Inequality in the United States

Study reports that New Yorkers struggle to put food on the table

February 3, 2012

Millions of people in the largest and wealthiest city in the US struggled to afford food last year, according to a report released last month by the Food Bank for New York City.

The Food Bank is New York’s major hunger-relief organization, which coordinates a network of more than 1,000 community organizations that collectively distribute up to 400,000 free meals daily. Its report reveals that working people across the city made painful sacrifices last year to put food on the table, and that food insecurity also rose among city residents with relatively higher incomes. These findings show that while the recession was officially declared over two-and-a-half years ago, working people are plagued by a deepening social crisis with no end in sight.

Entitled “NYC Hunger Experience 2011: Sacrifice and Support,” the report is based on analysis of data from an annual opinion poll conducted in collaboration with the Marist Institute for Public Opinion.

US CEO pay reaches new heights

January 27, 2012

And they continue to rake it in!

America’s corporate executives, already richer than Croesus, are not satisfied with having looted the economy of trillions of dollars in recent decades. Three and a half years after maneuvering the country to the verge of bankruptcy, the financial elite continues to enrich itself, legally and illegally, at the expense of the population and the general social interest.

The argument that CEOs deserve fabulous salaries because they “grow” the economy was always specious, but now, in the face of the financial meltdown and mass unemployment, such a claim simply generates popular outrage.

Despite nervousness in the media and the political establishment about the vast social inequality, nothing short of social upheaval will stop America’s executives from gorging themselves.

USA Today reported January 23, for example, that 2011 “is shaping up as the year of the $50 million-plus CEO.” The newspaper cited Walt Disney’s Robert Iger as “the latest” member of that exclusive club. Iger received $31.4 million in pay and perks and took in $21.4 million more from exercising previously awarded stock options and shares.

Republican presidential candidate Romney reports income of $21 million a year

January 24, 2012

Republican presidential candidate Mitt Romney released his tax returns Tuesday morning, revealing that he collected income of $21.7 million in 2010 and $20.9 million in 2011, nearly $42.6 million over the two-year period. Not a penny of this income was from salary or wages reported on a W-2. Nearly all of it was investment income, including capital gains, dividends and interest.

Most of the media attention has focused on how much Romney paid in taxes—about $6.2 million over that two-year period—for an effective tax rate of 13.9 percent in 2010 and 15.4 percent in 2011, well below the effective tax rate for many working people. This is certainly an important question, and demonstrates the role of the US tax system in redistributing income from the poor to the wealthy.

But the sheer scale of Romney’s income and the social distance between the multimillionaire and the vast majority of the American population deserves attention. Romney’s annual income of $21.7 million in 2010 comes to nearly $60,000 each day—more than the annual median household income in the United States, just over $50,000.

In other words, the former private equity CEO rakes in more every day from clipping the coupons on his past investments than the typical American household with two working parents makes in an entire year.

New studies show growth of poverty, class tensions in US

January 13, 2012

Two new studies document the growth of poverty in America and heightened awareness of the social tensions arising from the conflict between the rich and poor. Both deal with the impact of the recession and reflect rapid changes in both the economic conditions and consciousness of wide layers of the population.

“At Risk: America’s Poor During and After the Great Recession,” published by the School of Public and Environmental Affairs at Indiana University Bloomington, focuses on the growth of poverty as a result of the economic downturn, and the performance of the US “safety net” in response.

The Pew Research Center survey, “Rising Share of Americans See Conflict Between Rich and Poor,” reveals that “the issue of class conflict has captured a growing share of the national consciousness,” and that increasing numbers say there are “very strong conflicts” between the wealthy and those at the bottom.

The Indiana University study shows how the extended duration and severity of the economic downturn has “inflicted long-lasting damage to individuals, families, and communities.” In particular, the authors point to the growth of the “near poor” and “new poor” as a result of the recession.

Detroit-area CEOs rake in millions while city prepares further cuts

January 10, 2012

Detroit faces the threat of a takeover by a State of Michigan-appointed emergency financial manager, and discussions are under way over massive cuts. All sides in the official debate insist there is no money to fund vitally needed social services. Detroit officials are threatening thousands of layoffs and demanding steep concessions from workers in a city already suffering mass unemployment and pervasive poverty.

The publication of the Crain’s Detroit Business 2012 Book of Lists, which provides CEO pay and other financial information on Detroit-area corporations, puts the debate over the city’s budget crisis in a different light. Far from there being no money, the Crain’s report shows that the corporate elite in the Detroit Metropolitan area is rolling in cash, with individual executives in some cases making incomes equivalent to the budgets of entire city departments.

Topping the CEO compensation list in the Detroit metropolitan area is John Plant of TRW Automotive Holdings. According to Crain’s, Plant took in $49,863,382 in salary, bonus, incentive, stock and “other compensation” in 2010.

