Politics has let the rich grow richer
CEOs now make 350 times the wage of the average worker.
Former Clinton Labor Secretary Robert Reich has an interesting post up on his blog about just how distorted the income and personal earnings stats in this country have become over the last 30 years. Now you already know that the conclusion he's going to draw will be some leftish nonsense about labor unions not getting enough assistance or whatever, so we'll ignore the politics and just focus on the data (emphasis mine):Skip to next paragraph
Joshua has been managing money for high net worth clients, charitable foundations, corporations and retirement plans for more than a decade.
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Meanwhile, the rich have been getting a larger and larger portion of total income. From 9 percent in 1980, the top 1 percent’s take has increased to 23.5 percent in 2007. CEOs who in the 1970s took home 40 times the compensation of average workers now rake in 350 times. Financiers who forty years ago made only modest fortunes today, even after the Great Recession they helped bring on, routinely earn seven and eight-figures. In 2009, when most of the nation’s middle class was deep in recession, the 25 best-paid hedge-fund managers took in an average of $1 billion each. (Their marginal income tax, by the way, was barely over 17 percent, while the typical family paid a marginal tax far higher.)
The numbers are the numbers and they are pretty sick. That CEO pay multiple vs the average worker has supposedly headed lower since 2007, but it will probably remain at eye-popping multiples for some time to come. Anyway, Reich correctly points out some of the reasons why the top 1% now accounts for almost a quarter of all annual income, including the effects of globalization and the fruits of their lobbyists' labors:
What happened? It wasn’t just greed. It was also the systematic and ever cleverer manipulation of laws and rules by those able to pay lobbyists, legislators, lawyers, accountants to do their bidding. As income and wealth have risen to the top, so has the power to manipulate the system in order to acquire even more money and more influence.
To be sure, globalization and technological change have bestowed gains disproportionately on those with the education and connections to benefit most from them, while burdening Americans without the education and connections most needed.
Reich talks about the middle class beginning to really vent its anger and frustration. So that's good. Only problem is that the middle class as a demographic is shrinking right before our eyes, so how much will this venting really matter in the end?
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