The Rich Get Richer

This week marks the fifth anniversary of the collapse of Lehman Bros., heralding the Great Recession. And there’s been a fair amount of studies and stock-taking.

The main takeaway: the better off are better off than ever. Most of the rest are right where they started, or worse.

For example, earnings of the top 1 percent (those families making more than $394,000 a year) commanded 95 percent of the income gains generated between 2009 and 2012. Their earnings grew by 31 percent in the period, compared with 0.4 percent for the less fortunate.

Andrew S. Ross in S F Chronicle

And he adds this:

Fortune magazine, whose readers have a median household income of $91,000, probably appeals more to the 10 percent who are doing pretty well. Here’s Managing Editor Andy Serwer in a Sept. 2 front of the book editorial titled “The Income Gap.”

“So if you are with me so far and believe that income inequality is a problem, how do we solve it? We have to take a hard look at the effective tax rates of our very wealthiest citizens and have the fortitude to change the tax code, especially rates on capital gains.

“On the other side of the coin, we should increase the minimum wage. The federal minimum wage was last raised in July 2009 to $7.25 an hour, which works out to $15,080 a year. Consider that in 1968 the minimum wage was $1.60, which is $10.74 in 2013 dollars, or $22,339 a year. Wow is right.

“It’s time to acknowledge that growing income inequality is a trend we need to reverse, and that we need to find ways to make that happen. The super-rich should realize that after decades of outpacing the mean, their income growth will revert to it at some point. How that happens is the biggest question of them all.”

Leave a Reply

Your email address will not be published. Required fields are marked *