US unions aid in corporate wage-cutting campaign

December 30, 2011

The lead article in Friday’s New York Times business section, penned by Louis Uchitelle, praises the role of the US trade unions, in alliance with corporate management and the Obama administration, in implementing an historically unprecedented attack on the wages of US manufacturing workers.

The newspaper brings together data documenting the impoverishment of large swaths of manufacturing workers, focusing on the introduction of two-tiered wages at a General Electric plant in Louisville, Kentucky. The wages of new workers, the newspaper notes, “are $10 to $15 an hour less than the pay scale for hourly employees already on staff—with the additional concession that the newcomers will not catch up for the foreseeable future.”

The entry wage of unionized workers in auto, steel, tire and other basic manufacturing has fallen to as little as $12 an hour, which, based on a regular work week, just barely exceeds the official federal poverty level for a family of four (about $22,000).

Christmas of crisis in America

December 22, 2011

America at Christmas 2011 is a society of mass poverty, on the one hand, and vast wealth accumulation, on the other—tens of millions of people are poor and desperate, while a relative handful enjoy riches undreamt of by the Egyptian pharaohs or the aristocracy of Louis XIV.

Government agencies and social service groups document the tidal wave of human need in statistics that are increasingly mind-boggling: 50 million Americans live below the official poverty line, while another 100 million live in “near-poverty,” struggling to support themselves on incomes so low that they are one misfortune away from destitution.

Some 25 million workers are either unemployed or underemployed, 50 million live without health insurance, one out of every seven Americans receives food stamps. The number of self-employed Americans has fallen by two million over the past five years. Nearly six million of the jobless have been out of work for more than six months.

The jobs crisis has steadily worsened, not only year-to-year, but decade after decade. American capitalism continues to generate record corporate profits and wealth for the super-rich, but is less and less able to provide employment for working people.

The lamentations of the rich

December 21, 2011

Recent months have seen the eruption of popular anger throughout the United States at the staggering levels of social inequality, with the Occupy Wall Street protests gathering broad popular sympathy and support.

This development, unforeseen and unscripted by the media, has left Wall Street’s “masters of the universe” wallowing not only in money, but also in self-pity. What have they done, complain these tender-hearted architects of hedge funds, collateralized debt obligations and countless other forms of financial swindling, to merit such popular disdain? The Financial Times web site reported in an article posted Wednesday that the rich are “indignant,” resentful of the “class war” rhetoric that is being heard in public protests.

The protesters, they argue, have been misled into believing that higher taxes and the imposition of limits on the accumulation of personal wealth would have any significant impact on the national debt. The attention being given to their multi-million- and even billion-dollar annual winnings, the indignant rich maintain, is without the slightest economic justification.

US hunger, homelessness soar amid cuts in social spending

December 15, 2011

Amid continuous attacks on social services in the United States, hunger and homelessness are growing at epidemic rates, according to a report released Thursday by the United States Conference of Mayors.

The group’s annual survey of hunger and homelessness in its 29 member-cities states that requests for emergency food assistance grew by 15.5 percent in the past year. The number of homeless families grew by 16 percent. The survey covers the period between September 1, 2010 and August 31, 2011.

The mayors’ report is but the latest in a string of recent studies documenting the growth of poverty and social inequality in the US. Two days earlier, the National Center on Family Homelessness reported a 38 percent increase in child homelessness between 2007 and 2010, with the result that one in 45 American children are homeless. (See: “US child homelessness soars”).

The Associated Press, citing Census figures released last month, reported Thursday that half of the American population is either poor or low-income. With long-term unemployment at record levels, food pantries and homeless shelters are being overwhelmed by the growing ranks of the poor.

US child homelessness soars

December 14, 2011

More than 1.6 million children in the United States, or one in 45, are homeless, according to a report released Tuesday by the National Center on Family Homelessness.

The survey conducted by the Massachusetts-based advocacy group concludes that child homelessness surged 38 percent between 2007 and 2010, with the number of children living on the street, in homeless shelters or motels, or doubled up with other families rising over the period by more than 448,000.

Ellen Bassuk, president and founder of the National Center on Family Homelessness and associate professor of psychiatry at Harvard Medical School, told the World Socialist Web Site that the figures suggest “an emerging Third World in our own backyard.”

Among the key findings of the 124-page report, entitled “America’s Youngest Outcasts 2010,” are the following:

• The figure of 1.6 million children homeless in a year equates to more than 30,000 homeless children each week and over 4,400 each day.

• Children experiencing homelessness suffer from hunger, poor physical and emotional health, and missed educational opportunities.

• A majority of these children have limited proficiency in math and reading.