WEALTH DISTRIBUTIONWEALTH DISTRIBUTION

TRUE OR FALSE:TRUE OR FALSE:

IN THE US …IN THE US …

THE RICH ARE GETTING RICHER. THE RICH ARE GETTING RICHER. THE POOR ARE GETTING POORER.THE POOR ARE GETTING POORER.

FROM THE UN:FROM THE UN:

THE THE HUMAN POVERTY INDEX HUMAN POVERTY INDEX (HPI)(HPI) FOR RICH COUNTRIES RANKS FOR RICH COUNTRIES RANKS

COUNTRIES ACCORDING TO THEIR COUNTRIES ACCORDING TO THEIR NATIONAL LEVELS OF POVERTY, NATIONAL LEVELS OF POVERTY,

ILLITERACY, UNEMPLOYMENT, AND ILLITERACY, UNEMPLOYMENT, AND LIFE EXPECTANCY.LIFE EXPECTANCY.

SWEDEN COMES IN AT THE TOP WHILE SWEDEN COMES IN AT THE TOP WHILE THE US FINISHES LAST. THE REPORT THE US FINISHES LAST. THE REPORT

NOTES THAT SWEDEN, DESPITE A NOTES THAT SWEDEN, DESPITE A LOWER PER CAPAITA INCOME THAN THE LOWER PER CAPAITA INCOME THAN THE US, HAS, ON AVERAGE, MORE ADULTS US, HAS, ON AVERAGE, MORE ADULTS

WHO ARE FUNCTIONALLY LITERATE WHO ARE FUNCTIONALLY LITERATE AND FEWER LIVING IN POVERTY. THIS AND FEWER LIVING IN POVERTY. THIS INDEXINDEX SHOWS THAT EVEN IN MIDDLE SHOWS THAT EVEN IN MIDDLE

OR HIGH INCOME COUNTRIES, INEQUITY OR HIGH INCOME COUNTRIES, INEQUITY PERSIST.PERSIST.

HEALTH INSURANCEHEALTH INSURANCE

The number of Americans without The number of Americans without health insurance climbed by 33% health insurance climbed by 33% during the 1990s.during the 1990s.

The biggest indicator of a healthy The biggest indicator of a healthy society – longevity – has dropped society – longevity – has dropped from 11from 11thth in the world 20 years ago to in the world 20 years ago to 4242ndnd by 2007. by 2007.

Infant mortality has climbed (Cuba Infant mortality has climbed (Cuba has greater rates of child survival has greater rates of child survival than does the US).than does the US).

The “Gini Coefficient” measures The “Gini Coefficient” measures concentration of wealth. It is an concentration of wealth. It is an

index that goes from 0 to 1, index that goes from 0 to 1, 1 being the most unequal. 1 being the most unequal.

Wealth inequality in the US Wealth inequality in the US measures .82, pretty much the measures .82, pretty much the

highest level of inequality you can highest level of inequality you can have.have.

Economist Edward Wolff,Economist Edward Wolff, New York University New York University

WEALTH WEALTH OWNERSHIP OWNERSHIP

IN THE IN THE UNITED STATES…UNITED STATES…

The bottom 20% The bottom 20% basically have zero basically have zero

wealth. wealth. They either have no They either have no

assets, or their debts assets, or their debts equal or exceed their equal or exceed their

assets.assets.

The middle class has The middle class has “liquid” assets: checking “liquid” assets: checking

accts, accts, CDs, or pensions. CDs, or pensions.

Such assets make up Such assets make up 84% 84%

of their wealth…of their wealth…

……while the richest 1% while the richest 1% own about 85% of all own about 85% of all

financial securities and financial securities and 90% of 90% of

all business assets.all business assets.

We are much more unequal than any We are much more unequal than any other advanced industrial country. other advanced industrial country.

