Our Expanding Income Gap and Why It Matters

In 1958 the top 10% income share, including capital gains (income from investments), accounted for 33.56% of the wealth in the US. By 2008 this figure had risen to 48.23%. This means that in 2008, the 10% most wealthy people in America owned nearly 50% of our country's income.

What impact does this shifting of wealth have on other economic classes?

Well, before we launch into this examination it would help to delineate America's "official" economic classes. The challenge is that there are numerous opinions about income thresholds and education and job-type parameters for grouping economic classes, and I have been unable to find a digestible chart. So I have taken the liberty of distilling and combining several models to come up with the simplified outline shown below. Amounts are in 2011 dollars. I am not suggesting that my version is academically sound, but it's close enough for these purposes.

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The Top 400 - Owners of one or more mega corporations, Investors at a planetary level. Net worth over $1billion
The Super Rich - Includes most senior executives, celebrities, and heirs. Annual income over $700,000 
Upper Middle Class - Includes sought-after professionals, and senior managers. Annual household income over $120,000
Middle Class - Includes middle managers, other professionals and white collar workers. Annual household income over $75,000
Working Class (Upper bracket earns a Living Wage)- Includes blue collar workers. Annual household income over $50,000
Lower Class (Subsistence Workers) - Includes clerical and apprentice blue collar worker. Annual household income over $22,314 (2011 poverty level)
Working Poor - Entry-level, unskilled, minimum wage workers. Family household income less than $22,314 (2011 poverty level)

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The populace in the first four economic classes are doing at least well in terms of economic stability and well-being. It is the people that fall into the last three classes that are struggling, particularly the Lower Class and the Working Poor. And, as the gap between the very wealthy and the middle class steadily expands, the number of people in the last three classes is steadily increasing.

If we do not take measures to reduce this gap or at least halt further expansion, our economic demographics could morph into those of a third world country.

How so?

Let's start by looking at the Working Class, where people in the upper bracket of that class earn what's called a Living Wage.

REMINDER TO LEADERS AND POLITICIANS: Integrity and Honesty Matter

OK, I know I'm pretty idealistic but in my view Integrity and Honesty matter. While these characteristics are noble in every person, they are hugely important in our nation's Leaders and would-be Leaders.

How disheartening it is that so many people in high office have decided it is OK to tell tales, spin yarns, and tell out-and-out lies to the very same people they promised to represent - you and me. Some consider it perfectly acceptable to fiddle with numbers until the "data" chokes out the story they like, or to selectively quote snippets of a study instead of presenting the big picture. And, like sharks with chum, they tear into any opponent as needed to make themselves look good.  In today's political climate, such Leaders would find fault with Jesus if it promoted their own objectives.

Of course these people didn't wake up one morning with a sucking vacuum where integrity once lived. No, their ethics and honesty were traded as they worked their way up the ladder. Too many political candidates have no problem ditching honesty in favor of votes: they are as comfortable telling a lie as they are shaking a hand.

Mob Mentality and Racism

Over the past few months, I've made a conscious effort to expand my knowledge and my perspective about our Leaders and the issues facing our nation. Why? Because I think America is at a cross-roads and we need to be very careful about how we proceed. As a voter, I want to understand the issues and the actual (not proclaimed) values and credentials of the candidates. Otherwise, I'm just another bobbing head in the rabble.

So instead of relying on just 2 or 3 online news sources that reflect my own perspectives, I tripled my reading list and made sure it includes sources that "lean" in a direction other than my own. So far, this approach is working great: I've been learning a lot, and I find myself more willing to consider other viewpoints.

But an unpleasant side effect is that I am now 100% sure of a couple things I already suspected:

Neither Party Is More Fiscally Effective - It's Not That Simple

As part of a long-running discussion as to the fiscal effectiveness of Republicans v. Democrats, I sent a friend of mine a link to the chart shown below. Not surprisingly, he quickly responded with an email that read, "But who was in control in Congress at the time?"

Click on image for larger view

Of course, my friend is right - we need to be cautious about looking at charts and drawing conclusions.