"In a time of universal deceit telling the truth is a revolutionary act." -George Orwell

Posts Tagged ‘Realonomy’

World Of Work 2013 Report: U.S. Inequality Now Literally Off The Chart And Rising

In Uncategorized on June 9, 2013 at 7:30 pm

This new chart from the ILO's latest World of Work report doesn't have enough room to visually portray the full extent of inequality in the United States.

Oldspeak: “This new chart from the ILO’s latest World of Work report doesn’t have enough room to visually portray the full extent of inequality in the United States.”

Among the world’s major nations, documents the UN agency dedicated to labor matters, only one currently has a level of inequality both high and rising” –Salvatore Babones

The controllers seem to have done quite well for themselves in this alleged “recovery”. The People have fared significantly worse with less to come as the full effects of U.S. austerity measures are felt. The stealth depression will continue and it’s getting worse.. The People in Cyprus, Greece, Spain, Portugal, Italy, and The U.K. have made their displeasure with the current state of affairs know loudly, repeatedly and en masse, where inequality is far less severe than in the U.S. Yet there’s a far smaller and more disjointed protest movement here in the “Greatest Nation On Earth”. Why? Why in a nation founded by protestors and civil disobeyers, are there so few to be found today? Was COINTELPRO, that effective? Perhaps it never really stopped?

By Salvatore Babones @ Inequality.org:

It is well known that the level of income inequality stretches much higher in the United States than in the other developed countries of Europe and North America. Now a report from the International Labour Organization shows that U.S. inequality has literally gone off the chart.

Income inequality in the United States is soaring so high, in fact, that the authors of the ILO’s new 2013 World of Work report couldn’t even place the United States on the same graph with the other 25 developed countries their new study examines.

Income inequality reflects the sum total of all the differences between the incomes enjoyed by different households in a country. Differences between rich and poor households, rich and middle-income households, middle-income and poor households all enter into total income inequality.

Researchers usually measure income inequality using a statistic called the Gini coefficient. The Gini coefficient runs from a minimum of 0 (perfect equality in incomes across all households) to 100 (one rich household gets all the income for an entire country).

The ILO report places the US Gini coefficient at 47.7, or almost half way toward the extreme where one rich household gets everything and everyone else gets nothing.

By comparison, the levels of inequality in the other 25 developed countries studied all fall in a band between 20 and 35.

The share of U.S. adults living in middle-income households dropped from 61 to 51 percent between 1970 and 2010.

Even worse, in America inequality is not only high but rising. The Unites States is one of only three developed countries where income inequality rose during the recession of 2008-2009, then continued rising through the lackluster recovery of 2010-2011.

The other two: Denmark and France. Both these countries had much lower levels of inequality to start with. By 2011, Denmark’s inequality had risen into the high 20s and France’s inequality into the low 30s.

In the United States inequality sat at 46.3 before the recession, moved to 47.0 in 2010, and rose further to 47.7 in 2011.

Rising inequality has hit the American middle class particularly hard. But America’s middle class decline began well before the recession hit in 2008. Every year fewer and fewer Americans qualify as middle class, and those who do have lower and lower incomes.

The share of U.S. adults living in middle-income households, the new ILO report notes,  dropped from 61 to 51 percent between 1970 and 2010, and the median incomes of these  households fell 5 percent.

Where has the middle class held its own in recent decades? Well, in Denmark and France, among other countries. The country with the largest middle class according to the ILO’s calculations is Norway, where about 70 percent of the population rate as middle class.

In Norway, about 70 percent of the nation rates as middle class. In the United States, only 52 percent.

In the United States today only about 52 percent of the population can claim middle class status.

The World of Work report concludes that the middle class in the United States and around the world is suffering from “long-term unemployment, weakening job quality, and workers dropping out of the labour market altogether.” Things have been bad for a long time, but the recession has made them far worse.

The ILO, founded in 1946, now operates a specialist agency of the United Nations. The world’s employers and workers are equally represented on its governing board, alongside the representatives of 28 governments, including the United States government.

Different international organizations use different data sources for comparing inequality levels across countries. The ILO World of Work report uses raw data from the Census Bureau for the United States and from Eurostat for European countries.

All these sources agree that income inequality has widened more in the United States than in other developed countries. The ILO report finds a much larger difference than other organizations, such as the OECD. One reason for the difference: As a UN organization, the ILO is committed to using data from official sources like the U.S. Bureau of the Census and published, peer-reviewed scientific journal articles.

Other organizations like the OECD and private think tanks make their own estimates of national inequality levels using data that may not be publicly available and methodologies that may not be transparent or audited.

Rising inequality is not inevitable. The rich are not winning everywhere.

According to the official data compiled by the ILO and documented in the World of Work report, only South Africa and about a dozen Latin American countries have higher levels of inequality than the United States.

In nearly all of these countries inequality appears to be either stable or falling. Out of a total of 57 countries studied by the ILO, 31 developing and 26 developed, only one — the United States — has a level of income inequality both high and rising.

This simple fact — that only one nation has inequality both “high and rising” — shows that high and rising inequality is not inevitable. The rich are not winning everywhere, just as the rich have not always won in the United States.

We can have sensible policies that reduce inequality and bolster the middle class. The ILO suggests that we prioritize employment growth over budget cuts, increase public investment to make up for a lack of private investment, and raise taxes on unearned income from financial transactions.

