For Labor Day: Income Inequality Dampens Economic Growth for Rich and Poor Alike

In tribute to American workers, over half of whom earn less than $15 per hour but deserve so much more, we are reprinting our coverage on income equality. Where the minimum wage is $15 the local economy is boosted, reason alone to join the movement to rectify income equality.

See also: The Wealthy and Powerful Aid Social and Powerful Social and Economic Justice Activists and List of Organizations Working on Income Equality


The non-partisan Congressional Budget Office showed that after-tax average income ballooned 15.1% fro the top 1% of earners, but grew by less than 1% for the bottom 90% of earners. (TIME magazine, August 5, 2014)

reway2007 Flickr/creative commons

Flickr/creative commons

Correcting income inequality is not just a social and economic justice issue. When we talk about income inequality we have to be careful to distinguish it from income equality. Angry right-wing pundits seize on the term, income equality, to scare people with images of anarchy and culture wars.

Rather we are talking about righting a wrong, income inequality, by demanding equal opportunity, especially educational opportunity.

The dollar ratio between managers and workers compensation has increased ten-fold in favor of a few upon the backs of the many (more than 2-:1, two decades ago, to over 200:1, today). That gap in earnings has more and more been based on a widening education gap, which in turn further fuels the economic decline of the middle class and those already in poverty.

How many private homes, yachts, planes, cars, and vacation can you buy, after all? The very rich tend to stockpile their money as just another expensive commodity they can look at in self-admiration, just like Scrooge McDuck.

The overall economy worsens daily, as 90% of us spend, are often forced to spend, most of our income, thereby seeding the economy, while the top 1-9% sits on their excess wealth, again,  earned from the sweat of others. How many private homes, yachts, planes, cars, and vacation can you buy, after all?

There is a report out this week from Standard & Poor’s (S&P) that newly re-arms social and economic justice advocates. S&P is a respected Wall Street ratings entity that helps investors and top earners to become more wealthy through non-partisan presentations of financial facts and predictions. Now it has delivered a hard truth: unequal wealth distribution hurts the overall economy, actually creating recessions, inhibiting investments, and keeping us in harmful boom-and-bust scenarios.

The report cites the education gap as “a main reason for the growing income divide.”

With wages of a college graduate double that of a high school graduate, increasing educational attainment is an effective way to bring income inequality back to healthy levels.”

If we added another year of education to the American workforce from 2014 to 2019, in line with education levels increasing at the rate of educational achievement seen from 1960 to 1965, U.S. potential GDP would likely be $525 billion, or 2.4% higher in five years, than in the baseline. If education levels were increasing at the rate they were 15 years ago, the level of potential GDP would be 1%, or $185 billion higher in five years.

This education gap is a main reason for the growing income divide, and it affects both wages and net worth. From a wage perspective, occupations that typically require postsecondary education generally paid much higher median wages ($57,770 in 2012)–more than double those occupations that typically require a high school diploma or less ($27,670 in 2012).

But you first must have the opportunity to pay for higher education and that’s harder and harder to do as you go down the economic scale. If you care about social and economic justice or just care about a thriving economy or if you are a human capable of logical thinking, you know that major changes that increase access to a college education, without saddling people with decades of student debt, should be a matter of immediate importance.  


Check back tomorrow for a starting list of wealthy and/or powerful people who already understand the problem, and can be tapped to help activists bring this movement further into the mainstream.

Also see: United for a Fair Economy (UFE)  2011 Annual Report 

And, for those who like your info on video, here is Lawrence O’Donnell on MSNBC’s The Last Word, summing up many of S&P’s conclusions . . .



Real Democracy Demands Economic Democracy

The Garment Worker Scott Beale/ Flickr/creative commons

The Garment Worker
Scott Beale/
Flickr/creative commons

“Only 1 out of 8 American households is able to have the American Dream.”

Richard D. Wolff, author of Democracy At Work: A Cure for Capitalism, and leader of the Democracy At Work movement, appearing on Bill Maher’s HBO show, Real Time

We were told as children that capitalism was good because it supported the middle class. We were sold on the idea as “the American way,” but we all must admit at this point that capitalism has led us to some very bad consequences, burying this country in turmoil by making everyone poor so a few can become rich . . . very, very rich.

Wolff is a heterodox economist and Professor at The New School in New York City, looking more broadly at systems that work for all people, not just the “winners,” the few at the top. Wolff shows us how our capitalist crisis heaps “huge burdens on us for years,” taking issue with Americans total rejection of marxist criticism and other critics who actually had a few good alternatives for how to better approach commerce.

Wolff has become the chief spokesman bringing people to understand why democracy is absent from our economic system. 

For example, Wolff explains in the video below how new associations can make substantive change by replacing capitalism with worker self-directed enterprises (WSDEs) wherein workers decide how to use profits.  

Upon our relaunch this past spring, our Manifesto for A New Age of Sexual Freedom offered up the formula for real progress: the elimination of old, inhumane, and coercive systems; the preservation of what is old but also humane; and the creation of new, humane, and voluntary systems. We like to catalog progress, taking note when we we see it. Democracy At Work is one of the best examples of this new movement and is worthy of our attention and support. Together, we can make a difference.


Also see: The Silenced Majority by Amy Goodman


Yes, it’s true, anti-LGBT laws kill

Quantifying the Effects of Homophobia

Providing the quantifiable effects of homophobia will allow policy makers, economists, and global leaders to better understand that anti-gay laws ultimately do more harm than good, to LGBT people and the population at large.

–Dominic Bocci for The Advocate

Society must be kept accountable for the facts that an LGBT youth is 40% more likely to commit suicide than her straight counterpart. Homelessness, lack of health care access, substance abuse, and employment discrimination are all higher among LGBT people.two young girls laughing behind another girls back

Another new study, this time from Social Science and Medicine, has confirmed earlier data that . . .suicide, homicide, and cardiovascular disease are substantially elevated among sexual minorities in high-prejudice communities. As these studies become quite visible and accepted, they provide activists with perhaps more convincing arguments against discrimination, such as economics and public health, that may reach a larger audience of potential allies.

The community of Lesbian, Gay, Bisexual, and Transgender (LGBT) people have long focused on the moral argument against discrimination, and now can and should add these other dimensions that prove anti-LGBT laws hurt everyone.