Perhaps our closest rival in terms of Perhaps our closest rival in terms of inequality is Great Britain. But where inequality is Great Britain. But where

the top percent in this country owns 38 the top percent in this country owns 38 percent of all wealth, in Great Britain it percent of all wealth, in Great Britain it

is more like 22 or 23 percent.is more like 22 or 23 percent.

This was not always the case. Up until This was not always the case. Up until the early 1970s, the U.S. actually had the early 1970s, the U.S. actually had

lower wealth inequality than Great lower wealth inequality than Great Britain.Britain.

But things have really turned around in But things have really turned around in Great Britain over the last 25 or 30 Great Britain over the last 25 or 30

years. In fact, a lot of countries have years. In fact, a lot of countries have experienced lessening wealth experienced lessening wealth

inequality over time. The U.S. is inequality over time. The U.S. is atypical in that inequality has risen so atypical in that inequality has risen so sharply over the last 25 or 30 years.sharply over the last 25 or 30 years.

The Merrill Lynch/Capgemini report The Merrill Lynch/Capgemini report predicts continued good times for the predicts continued good times for the wealthy around the globe in coming wealthy around the globe in coming

years, powered by rising stock years, powered by rising stock markets, growth in emerging markets markets, growth in emerging markets like China and India, and the broader like China and India, and the broader

economic recovery. The number of economic recovery. The number of ultra-high-net-worth individuals is ultra-high-net-worth individuals is

expected to grow 7% a year during the expected to grow 7% a year during the next few years, the report says, and next few years, the report says, and the total global wealth of financial the total global wealth of financial

millionaires is expected to hit $40.7 millionaires is expected to hit $40.7 trillion by 2008, trillion by 2008,

up from $28.8 trillion in 2003. up from $28.8 trillion in 2003.

Combined, “Forbes 400” Combined, “Forbes 400” (wealthiest 400 people in our (wealthiest 400 people in our country) wealth totaled more country) wealth totaled more than $1.1 trillion – an amount than $1.1 trillion – an amount

greater than the gross greater than the gross domestic product of Spain or domestic product of Spain or

Canada, the world’s 8Canada, the world’s 8thth and 9 and 9thth largest economieslargest economies..

CEO SALARIESCEO SALARIES

CEOs running 100 of the USA's CEOs running 100 of the USA's biggest companies pulled in median biggest companies pulled in median 2002 compensation of $33.4 million2002 compensation of $33.4 million

CEO salaries and bonuses surged 15% CEO salaries and bonuses surged 15% in a year; salaries for rank-and-file in a year; salaries for rank-and-file workers averaged 3.2% gainsworkers averaged 3.2% gains

More than 90% of CEOs received fresh More than 90% of CEOs received fresh stock-option grants, with a median stock-option grants, with a median potential value of $23.2 millionpotential value of $23.2 million

Home Depot Home Depot Severance Package Severance Package for for

Departing CEODeparting CEO

Countrywide PackageCountrywide Package

An analysis of securities filings An analysis of securities filings showed that CEO salaries rose showed that CEO salaries rose

12% in 2004 compared with 12% in 2004 compared with average raises of 3.6% for rank-average raises of 3.6% for rank-

and-file workers, further and-file workers, further widening the world's largest widening the world's largest gaps between executive and gaps between executive and

labor pay. labor pay.

CEO compensation swelled CEO compensation swelled from 85 times what workers from 85 times what workers

earned in 1990, to 209 times in earned in 1990, to 209 times in 1996, and 326 times the 1996, and 326 times the

following year. In 1999, CEO following year. In 1999, CEO pay surged to a record 419 pay surged to a record 419 times the average worker's times the average worker's wage, according to the U.S. wage, according to the U.S.

((Bureau of Labor Statistics)Bureau of Labor Statistics)

WORLDWIDE WORLDWIDE PHENOMENON…PHENOMENON…

The ratio of the income The ratio of the income in the in the worldworld for people in the top 1% has grown for people in the top 1% has grown from 6 to 1 in 1980 to more than 200 from 6 to 1 in 1980 to more than 200 to 1 now. That ratio is not to 1 now. That ratio is not sustainable.sustainable.

