Labor & Employment Law

U.S. Income Inequality Grows?Public Thinks It?s Not So Big

By Tula Connell

While the 1930s Depression raged and breadlines stretched for blocks in city after city, a poll found that the majority of the American public nevertheless identified themselves as “middle class.”

Uh, no.

But the myth of income equality, or near equality, persists even today.

This morning, the U.S. Census Bureau released data showing the income gap between the richest and poorest Americans grew last year to its widest amount on record. The top-earning 20 percent received more than 49 percent of all income generated in the country in 2009. The income gap has nearly doubled since 1968 and the United States now has the greatest income disparity among Western industrialized nations.

Yet here’s this from a recent study by Harvard psychologist Michael Norton and Dan Ariely, a behavioral economist at Duke (via Tim Noah, who in the past couple of weeks wrote a fantastic series on income inequality):

The richest 1 percent account for 35 percent of the nation’s net worth….The richest 20 percent (or “top quintile”) account for 85 percent….But when Norton and Ariely surveyed a group whose incomes, voting patterns and geographic distribution approximated that of U.S. population, the respondents guessed that the top quintile accounted for only 59 percent of the nation’s wealth.

Last week, the Census released data showing that a stunning 14.3 percent?43.6 million?in this country lived in poverty last year, with a record 6.3 percent in so-called deep poverty, earning less than half the official poverty threshold, or subsistence rate.

At nearly the same time, Forbes published its annual list of top billionaires, showing the combined net worth of the 400 richest Americans climbed by 8 percent last year, to $1.37 trillion. Or as MSNBC put it:

It has been a year of reclamation for America’s richest.

Yet when Obama called bailed-out bankers ?fat cats? after they paid themselves obscene bonuses with taxpayer money, they squealed, a reaction Zach Carter rightly labeled as “absurd”:

?the bailout barons Obama criticized had wrecked the economy and then paid themselves like princes for profits secured by taxpayer largesse. Those who did not benefit from such largesse have no reason to feel slighted by the critique, and those who did benefit have no reason to be complaining from their second homes in the Hamptons.

Here’s one reason behind Wall Street’s indignant reaction?to perpetuate the myth that wealth inequality in the United States is minimal. And when people don’t know the real facts, they won’t take to the streets.

But we are?along with tens of thousands of union members and allies on Oct. 2. Join us as we come together here in Washington, D.C., and around the country for One Nation. 

Full post as published by AFL-CIO NOW BLOG on September 28, 2010 (boomark / email).