Household debt as a percentage of personal income rose from 58 percent in 1973 to an estimated 85 percent in 1997. (Chuck Collins, Betsy Leondar-Wright, Holly Sklar, Shifting Fortunes)

As of 1995, 40 percent of American households owned stock either directly or through a mutual fund or some sort of retirement plan. Almost 90 percent of the value of all stocks and mutual funds was held by 10 percent of the households. (Federal Reserve Survey of Consumer Finances)

Between 1983 and 1995, only the highest-earning five percent of households saw an increase in their financial net worth. By 1995, the bottom 40 percent of families headed by those between the ages of 25-54 had no savings. The middle quintile of income-earners (the middle class) have enough savings to sustain their standard of living for 1.2 months, down from 3.6 months in 1989. (Federal Reserve data as analyzed by Edward Wolff)

Between 1983 and '89, the net worth of American citizens grew by $5 trillion. About 54 percent of that new wealth went to the half-million families who make up the top one-half of one percent of the population. Federal Reserve and IRS data confirm that the net worth of the top 1 percent of Americans now dwarfs that of the bottom 90 percent--the most extreme wealth concentration since the 1920s. (Jeff Gates, "An Ownership Solution")

The likelihood of facing an Internal Revenue Service audit if you earned more than $100,000 last year: 1.03 percent. In 1988, the audit rate was 11.4 percent for such taxpayers. Now their chance of being audited is smaller than that of taxpayers earning less than $25,000 a year; their rate is 1.5 percent. (The New York Times, April 16, 2000)

The endowment of the Bill and Melinda Gates Foundation: $21.8 billion. The endowment of the Ford Foundation (No. 2): $14 billion. The money given away by John D. Rockefeller in his lifetime (in current dollars): $6 billion. By Andrew Carnegie: $3 billion. (The New York Times Magazine, April 16, 2000)

Widely cited Census Bureau data shows that the bottom fifth of American households earns 3.6 percent of total income, compared to 49 percent for the top fifth. However, the gap is narrower if measured on a per capita, rather than per household, basis. By this measure, the poor group earns 9.4 percent of all income while the wealthy group takes home 39.6 percent. The difference crops up because wealthier households tend to be larger: the top fifth includes 64 million Americans, while the bottom fifth holds just 40 million. (Fortune, 9/4/00)

The Gini coefficient is a complex statistical measure of inequality; a 0 coefficient is perfect equality (everyone has the same share), while a 1 coefficient is total inequality (one person has everything). In 1997, the United States had a Gini coefficient of 0.375, up from 0.323 in 1973. The 1997 figure is higher than any other "wealthy" country. Britain's is 0.346, Germany's 0.300, Canada's 0.286 and Sweden's 0.222. However, these figures relate to income, and Alan Greenspan points out that when applied to consumption, the Gini number for the U.S. falls by about 25 percent. In other words, the poor are more likely to own the same televisions, washing machines, etc., as the rich, than income figures might suggest. (Fortune, 9/4/00)

Household composition is a major factor in inequality. A single-parent household earns, on average, half of what a two-parent household makes. 90 percent of the people living in the wealthiest fifth of households are part of married-couple families; for the poorest fifth, fewer than one in three is part of a married-couple family. In the latter group, the majority (55 percent) are single. (Fortune, 9/4/00)

5.4 million Americans live in substandard housing or spend more than half their income on rent. (Fortune, 9/4/00)
 

Facts and Figures

by Chris Hartman
Last updated: June 1, 2001

Part 2: Income Patterns

2.1 Change in Family Income, 1947-79 and 1979-98

Sources: 1947-79: Analysis of U.S. Census Bureau data in Economic Policy Institute, The State of Working America 1994-95, p. 37. 1979-99: U.S. Census Bureau, Historical Income Tables, Table F-3: http://www.census.gov/hhes/income/histinc/f03.html. Thresholds: U.S. Census Bureau, Historical Income Tables, Table F-1: http://www.census.gov/hhes/income/histinc/f01.html.

2.2 Change in After-Tax Family Income, 1977-99

Source: Center on Budget and Policy Priorities, The Widening Income Gulf, September 4, 1999, citing Congressional Budget Office data: http://www.cbpp.org/9-4-99tax-rep.htm

2.3 CEO Pay as Multiple Average Worker Pay, 1960-99

Source: Business Week, annual surveys of executive compensation. Each year, Business Week surveys executive pay at 360 to 365 of what it terms "the largest U.S. corporations," covering 36 industries. The list of companies in the survey changes from year to year. Other sources of CEO pay data are the Wall Street Journal and Forbes Magazine.

