Economic Inequality:Utopian Explorations

 "Research by David Hope of the London School of Economics and Julian Limberg of King's College London in 2020 examined 18 developed countries from Australia to the United States, finding that the incomes of the rich grew much faster in countries where tax rates were lowered.

What's more, rather than trickling down to the middle classes, the tax cuts accomplished little more than helping the rich keep more of their riches and exacerbated income inequality."
 
"The research has come to light after Donald Trump won a second term in office.
His victory added a record $64 billion to the wealth of the richest top ten people in the world – a list dominated by US tech billionaires – and could continue making them richer if his tax-cutting agenda is implemented in full."

ALICE is an acronym for "Asset Limited, Income Constrained, Employed"
 
"This term represents hard-working Americans who are employed but still unable to afford basic necessities such as food, housing, healthcare, childcare, and transportation."
 
"Socio-economic factors are broad, and include education, job status, family/social support, income and community safety. . . . And despite low unemployment rates, many jobs in the service sector and gig economy fail to provide living wages or benefits. This leaves workers vulnerable to financial instability, even when fully employed."

"Global dividend payments to shareholders grew 14 times faster than worker pay in 31 countries, which together account for 81 percent of global GDP, between 2020 and 2023, reveals Oxfam's new analysis ahead of International Workers' Day (May 1). Global dividend payouts to rich shareholders jumped by 45 percent in real terms between 2020 and 2023, while workers' wages rose by just 3 percent."
 
"The trend of rising dividends has worrying effects on inequality. The ILO has recently warned that "income inequality has widened."
 
"Using data from Wealth-X, Oxfam estimates that the richest 1 percent, who now own 43 percent of all global financial assets, pocketed on average $9,000 in dividends in 2023. This is equivalent to eight months of hard work and wages for the average worker."

"Top executives of dozens of major U.S. companies received more in their compensation packages from 2018 to 2022 than the businesses paid in federal taxes, according to a new analysis of financial data from the Institute for Policy Studies (IPS) and Americans for Tax Fairness (ATF)."
 
"The report highlights the issue of whether some America's biggest and most profitable companies are carrying their weight, and comes as President Joe Biden is proposing to boost the corporate tax rate to 28%, up from the 21% rate set under the {Trump] 2017 Tax Cuts and Jobs Act (TCJA)."
 
"Many corporations pay effective tax rates that are considerably lower than the statutory 21% federal rate because of loopholes and other breaks that help them lower their tax burdens. The effective tax rate for large, profitable companies declined to 9% in 2018, the year the TCJA's lower rates kicked in, from 16% in 2014, according to the Government Accountability Office."
 
"The [Trump 2017] TCJA's tax cuts, which also lowered individual tax rates, are partially to blame for the nation's ballooning debt, which has almost doubled in the last decade to $33 trillion. Some of the debt is also tied to pandemic spending measures authorized by Biden and former President Donald Trump.
 
According to the IPS and ATF, the tax cuts and outsized executive pay are also exacerbating income and wealth inequality."
 
"It says a lot about the priorities of the companies that a handful of people at the top are getting more than all of the money that profitable corporations are paying to help fund the vital public services and infrastructure that we need for our economy to thrive," Anderson said. "Just because something is legal doesn't make it fair."
 
Among the 35 corporations mentioned in the report were Tesla and Ford. "Tesla paid its top executives, including CEO Elon Musk, a total of $2.5 billion between 2018 and 2022, while receiving a $1 million tax credit over the same period, IPS said."
 

"Everyone knows that inequality has gotten out of hand in the United States. Thanks largely to the work of three now-famous economists—Thomas Piketty, Emmanuel Saez, and Gabriel Zucman—it's probably one of the most widely accepted facts in modern American life. Since the early aughts, they have meticulously documented the rate at which the richest have pulled away from the rest. Their research transformed domestic politics, leading President Barack Obama to declare inequality the "defining issue of our time," and turning the one percent into a shorthand for excessive wealth and power."
 
"In 1982, the year Forbes released its first-ever annual list of the 400 wealthiest Americans, the shipowner and real-estate tycoon Daniel Ludwig topped the list with a net worth of about $6 billion in today's dollars. In 2023, the top three wealthiest individuals, Elon Musk, Jeff Bezos, and Larry Ellison, were worth $251 billion, $161 billion, and $158 billion, respectively." 

"To take the true measure of inequality, economists need a way to account for all the income and expenses that don't show up on people's tax returns."

Arzu Geybullayeva, Global Voices, Posted 24 April 2024 8:55 GMT https://globalvoices.org/2024/04/24/lobster-gate-in-turkey-sparks-conversation-about-economic-inequality/
 
"There have been many "gates" in the history of global news, but not yet a "lobster gate." At least, not until the members of Turkey's ruling Justice and Development party (AKP) landed in a lobster-related scandal this week."
 
