Income Gap in the US Widens - Again

As the recent joint report from the Economic Policy Institute and the Center on Budget and Policy Priorities proves once again that the gap between rich and poor is widening. It doesn't take a genius to realize that the poor sure aren't getting any richer! The booming stock market benefits those who invest in the stock market - and of course these people are generally wealthier to begin with. The incomes of the poor and middle class have fallen or stagnated. Here are some of the findings of the report:

• The average earnings of families in the top fifth of income distribution was $137,500 in the late 1990s. This was more than 10 times that of the poorest fifth of families, which had an average income of $13,000.
• In 46 states the gap between the incomes of the richest 20 percent of families and those of the poorest 20 percent is wider than it was two decades ago, the survey said. It made comparisons with both the late 1970s and separately, with the 1980s.
• The earnings of the bottom fifth grew less than 1 percent in the 10 years from the late 1980s but jumped 15 percent for the top fifth, the survey showed.
• Income for the poorest families rose $110 to $12,990. For the richest families it increased by $17,870, to $137,480, more than 10 times that of the poorest sector.

One of Marx's most famous predictions was that the rich would get richer, while the poor would continue to get poorer. Many of his critics point to the increase in material wealth over the past decades as proof that he was wrong - "the poor have gotten richer," they scream! But this conclusion is a complete misinterpretation and distortion of what Marx said. What he really said was that relative wealth would continue to diverge, while absolute wealth may in fact increase. What does this mean? Basically, this means that while in absolute terms things may get better (i.e., there is an increase the total amount of wealth each person is able to accumulate for personal use), in relative terms (i.e., relative to what the increase in what the rich get), things are getting steadily worse. Sure, we may have more TVs, cars, computers, etc. than 50 years ago, but the fact remains, that out of the total wealth produced by society, the rich have gotten the lion's share. The recent report backs Marx's prediction 100%. In fact, the average figures hide the real situation. In the worst case, New York, the poorest fifth earned just $10,770, a decrease of $1,970, while the wealthiest group earned $152,350, an increase of $19,680.

Of course the solutions offered by the "concerned" ruling class are the same as always - "trickle down" economics, and impotent calls for reform. They imagine that by encouraging investment in poorer areas (in other words, by handing out corporate welfare and tax credits to the rich), they can somehow "stimulate" these depressed economies. The fact that this has never worked, and that it was this very reasoning which in great part led to the ever widening gap, escapes them. Once again, we see that the only way in which the producing classes are going to get economic equality is if we fight for democratic socialism. Only under a democratically controlled plan of production, distribution and exchange can we lessen, and in time eliminate the economic gap between all members of society.

Peter Johnson
Editor, New Youth
January 19, 2000

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