2.4 Increase in CEO Pay, Worker Pay, and Inflation, 1990-99

Sources: Institute for Policy Studies and United for a Fair Economy, Executive Excess 2001, August 30, 2000, citing the following sources: CEO Pay: Business Week annual executive pay surveys. Average Worker Pay: Bureau of Labor Statistics, ÒAverage Weekly Earnings of Production Workers, Total Private Sector.Ó Series ID: EEU00500004. Inflation: Bureau of Labor Statistics, Consumer Price Index, All Urban Consumers (CPI-U).

2.5 Share of National After-tax Income, 1977-98 

Forty-seven million households in the United States have annual incomes below $35,000, and in the event of a layoff or a medical crisis, 40 percent of American families would run out of cash within three days. (New York Times)


If pay for production workers had grown as fast as pay for chief executives, factory workers would be making an average of $114,035 a year (instead of $23,753) and the minimum wages would be $24.13 (instead of $5.15). (United for a Fair Economy)


Income inequality declined from the late 1930s through the '60s. In the 1920s, the richest five percent of American families received about 30 percent of the nation's personal income. That share had decreased to 17.5 percent of income by 1947, and to 15.6 percent by 1969, according to the Census Bureau (whose figures underestimate high incomes by, among other things, excluding capital gains). After a brief period of stability, inequality began widening in the late '70s. The income share going to the richest five percent of families reached 17.9 percent in 1989, 20.3 percent in 1996. The richest one-half of 1 percent of American taxpayers now account for more than 11 percent of aggregate income. In recent years, only college graduates, about a quarter of the work force, have racked up significant wage gains. (Frank Levy, "The New Dollars and Dreams: American Incomes and Economic Change")


After a period of stagnation, workers are seeing more benefits from the strong economy. Between 1995 and 1999, average hourly wages rose 2.6 percent per year, compared to 0.6 percent between 1989 and 1995. In the more recent period, real wages for the bottom 10 percent of workers rose 9.3 percent, beating the 8.5 percent gain by the top 5 percent. However, over a 20-year period, the top group has seen a 17.6 percent increase in real wages, while the bottom group's wages have actually declined 9.3 percent. (Economic Policy Institute, 202-775-8810)


From 1989 to 1999, real compensation for the average CEO rose 62.7 percent. The ratio of CEO pay to average worker pay stands at 107:1. In 1989, it was 56:1.(Economic Policy Institute)


From 1995-1998:
Real income for low-income families rose 1.9 percent.
Real income for middle-income families rose 2.3 percent.
Real income for high-income families rose 3.2 percent.
(Economic Policy Institute)


Between 1989 and 1998, an average middle-class, married couple's income rose 9.2 percent. However, the family had to work an additional 182 hours per year (4.5 work weeks), for a total of 3,600 hours. The average, middle-income African-American family worked 4,278 hours per year, an increase of nearly 500 hours. In those same years, poverty rates fell faster for Hispanics (4.7 percent) and African-Americans (3.2 percent) than they did for whites (0.7 percent). Yet, minorities continue to have much higher overall poverty rates: African-Americans, 26.1 percent; Hispanics, 25.6 percent; Whites,10.5 percent. (Economic Policy Institute)


Reversing a long-term trend, the percentage of jobs classified as full-time rose from 73.6 percent to 75.1 percent, between 1995 and 1999. (Economic Policy Institute)


Often, practical challenges prevent the unemployed from taking work. In Cleveland, 80 percent of welfare recipients live in the central city, but 80 percent of entry-level jobs are located in the suburbs. In Boston, 43 percent of entry-level jobs are not accessible by public transportation. (The Brookings Institution, Center on Urban and Metropolitan Policy. "Why Cities Matter to Welfare Reform.")

Between 1969 to 1997, while the earnings of college graduates rose briskly, the inflation-adjusted median earnings of white male high school graduates 25 to 34 fell nearly 30 percent. (Sheldon Danziger, University of Michigan)

Since 1979, the average income of the highest-earning one percent of Americans has increased by roughly 80 percent, while the income of the highest-earning 20 percent has increased by 18 percent. The bottom 60 percent of the population has experienced a decrease in real income. (Shifting Fortunes)

In 1973, the combined income of the highest-earning 20 percent of American families was 7.5 times that of the bottom 20 percent. By 1996, the multiple was 13. (Census Bureau)

In 1998, the average American worker's inflation-adjusted weekly wages were 12 percent below what they had been in 1973. (Collins, Leondar-Wright and Sklar, Shifting Fortunes)

In 1980, the median male college graduate earned about a third more than the median high school graduate; by 1993, the gap had widened to more than 70 percent. (Business Week, 3/15/99)

In 1993, hourly wages of a median worker--one right in the middle of the income distribution--were 2.03 times the earnings of workers in the lowest tenth percentile. In 1997, the wage ratio had dropped to 1.93 times, the lowest figure in 16 years. (Economic Policy Institute)

In 1947, children were slightly less likely than adults to be poor. Now the reverse is true. (Frank Levy) The official poverty rate among children is about twenty percent. Among adults, it's twelve percent. (New York Times, 1/4/99)

