America's Egregious Economic Inequality in a Single Statistic
As egregious as America’s economic inequality may appear, the reality is somehow even worse. Those are the findings of the University of California, Berkeley’s Gabriel Zucman, whose latest research reveals that the .00025 percent now own more than the bottom 60 percent. To put that statistic in perspective, 400 individuals control more wealth than 150 million combined.
“After a period of remarkable stability in the 1950s and 1960s, the top 0.1% wealth share reached its low-water mark in the 1970s, and since the 1980s it has been gradually rising to close 20% in recent years,” Zucman writes. “U.S. wealth concentrations seem to have returned to levels last seen during the Roaring ’20s.”
The numbers tell the story of our neoliberal age. Citing data from the World Inequality Database, whose executive committee includes Zucman and “Capital in the Twenty-First Century” author Thomas Piketty, among other economists, The Washington Post reports that those in the lower economic bracket mentioned above saw their share of the nation’s wealth dip from 5.7 to 2.1 percent from 1987 to 2014.
While the U.S. offers a dramatic data point, this ongoing redistribution upward is a worldwide phenomenon. According to an Oxfam International report published last month, the combined wealth of the world’s billionaires is growing $2.5 billion per day while the poorer half of the planet grows progressively poorer. Just 26 individuals are now worth as much as 3.8 billion ($1.4 trillion). At the same time, the total number of billionaires—2,208—has nearly doubled since the global financial crisis of 2008.
“More broadly, wealth serves two purposes,” Zucman notes in his introduction. “For everybody except the rich, its main function is to provide security. It enables individuals to smooth shocks (what is known as the precautionary saving motive) and to maintain consumption during retirement (the life-cycle saving motive). For the rich, wealth begets power.”
In recent months, there has been a concerted effort among the left wing of the Democratic Party to address the imbalance. Rep. Alexandria Ocasio-Cortez has floated the idea of a 70 percent marginal tax rate on income earned in excess of $10 million; Sen. Elizabeth Warren has proposed a wealth tax targeting the top .1 percent of American families; while Sen. Bernie Sanders has introduced the For the 99.8% Act, which would dramatically expand the scope of the estate tax, among other ameliorative measures. These proposals have proved enormously popular, with a spate of recent surveys indicating widespread support for soaking the rich.
Read Zucman’s working paper here.