What is the wealth gap?
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What is the wealth gap?
Jeremy Hobson: Well this week we’ve been introducing you to our new Wealth and Poverty Desk.
Today, we’re going to tackle “The Wealth Gap” — the growing concentration of wealth in our country at the top, while those in the middle and at the bottom have lost ground. Marketplace’s Mitchell Hartman reports.
Mitchell Hartman: Back in 1979, the top 10 percent of earners took home about a third of the nation’s income. By the late 2000s, half that income was flowing into their paychecks. Another way to look at it: As the economy grew, fully 80 percent of the increase in our incomes went to the top 1 percent. Everyone else?
Well, not doing so well, says N.Y.U. economist Edward Wolff.
Edward Wolff: The middle class has basically been experiencing stagnating income, and, it turns out, stagnating wealth as well. So the benefits of economic growth have become almost totally concentrated in the hands of the rich.
But not everyone agrees gains for the rich come at the expense of the poor and middle class. Scott Winship of the Brookings Institution told a Senate Committee recently: Consider Mark Zuckerberg. He could make billions off Facebook stock.
Scott Winship: How would the typical American end up better off if Zuckerberg could not exercise those options? American inequality levels are viscerally bracing, but one still has to make the case that they are undesirable.
A lot of people are making the case for “undesirable.” They point to growing disparities in health care and education. And, economic mobility.
Timothy Smeeding at the University of Wisconsin’s Institute for Research on Poverty says a growing economy that leaves so many stuck at the middle or bottom tears at the social fabric. And he says it’s getting ever harder for the have-nots to move up the ladder.
Timothy Smeeding: Most low-income people do not begrudge the haves: ‘Hey, he had a smart idea, he went out and worked hard, that’s great, I want my son to have the same chance.’ But the problem is they’re increasingly realizing that their children will not have the same chance. That means the American dream is shaking right now.
The stronger job growth we’ve seen lately could expand the economic pie again. But few economists see the slice the rich get served up, getting any smaller.
I’m Mitchell Hartman for Marketplace.
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