WEALTH DISTRIBUTION TRUE OR FALSE: IN THE US … THE RICH ARE GETTING RICHER. THE POOR ARE GETTING POORER.

FROM THE UN: THE HUMAN POVERTY INDEX (HPI) FOR RICH COUNTRIES RANKS COUNTRIES ACCORDING TO THEIR NATIONAL LEVELS OF POVERTY, ILLITERACY, UNEMPLOYMENT, AND LIFE EXPECTANCY. HUMAN POVERTY INDEX HUMAN POVERTY INDEX

SWEDEN COMES IN AT THE TOP WHILE THE US FINISHES LAST. THE REPORT NOTES THAT SWEDEN, DESPITE A LOWER PER CAPAITA INCOME THAN THE US, HAS, ON AVERAGE, MORE ADULTS WHO ARE FUNCTIONALLY LITERATE AND FEWER LIVING IN POVERTY. THIS INDEX SHOWS THAT EVEN IN MIDDLE OR HIGH INCOME COUNTRIES, INEQUITY PERSIST.

HEALTH INSURANCE The number of Americans without health insurance climbed by 33% during the 1990s. The number of Americans without health insurance climbed by 33% during the 1990s. The biggest indicator of a healthy society – longevity – has dropped from 11 th in the world 20 years ago to 42 nd by The biggest indicator of a healthy society – longevity – has dropped from 11 th in the world 20 years ago to 42 nd by Infant mortality has climbed (Cuba has greater rates of child survival than does the US). Infant mortality has climbed (Cuba has greater rates of child survival than does the US).

The “Gini Coefficient” measures concentration of wealth. It is an index that goes from 0 to 1, 1 being the most unequal. Wealth inequality in the US measures.82, pretty much the highest level of inequality you can have. Economist Edward Wolff, New York University The “Gini Coefficient” measures concentration of wealth. It is an index that goes from 0 to 1, 1 being the most unequal. Wealth inequality in the US measures.82, pretty much the highest level of inequality you can have. Economist Edward Wolff, New York University

WEALTH OWNERSHIP IN THE UNITED STATES…

The bottom 20% basically have zero wealth. They either have no assets, or their debts equal or exceed their assets.

The middle class has “liquid” assets: checking accts, CDs, or pensions. Such assets make up 84% of their wealth…

…while the richest 1% own about 85% of all financial securities and 90% of all business assets.

We are much more unequal than any other advanced industrial country. Perhaps our closest rival in terms of inequality is Great Britain. But where the top percent in this country owns 38 percent of all wealth, in Great Britain it is more like 22 or 23 percent. This was not always the case. Up until the early 1970s, the U.S. actually had lower wealth inequality than Great Britain.

But things have really turned around in Great Britain over the last 25 or 30 years. In fact, a lot of countries have experienced lessening wealth inequality over time. The U.S. is atypical in that inequality has risen so sharply over the last 25 or 30 years.

The Merrill Lynch/Capgemini report predicts continued good times for the wealthy around the globe in coming years, powered by rising stock markets, growth in emerging markets like China and India, and the broader economic recovery. The number of ultra- high-net-worth individuals is expected to grow 7% a year during the next few years, the report says, and the total global wealth of financial millionaires is expected to hit $40.7 trillion by 2008, up from $28.8 trillion in 2003.

Combined, “Forbes 400” (wealthiest 400 people in our country) wealth totaled more than $1.1 trillion – an amount greater than the gross domestic product of Spain or Canada, the world’s 8 th and 9 th largest economies.

CEO SALARIES CEOs running 100 of the USA's biggest companies pulled in median 2002 compensation of $33.4 million CEOs running 100 of the USA's biggest companies pulled in median 2002 compensation of $33.4 million CEO salaries and bonuses surged 15% in a year; salaries for rank-and-file workers averaged 3.2% gains CEO salaries and bonuses surged 15% in a year; salaries for rank-and-file workers averaged 3.2% gains More than 90% of CEOs received fresh stock-option grants, with a median potential value of $23.2 million More than 90% of CEOs received fresh stock-option grants, with a median potential value of $23.2 million

Home Depot Severance Package for Departing CEO Countrywide Package Severance Package Countrywide PackageSeverance Package Countrywide Package

An analysis of securities filings showed that CEO salaries rose 12% in 2004 compared with average raises of 3.6% for rank- and-file workers, further widening the world's largest gaps between executive and labor pay.

CEO compensation swelled from 85 times what workers earned in 1990, to 209 times in 1996, and 326 times the following year. In 1999, CEO pay surged to a record 419 times the average worker's wage, according to the U.S. ( Bureau of Labor Statistics)

WORLDWIDE PHENOMENON… The ratio of the income in the world for people in the top 1% has grown from 6 to 1 in 1980 to more than 200 to 1 now. That ratio is not sustainable. The Futurist, Jan-Feb 2006

GROWING US POVERTY MEANWHILE, THE NUMBER OF AMERICANS LIVING IN POVERTY IS A GROUP SO LARGE THAT IT WOULD TAKE THE COMBINED POPULATIONS OF MISSISSIPPI, LOUISIANA, ALABAMA, ARKANSAS, AND TEXAS TO MATCH IT.

MILLIONS MORE WHO LIVE ABOVE THE POVERTY LINE CANNOT AFFORD HEALTH CARE, FOOD, TRANSPORTATION, AND OTHER BASIC EXPENSES. OFFICIAL POVERTY LINES ARE THUS SET TOO LOW: $9,800 FOR A SINGLE PERSON, $20,000 FOR A FAMILY OF FOUR.

BY CONTRAST, THE ECONOMIC POLICY INSTITUTE’S BASIC FAMILY BUDGET CALCULATOR SAYS THE NATIONAL MEDIAN BASIC NEEDS BUDGET (INCLUDING TAXES AND TAX CREDITS) FOR A TWO-PARENT, TWO-CHILD FAMILY WAS $39,984 IN 2004 (OR $38,136 IN NEW ORLEANS, OR $33,636 IN BILOXI, MISSISSIPPI). BASIC FAMILY BUDGET CALCULATOR BASIC FAMILY BUDGET CALCULATOR

WORSE, MINORITY INCOMES REMAINED MUCH LOWER, ABOUT 60% OF WHITE EARNINGS.

LET’S COMPARE

MEDIAN INCOME BY RACIAL GROUP MEDIAN INCOME BY RACIAL GROUP Black Households Hispanic Households Non-Hispanic White Households Asian Households $30,134 $34,241 $48,977 $57,518

SPEND FIVE MINUTES WRITING TO THIS QUESTION: WHAT DO YOU BETTER UNDERSTAND ABOUT U.S. INCOME DISTRIBUTION/ POVERTY/SOCIAL CLASS AS A RESULT OF OUR CLASS ACTIVITIES SO FAR?