Wealth Divide

Wealth Divide

There is a frighteningly simple agenda that has created a disturbing and growing wealth divide between the rich people in American and the rest of us. The wealthiest Americans have successfully influenced our political system and our economy in favor of themselves. While the wealthiest 1% have seen their annual incomes increase 18% in the last decade, the rest of us have experienced pay cuts, layoffs and foreclosures.

Policies shaped by conservative government and influenced by powerful wealthy interests have created harsh disparities in our nation. The increasing wealth divide is a direct result of tax and fiscal policies that have been instituted in our state and in our nation over the last 30 years. Preferential tax policies aimed at the wealthy such as lowering the capital gains tax have meant a virtual free ride for the top 1%. The tax cuts for the wealthy during the Bush era have starved governments' ability to invest in infrastructure and opportunity. Conservatives point to the deficits they created with the tax cuts as an excuse to cut programs that our families need - programs that create opportunity and development - programs like quality public education and access to higher education.

As a result, a huge share of the nation's economic growth over the past 30 years has gone to the top 1% percent, who now earn an average of $1.1 million per household. Between 1979 and 2009, the top 5% of families saw an increase of 72.7% in real family income. During the same time period the bottom 20%, those struggling to keep a roof over their heads, saw a decrease of 7.4% to their incomes, and it isn't much better for those in between. Those making in between $26,934 up to $47,914 dollars only saw an increase of 3.8% to their real family income. This is a drastic shift from the significant economic gains of the previous decades, when all income groups expereinced growth.

The average income for the bottom 90% of us is $31,244. This means that 1 % of the people take home nearly a quarter of the nation's income-this type of inequality just isn't right! In terms of wealth, the top 1% controls 34.6% of our nation's wealth. In a nation as wealthy as ours, we should all have enough!

What's even more disturbing is the RACIAL wealth divide in America. The Great Recession and the housing crisis have impacted communities of color much worse than whites. The wealth gap between whites and communities of color is at a record high; it is now almost double what it had been for the last 20 years. Wealth for Latino households fell by 66% and 53% for blacks between 2005 and 2009. According to Pew Research Center,"Plummeting home values were the principal cause of the recent erosion in household wealth...with Latinos hit hardest by the meltdown in the housing market."

Both the inequitable fiscal policies and the housing crisis must be addressed in order to ensure that our communities have the opportunities they need to recover from the Great Recession and thrive in the near future.