Articles on Inequality
from the news media
In Paul’s second letter to the Corinthians, he asks them to donate money to poor Christians in Jerusalem. He writes, “I do not mean that there should be relief for others and pressure on you, but it is a question of a fair balance between your present abundance and their need, so that their abundance may be for your need, in order that there may be a fair balance. As it is written, ‘the one who had much did not have too much, and the one who had little did not have too little’” (2 Corinthians 8:13-15).
Paul instructs the Corinthians on the importance of a “fair balance,” where no one has either too much or too little. May we have ears to truly hear Paul’s message today at a time when, in the United States and around the world, there are a few, extremely wealthy people, far too many poor, and many in the middle who are struggling to avoid sliding into poverty. As Paul said, a fair balance is needed. One person’s abundance is for another person’s need. There is plenty for all if we share. The Church is called to work for a world where there is a “fair balance” between abundance for a few and the needs of many.
While, thankfully, the Occupy Movement brought public attention to the 99% and 1%, it is really the top 1/100th of 1% who are doing extremely well. These roughly 16,000 households had income in 2012 of at least $10 million. During the past 40 years their average annual income has soared nearly seven fold, from $4.5 million in 1973 to $30.8 million in 2012, adjusted for inflation. At the same time, average annual income for the bottom 90% fell from $35,600 to $31,000. During this period the U.S. economy nearly doubled, per person. If those gains had been equally shared, everyone’s income could have nearly doubled also. Instead, most of the gains were reaped by the few at the top.
This trend is not inevitable. It is not a necessary consequence of globalization, technological change, aging of the population, or anything else. It has been, to use a term used by political scientists, “politically engineered.” In other words, the public policies we have chosen to govern our economy (both in the U.S. and globally) have created this outcome and other adverse impacts. Friends, it is time to change these policies.
A new UCC resource on Inequality
The rich get richer, the poor get poorer, and those in the middle struggle to stay there. Rising inequality is bad for all of us. A Fair Balance: Reducing Inequality in the U.S. and around the World, a new resource from JWM, explains what is happening, describes how inequality harms all of us, and outlines how to reverse this trend. A study guide facilitates group discussion and reflection.
Two short videos give excellent overviews of wealth inequality in the U.S. and globally.
Wealth Inequality in America (6 minutes, 24 seconds)
Global Wealth Inequality - What you never knew you never knew (3 minutes, 51 seconds)
Resources on inequality and children from JWM.
In a recent article, Pulitzer-prize winning reporter David Cay Johnston powerfully illustrates our nation’s inequality. Using analyses of IRS data made by two highly-regarded economists, he first notes that in 2011, average income among the bottom 90% of taxpayers was up just $59 compared with 1966. He represents that 45-year rise of $59 as a line just one inch long. Johnston then uses this measure -- one inch representing $59 -- to compare the gains of the bottom 90% and higher-income groups.
The gains of the top 10% of taxpayers, whose incomes rose by 84% over the 45 years (up $116,071 to $254,864), is a line 163 feet long. (By illustration, this is longer than the width of a typical 8-lane freeway with an inside median.) The difference between 163 feet and one inch is quite extreme but it gets worse. The gain in average income among the top 1% (up $628,817 over the period) is line 884 feet long. The top 1% of the top 1%, whose 2011 income averaged $23.7 million (up by $18.4 million compared with 1966) would require a line nearly five miles long. All these amounts are before-tax dollars, adjusted for inflation. Over the 45 years, the average amount of tax paid by the highest-income households has also declined.
The American Dream of moving up the economic ladder through education and hard work is largely a myth. And those who are at the top reap huge rewards, not primarily due to their talent, but to the ways in which our current political process helps the rich at the expense of everyone else. We need political reform and greater equality in opportunities for education for all. More.
Inequality is bad for our national economy. In addition to moral and ethical concerns about inequality, experts now think it is also bad for the economy. Evidence is building that inequality slows economic growth and causes less stable economic expansions, that is, we can expect slower growth of the economic pie and more recessions and economic crises like the one we are still trying to recover from. Experts even suggest that narrowing the inequality gap may be more economically beneficial than other factors – like boosting trade and foreign investment – that feature prominently on the political agenda. More.
Charts Illustrating the Growth in Inequality
Growing Inequality in Income, Wealth, and Life Expectancy [pdf 552 KB], charts compiled by Edith Rasell, JWM's Minister for Economic Justice.