"Amid the deepening cost of living crisis in Turkey, ruling party MP Şebnem Bursalı found herself at the heart of public criticism when she posted a photo of a lobster dish during her trip to Monaco. Another party member, Salih Kahraman, also shared a photo of himself on social media celebrating his birthday with a lobster dish at the center of the table."
 
"President Recep Tayyip Erdoğan, speaking at a party meeting, said in response, "We cannot have any waywardness in this movement," referring to the members of the party. "There can never be a break from the nation's values and the nation's agenda," added the President. Following the posts, the party was accused of further distancing itself from the people and living lavishly while regular citizens were facing growing impoverishment. Memes were quick to spread on social media, with the image of a lobster replacing the infamous light bulb of the party's official logo."
 
"After facing public shaming over her post on her social media post, Bursali said in a tweet she was sorry and that the photo was from a vacation with her family."
 
"And there was also Bahadır Yenişehirlioğlu, another parliament member and AKP representative, who shared a selfie on social media with a Rolex watch on his wrist. After receiving a negative reaction to his post, Yenişehirlioğlu deleted his post."
 
"Much of the criticism is focused not necessarily on the fact that members of the ruling party have lavish lifestyles, eating lobsters and wearing expensive watches, but that this kind of lifestyle should not be shared online while the public at large is suffering from the financial crisis and poverty."
 
"Turkey has been grappling with an ongoing economic crisis, wherein the country's currency lost 40 percent of its value since last year and over 80 percent in the last five years."
 
"In March the Central Bank hiked interest rates to 50 percent in an attempt to steady the national currency in the face of still-rising inflation. In April, the Central Bank governor Fatih Karahan promised to continue taking all the measures necessary to curb inflation which is estimated to exceed 70 percent come May."

"Oxfam's new report, Inequality Inc., explores the disparity between the uber-wealthy and the rest of society. Since 2020, five billion people have become poorer, while the world's five richest men have more than doubled their fortunes—at a rate of $14 million per hour."
 
"Hundreds of millions of people are struggling to keep up with the cost of living; meanwhile, billionaires are $3.3 trillion richer than they were in 2020."
 
"Corporations use their influence to oppose labor laws and policies that benefit workers, for example by fighting minimum wage increases, while pushing for political restrictions on unionization and supporting rollbacks to child labor laws."
 
"Oxfam's report shows how a "war on taxation" by corporations has seen the effective corporate tax rate (the rate at which pre-tax profits are actually taxed) fall by roughly a third in recent decades, with many mega companies paying next to nothing in taxes."
 

In his book Justice (2009) Michael Sandel observes that "too great a gap between rich and poor undermines the solidarity that democratic citizenship requires." As inequality deepens, he continues, "rich and poor live increasingly separate lives."The result is a pair of separate and unequal societies since the "affluent secede from public places and services, leaving them to those who can't afford anything else."

In a 2020 study, nonprofit Inequality.org reports, "The racial wealth divide is where the past shows up in the present. The glaring gap in wealth reflects the multigenerational history of white supremacy in the United States and the systematic denial of wealth-building opportunities to Black people."

Rogé Karma, The Atlantic, November 25, 2023
 
"If there is one statistic that best captures the transformation of the American economy over the past half century, it may be this: Of Americans born in 1940, 92 percent went on to earn more than their parents; among those born in 1980, just 50 percent did. Over the course of a few decades, the chances of achieving the American dream went from a near-guarantee to a coin flip.
What happened?"
 
"One answer is that American voters abandoned the system that worked for their grandparents. From the 1940s through the '70s, sometimes called the New Deal era, U.S. law and policy were engineered to ensure strong unions, high taxes on the rich, huge public investments, and an expanding social safety net. Inequality shrank as the economy boomed. But by the end of that period, the economy was faltering, and voters turned against the postwar consensus. Ronald Reagan took office promising to restore growth by paring back government, slashing taxes on the rich and corporations, and gutting business regulations and antitrust enforcement. The idea, famously, was that a rising tide would lift all boats. Instead, inequality soared while living standards stagnated and life expectancy fell behind that of peer countries."
 
"The top marginal income-tax rate was 70 percent when Reagan took office and 28 percent when he left."

"No group of working Americans has paid a steeper price for income inequality in the tax-cutting past four decades than African Americans. . . . Over the decades, 'next to no progress has been made in closing the black-white income gap,' concluded a report for the Federal Reserve Bank of Minneapolis in 2018. 'The typical black household remains poorer than 80 percent of white households.'" James B. Steele, "How four decades of tax cuts fueled inequality." The Center for Public Integrity, November 29, 2022

Stanford history professor Walter Scheidel expresses concern that as our scientific and technological knowledge advances, economic inequality will accelerate and equality of opportunity will decline. Recent advances in gene editing, he notes, "have made it possible to delete and insert specific pieces of DNA both in Petri dishes and in living organisms with unprecedented ease." The acceptance of these procedures, says Scheidel, will lead to unequal outcomes "by handing an advantage to those able to afford private treatment." In the long run, he speculates, the creation of "designer babies" for the rich may curtail economic mobility, resulting ultimately in a "bifurcation into two different species," the "genetic elite,"—perhaps like the "Vril-ya" of Bulwer-Lytton's The Coming Race (1871) or the one percent in Doctorow's 2019 "The Masque of the Red Death" (discussed in chapter 7)—and the rest of humanity.