In 1998, overall employee compensation at nonfinancial corporations grew 6.2 percent (without adjusting for inflation). Pretax profits grew by 2 percent. A few years ago, by contrast, profits were growing more rapidly than employee compensation. (Wall Street Journal, 4/19/99)

Although the wage gap has moderated slightly in the last few years, over-all income differences continue to widen, due to the impact of stock market gains. Americans with taxable incomes above $200,000 may only constitute a tenth of a percent of the population, but they accounted for 18.1 of the household income reported in 1996, up from 14.6 percent in 1994. In 1997, that share increased again, to 19.9 percent. (New York Times, 2/28/99)

Among chief executives of the biggest U.S. corporations, the median increase in overall compensation was about 10 percent last year, up from 25 percent in 1997, according to Graef Crystal. Corporate profits, meanwhile, rose 5 percent, and factory employees' pay, 2.6 percent. (New York Times, 4/4/99)

With stock options factored in, the average CEO of a major U.S. corporation made $7.8 million in 1997, up from $5.8 million in 1996. (Business Week, 4/20/98)

The average CEO makes 728 times more than a minimum wage worker. If the minimum wage had risen at the same rate as executive pay over the last three daces, it would stand at nearly $41 an hour as opposed to $5.15. (Institute for Policy Studies/United for a Fair Economy, April 23, 1998)

As a result of the merger between Chrysler and Daimler Benz, Chrysler chairman Robert Eaton will get $69.9 million in cash and stocks, and options worth another $239 million. In 1997, Daimler chairman Juergen Schrempp took home $2.5 million, while Eaton made $16 million, though Schrempp ran a larger and more profitable company. (United for a Fair Economy)

Since 1986, Bill Gates has been earning money at the rate of roughly $650,000 an hour. If there were such a thing as a $500 bill, it would not be worth Mr. Gates' while to take the time (circa 4 four seconds) to bend down and pick one up off the ground. (Bill Gates Net Worth Page).

The average wage of a Silicon Valley software engineer was $95,800 in 1998, the most recent year for which the data is available. In the largest of all employment categories, "local and visitor services" (including retail and restaurant workers), the average wage was $22,9000. (The New York Times, Jan. 10, 2000).

Health Patterns

31 million Americans - 12 million children - regularly go hungry or can't afford balanced meals. The number is down 3.5 million since 1995. (U.S. Census Bureau)

Infant Mortality

Eight American infants die for every 1,000 who are born. The infant mortality rate for African-Americans is twice as high: 15.8 deaths per 1,000 live births. (Children's Defense Fund)

The only OECD nations with higher rates of infant mortality are Hungary, Korea, Mexico, Poland, and Turkey. In 1994, 31,710 U.S. babies died. Fifteen thousand of them would have survived if our infant mortality rate was equal to Japan's. (Children's Defense Fund)

Life Expectancy

The United States spends more on medical care--13.6 percent of gross domestic product--than any other advanced industrialized society. Yet among the 29 OECD nations, we rank 21st in life expectancy. (Childrens Defense Fund) The average life expectancy for white Americans is 76.8 years. For black Americans, it stands at 70.2 years (Department of Human Services Health United States Report, 1998)


Death rates in the most economically divided metropolitan areas--such as Pine Bluff, Ark., an Mobile, Ala.--are sharply higher than the national annual average of 850 deaths per 100,000 people. The increase in mortality--an extra 140 deaths per 100,000 people--is equivalent to the combined loss of life from lung cancer, diabetes, motor vehicle accidents, HIV, infection, suicide and homicide during 1995. (Lynch J.W., Kaplan G.A., Pamuk E.R., et al. "Income inequality and mortality in metropolitan areas of the United States," American Journal of Public Health 1998)

The Japanese, well-known for the relatively small gap between the earnings of their top executives and ordinary workers, are the world's longest-lived people. Japanese men, who are twice as likely to smoke as American men, not only live longer but, remarkably, have lower rates of lung cancer. The 3.6-year gap in life expectancy between the United States and Japan (76.2 and 79.8 years, respectively) is equal to the gain we would realize if heart attacks vanished as a cause of death. (Washington Post, 8/16/98)

The Uninsured

Roughly forty-three million Americans--one sixth of the population--have no health insurance. In 1990, the figure was 32 million. (Knight-Ridder 2/19/99)


Eighteen percent of workers between 18 and 64 were uninsured in 1997--an increase of 15.7 percent over 1990. Sixty-nine percent of white workers were covered by employer-sponsored insurance, compared with 52 percent of African American workers and 44 percent of Latino workers. (Sacramento Bee)


One in four American workers has no access to employment-based health insurance coverage at any price. (General Accounting Office, Feb 1997, Employment-Based Health Insurance Costs)

About ten million children are uninsured. In 1996, 70 percent of all Americans added to the ranks of the uninsured were children. (Census Bureau)
 

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