Saturday, February 12, 2011

The Stanford Center for the Study of Poverty & Inequality: Facts About U.S. Inequality that Everyone Should Know

The Stanford Center for the Study of Poverty and Inequality is a project by Stanford and Harvard Universities aimed at studying policy initiatives to decrease wealth inequality in America. Their "20 Facts About U.S. Inequality that Everyone Should Know" presents graphics on poverty and nequality that illustrate the negative effects of "neoliberal" economic policy on working Americans. I'll discuss two of them.

The graph at left shows the gap in average CEO income as a ratio to average worker income. In 1970 a CEO made 39 dollars for every one dollar made his employee. By 2000 he made 1,031 to every workers dollar. The video below is excerpts from neoliberal icon Margaret Thatcher's last speech in the British House of Commons, justifying the similar explosion of wealth inequality in the U.K. under her rule.

Thatcher argues that the inequality her premiership built actually lifted all classes to a higher standard of living, a line that has been repeated ad nauseam by politicians on both sides of the ocean whenever they present a plan cut taxes. Problematically, wage growth is something measurable, and the claims made by Thatcher are demonstrably untrue. Unemployment tripled and British children became the most impoverished in Western Europe in the 1980s.

On the other side of the Atlantic the neoliberal policies of Ronald Reagan were similarly toted to increase the prosperity of all Americans. The bottom graph depicts the estimated "output" of each worker in terms of Gross Domestic Product during the last 40 years, which does increase during the Reagan years and continues to do so through George W. Bush. Middle class income, however, remains stagnant. So worker productivety increased while their wages stayed the same. To find out what happened to all that extra wealth, please refer to the first graph.

Just because it's yellow and trickles down doesn't mean it's gold.

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