The FuturistThe Futurist, Jan-Feb 2006, Jan-Feb 2006

GROWING US POVERTYGROWING US POVERTY

MEANWHILE, THE NUMBER OF MEANWHILE, THE NUMBER OF AMERICANS LIVING IN POVERTY AMERICANS LIVING IN POVERTY IS A GROUP SO LARGE THAT IT IS A GROUP SO LARGE THAT IT WOULD TAKE THE COMBINED WOULD TAKE THE COMBINED

POPULATIONS OF MISSISSIPPI, POPULATIONS OF MISSISSIPPI, LOUISIANA, ALABAMA, LOUISIANA, ALABAMA,

ARKANSAS, AND TEXAS TO ARKANSAS, AND TEXAS TO MATCH IT.MATCH IT.

MILLIONS MORE WHO LIVE ABOVE MILLIONS MORE WHO LIVE ABOVE THE POVERTY LINE CANNOT THE POVERTY LINE CANNOT

AFFORD HEALTH CARE, FOOD, AFFORD HEALTH CARE, FOOD, TRANSPORTATION, AND OTHER TRANSPORTATION, AND OTHER

BASIC EXPENSES. OFFICIAL BASIC EXPENSES. OFFICIAL POVERTY LINES ARE THUS SET POVERTY LINES ARE THUS SET

TOO LOW: $9,800 FOR A SINGLE TOO LOW: $9,800 FOR A SINGLE PERSON, $20,000 FOR A FAMILY PERSON, $20,000 FOR A FAMILY

OF FOUR.OF FOUR.

BY CONTRAST, THE ECONOMIC POLICY BY CONTRAST, THE ECONOMIC POLICY INSTITUTE’S INSTITUTE’S

BASIC FAMILY BUDGET CALCULATOR BASIC FAMILY BUDGET CALCULATOR SAYS SAYS THE NATIONAL MEDIAN BASIC NEEDS THE NATIONAL MEDIAN BASIC NEEDS BUDGET (INCLUDING TAXES AND TAX BUDGET (INCLUDING TAXES AND TAX

CREDITS) FOR A TWO-PARENT, TWO-CHILD CREDITS) FOR A TWO-PARENT, TWO-CHILD FAMILY WAS $39,984 IN 2004 (OR $38,136 FAMILY WAS $39,984 IN 2004 (OR $38,136 IN NEW ORLEANS, OR $33,636 IN BILOXI, IN NEW ORLEANS, OR $33,636 IN BILOXI,

MISSISSIPPI).MISSISSIPPI).

WORSE, MINORITY INCOMES WORSE, MINORITY INCOMES REMAINED MUCH LOWER, ABOUT REMAINED MUCH LOWER, ABOUT

60% OF WHITE EARNINGS.60% OF WHITE EARNINGS.

LET’S COMPARELET’S COMPARE

MEDIAN INCOME MEDIAN INCOME BY RACIAL GROUPBY RACIAL GROUP

Black HouseholdsBlack Households

Hispanic Hispanic HouseholdsHouseholds

Non-Hispanic Non-Hispanic White White Households Households

Asian HouseholdsAsian Households

$30,134$30,134

$34,241$34,241

$48,977$48,977

$57,518$57,518

SPEND FIVE MINUTES WRITING SPEND FIVE MINUTES WRITING TO THIS QUESTION:TO THIS QUESTION:

WHAT DO YOU BETTER WHAT DO YOU BETTER UNDERSTAND ABOUT U.S. UNDERSTAND ABOUT U.S. INCOME DISTRIBUTION/ INCOME DISTRIBUTION/ POVERTY/SOCIAL CLASS POVERTY/SOCIAL CLASS

AS A RESULT OF OUR CLASS AS A RESULT OF OUR CLASS ACTIVITIES SO FAR?ACTIVITIES SO FAR?