The folks at the ILO are smart enough to understand that the reasons our governments don’t give us good, pro-people policies are not technical or economic, but political and ideological.

“Against mounting evidence,” the ILO concludes, “a fundamental belief persists in some quarters that less regulation and limited government will boost business confidence, improve access to international financial markets, and increase investment, although these results have not been evident.”

The empirical evidence says that we can reduce inequality and bolster the middle class by putting people back to work. But that will take government action. And government action is the one thing we don’t seem to have.

 

Salvatore Babones is a senior lecturer in sociology and social policy at the University of Sydney and an associate fellow at the Institute for Policy Studies.

 

As The Plutonomy Powers Ahead, The Realonomy Remains In Recession

In Uncategorized on February 3, 2012 at 4:55 pm

Oldspeak:‘In a Plutonomy “the rich absorb a disproportionate chunk of the economy and have a massive impact on reported aggregate numbers.” In other words, official economic statistics no longer represent the experience of the economy as a whole. More and more, they represent only the experiences of the very rich...the Realonomy has been in recession since 1999. Even at the very top of the Realonomy, people have experienced flat or declining incomes over the past 12 years…The Realonomy won’t start growing again until America addresses its runaway inequality. We need fairer taxes, higher minimum wages, and more – not less – government spending…That may all sound counterintuitive in a recession, but that’s only because we’ve gotten so used to the politics of Plutonomy. Growth isn’t enough.’ –Salvatore Babones. Not only is Growth not enough, it’s unsustainable. Infinite growth in simply IMPOSSIBLE on a planet with finite resources. The current empire in decline, the U.S. of A. one of the biggest debtor nations on the planet has not come to terms with the fact that it is indeed an empire in decline, and is generating more debt than wealth, while drawing down assets faster than they can replenish them, thus accelerating the rate of decline. “The ‘culture of debt’ has become a global issue, and it is not just financial, but defines how every society and economy now interacts with respect to their fundamental economic, human and natural assets.” –Edward B. Barbier We can’t continue down this unsustainable path indefinitely. The music will stop and the party will end. Then what? That’s what we need to be asking ourselves. Then what?

By Salvatore Babones @ Truthout:

America’s longest recession since World War II officially ended in June 2009. Since then, the economy has expanded by almost 6 percent (adjusted for inflation). All of the losses of 2007-2009 have been erased.

American economic output is now at an all-time high. So why doesn’t it feel that way?

Back in October 2005, three Citigroup stock analysts heralded the arrival of a new kind of economic system in the United States. They called it the “Plutonomy,” the economy of the rich.

They explained that in a Plutonomy “the rich absorb a disproportionate chunk of the economy and have a massive impact on reported aggregate numbers.” In other words, official economic statistics no longer represent the experience of the economy as a whole. More and more, they represent only the experiences of the very rich.

Official economic statistics show that US national income per capita grew a cumulative 10 percent between 1999 and 2011 (adjusted for inflation). In aggregate, we generate 10 percent more per person than we did 12 years ago. Where did that 10 percent growth go?

Up in the stratosphere of the American Plutonomy, the IRS reports that incomes among the top 400 American taxpayers increased 107 percent between 1999 and 2007 (adjusted for inflation). Top 400 incomes declined in 2008, but by most accounts they have now bounced back to pre-recession levels.

For people who just make it into the top 1 percent, the gains have been much more modest. Their real incomes have risen about 12 percent since 1999, depending how you count. By some estimates, the increase has been closer to 6 percent. In other words, people at the 99th percentile of the US income distribution – people making upwards of $360,000 per year – have just about kept pace with economic growth in the economy as a whole.

Since 1999, no group below the top 1 percent has even kept pace. They are the “other 99 percent.” They live in the “Realonomy.”

In the Realonomy, people make most of their money from wages, not investments. In the Realonomy, people have to worry about retirement planning and health insurance. In the Realonomy, people can’t afford to lose their jobs.

While the Plutonomy continues to grow by leaps and bounds, the Realonomy has been in recession since 1999. Even at the very top of the Realonomy, people have experienced flat or declining incomes over the past 12 years. For example, families at the 95th percentile of America’s income distribution have experienced, on average, a 1.2 percent decline in real income (income adjusted for inflation) since 1999.

Further down the ladder, the situation gets worse and worse. For families at the 80th percentile, incomes are down 1.3 percent; at the 60th percentile, down 4.4 percent; at the 40th percentile, down 7.1 percent; at the 20th percentile, down 10.5 percent.

Nor does education provide an insurance policy. Among college graduates with full-time, year-round jobs, real incomes are down 3.6 percent over the past 12 years.

On the other hand, those without college degrees or full-time jobs have fared even worse.

The simple fact is that the Realonomy has been stagnant or in recession since 1999. The Realonomy hit bottom in 2009-2010, but it still hasn’t bounced back. Only the Plutonomy is growing, not the Realonomy.

The Realonomy won’t start growing again until America addresses its runaway inequality. We need fairer taxes, higher minimum wages, and more – not less – government spending.

That may all sound counterintuitive in a recession, but that’s only because we’ve gotten so used to the politics of Plutonomy. Growth isn’t enough.

We have growth. The top of the top 1 percent is growing like crazy. It’s government’s job to redirect some of that growth to the other 99 percent.