The numbers are in, and, without a doubt, the United States has a problem with income inequality.
When taking inflation into account, wages for the bottom 90% of Americans have remained the same for the past 40 years (1). However, the wages for the top earners have increased substantially. This isn’t due to workers being lazy or workers receiving more benefits to offset their stagnant wages – it is because the top earners have been siphoning the money upwards and keeping it all for themselves (2). In 1980, the CEO of a company made 42 times as much as the average worker, while in 2015, that same CEO made 335 times as much money (3).
This isn’t a new issue – everyone from President Obama to news pundits to comedians have been talking about it for a few years now.
The Bottom 90% of Americans Have The Same Amount of Wealth As The Top 0.1% of Families – And That Isn’t Normal (4)
What can we do to combat income inequality in America?
1. Increase the federal minimum wage to reflect inflation and cost of living adjustments (5).
2. Support and enact legislation that requires huge corporations to pay their fair share of taxes.
3. Lifting the Social Security cap on taxable income. The rich are able to stop contributing to Social Security early in the year once their income cap is reached, while middle-class and poor families which need the income to survive pay into social security for the entire year.
4. Breaking up the huge financial institutions by implementing Glass-Steagall legislation, which helped to keep our economy from collapsing for over 65 years until its repeal in 1999 (6).
5. Stronger union membership legislation and pro-unionization attitudes, as union membership is directly and conversely tied to upper-income distribution, as seen in the chart below (5).
(1): Bureau of Labor Statistics (click for link)
(2): Economic Policy Institute analysis by Lawrence Mishel and Will Kimball (click for link)
(3): Institute for Policy Studies and AFL-CIO analysis of Bureau of Labor Statistics average hourly earnings data and corporate proxy statements, 2016
(4): The Guardian (click for link)
(5): Wage Stagnation in Nine Charts, Economic Policy Institute (click for link)
(6): 21st Century Glass-Steagall Act Fact Sheet (click for link)