In the U.S. during the three decades after 1979, relates Christopher Hayes, "the top 10 percent captured all of the income gains, while incomes for the bottom 90 percent declined." The U.S. Federal Reserve reports that between 1989 and 2021 the share of the country's wealth the top one percent of the population owned grew from roughly 5 percent to 46 percent. In 2019 the average income of the top 1 percent was $1,614,468; the average income of the bottom 50 percent was $18,425, a factor of 88 times. A 2019 Washington Post article notes that "Income inequality in the United States has hit its highest level since the Census Bureau started tracking it more than five decades ago." The Brookings Institution in its 2022 "World Inequality Report" determined that "53 million Americans between the ages of 18 to 64—accounting for 44% of all workers—qualify as 'low-wage.' Their median hourly wages are $10.22, and median annual earnings are about $18,000." Anthropologist David Harvey reports, "The incredible concentrations of wealth and power that now exist in the upper echelons of capitalism have not been seen since the 1920s. "Indeed," says Piketty, "socioeconomic inequality has increased in all regions of the world since the 1980s."

Concerns about economic inequality are not restricted to utopians. Research by sociologist Erik Olin Wright focuses on the social harm economic inequality fosters. He lists five basic reasons unchecked economic inequality is harmful to society. 1) "Relatively unequal distributions characteristically generate more human suffering." 2) "Unequal distributions of wealth and income in the present generation characteristically generate inequalities of opportunities for future generations." 3) "Inequalities of income or wealth generate . . . large differences in people's real freedom." 4) "Large inequalities of wealth and income are likely to undermine democracy." 5) "Income inequality may be objectionable because partly because it fractures community . . . and makes social solidarity more precarious" which, he says, threatens "many aspects of the good society—personal security, mutual respect, [and] the provision of public goods." Erik Olin Wright, University of Wisconsin, "Reducing Income and Wealth Inequality: Real Utopian Proposals," Contemporary Sociology 29, no. 1 (Jan. 2000): 143–156, 145.

"Most Americans Say There Is Too Much Economic Inequality in the U.S., but Fewer Than Half Call It a Top Priority." PEW RESEARCH CENTER, JANUARY 9, 2020

"Across income groups, majorities say the government should raise taxes on the wealthiest Americans to deal with economic inequality, but few say their own taxes should be raised." https://www.pewresearch.org/social-trends/2020/01/09/most-americans-say-there-is-too-much-economic-inequality-in-the-u-s-but-fewer-than-half-call-it-a-top-priority/

For its most recent fiscal year, Dollar General reported a CEO to median employee pay ratio of 935 to 1. According to executive pay researcher Rosanna Weaver, CEO Todd Vasos collected $16.6 million while the "median" employee earned a mere $17,773. "But that published 'median,' Weaver suggests, may have substantially overstated what the typical Dollar General employee actually took home." Sam Pizzigati, Equality.org (Sept. 29, 2023). https://inequality.org/great-divide/how-about-a-general-strike-against-dollar-general/

"Women across Iceland, including the prime minister, go on strike for equal pay and no more violence," by Egill Bjarnason | AP, Washington Post, October 24, 2023.
 
"HUSAVIK, Iceland — Schools, shops, banks and Iceland's famous swimming pools shut on Tuesday as women in the volcanic island nation — including the prime minister — went on strike to push for an end to unequal pay and gender-based violence."

"The pact gives the United Auto Workers union some of its biggest wins in years, including a 25 percent wage increase over the life of the contract." Washington Post, Oct. 25, 2023

"In the wealthiest country on earth, sixty percent of earners live paycheck to paycheck. A recent report by the US Federal Reserve found that more than a third of households do not have the savings necessary to cover an emergency expense greater than $500. In the second quarter of 2023, the top ten percent of households, which includes around 13.19 million families, owned roughly sixty-nine percent of all wealth in the US. The amount for the bottom fifty percent of households, representing around sixty-six million families, was just 2.5 percent. 

"The important question, how poverty is to be done away with, is one which has disturbed and agitated society, especially in modern times."

"When a large number of people sink below the standard of living regarded as essential for the members of society, and lose that sense of right, rectitude, and honour which is derived from self-support, a pauper class arises, and wealth accumulates disproportionately in the hands of a few."

     ––G. F. W. Hegel, Philosophy of Right