Saturday, November 5, 2011

The Hurting 80%

The Occupy Wall Street protesters divide the country into two groups: the wealthiest 1% and all the rest, the 99%. I question whether that simply bifurcation is the best way to analyze the current financial situation of the people in the U.S. (or any other country).
In criticism of the OWS activities and public appeals, an opposition movement has been started and promoted by fiscal and political conservatives (Tea Party types). They call themselves the 53%—as in the 53% of Americans who pay federal income taxes. And they are making their voices heard on Twitter, Facebook, and elsewhere as they tout personal responsibility and the work ethic.
I have serious questions about the rhetoric of the 53% people, who speak mainly in opposition to the 47% of the USAmericans who do not pay any income tax. They stress that they, the 53%, are the “righteous” ones, those who are paying the taxes that support the government assistance received by many of the OWS protesters.
As you have probably seen, the Congressional Budget Office (CBO) in “Trends in the Distribution of Household Income Between 1979 and 2007,” a document released last month, indicates that after-tax income for the highest-income households grew more than it did for any other group.” That information was hardly a surprise.
(The CBO is a federal agency within the legislative branch of the U.S. government that provides economic data to Congress. It was created as a nonpartisan agency in 1974).
CBO finds that, between 1979 and 2007, income in the U.S. grew by:
   * 275 percent for the top 1 percent of households,
   * 65 percent for the next 19 percent,
   * Just under 40 percent for the next 60 percent, and
   * 18 percent for the bottom 20 percent.
The above summary shows a considerable difference between the top 1% and the next 19%. But still, the latter aren’t hurting all that much. In a previous posting I mentioned the fact that the top 1% possesses 42% of the financial wealth of the nation and the bottom 80% has only 7%. But that means that those who in the 2%-20% bracket hold 51% of the financial wealth on the U.S. So they should be making it all right financially.
(The statistics given above are based primarily on the work of Dr. G. William Domhoff, a research professor at the University of California. Domhoff first published Who Rules America? in 1967, and he has updated that bestselling book several times. Domhoff also presents his updated research on financial power in the U.S. on his website. )
It seems to me our main concern ought not to be directed toward the 99% in opposition to the wealthiest 1%. Rather, if we have any compassion for hurting people, shouldn't we be most concerned for the 80%, including the vast majority of the 47% whose income is so low paying taxes is not required? They are the people in our society who are hurting the most, and people who need help rather than criticism.


  1. A Thinking Friend from Canada wrote in an e-mail message,

    "The statistic quoted by the 53% (i.e. 47% don't pay income tax) is the best argument for the OWS folk. It means that the 47% are the jobless and the working poor. Good reason to protest the unequal distribution of wealth!"

    I responded,

    "I agree with what you wrote, but people in 'the 53%' tend to say that most of the 47% don't pay income tax because they are lazy freeloaders who are taking advantage of the 'nanny state.' I have been amazed at some of the negative things said about the 47%."

  2. Thanks for the well supported profile of American's current financial status. But what can be done that will result in proper assistance for the 47%. Those who have lobbied themselves into the privileged positions have all the more power to maintain them. A number of Republican controlled states have passed new laws requiring photo IDs to vote as a means to undercut the voting strength of the 47%. Somehow strong intentional efforts need to be made toward assisting those in the 47% to obtain the required IDs and encouraged to use their promised role in our democracy.
    Les Hill

    P.S. I have chosen "anonymous" as my profile because the ID asked for my name and then did not permit me to enter it--anyway I'll always sign the comment and give you permission when helpful to post it.

  3. In his most recent column, Paul Krugman writes: "Who's in that top 0.1 percent? Are they heroic entrepreneurs creating jobs? No, for the most part, they're corporate executives. Recent research shows that around 60 percent of the top 0.1 percent either are executives in nonfinancial companies or make their money in finance, i.e., Wall Street broadly defined. Add in lawyers and people in real estate, and we're talking about more than 70 percent of the lucky one-thousandth."

    An interesting factor which I've not seen addressed yet in these talks about income distribution is the fact that since 1970, the percentage of dual-earner couples has gone from 39% to somewhere around, I believe, 60%. It's quite possible that most or all of the gain in income by the lower-to-upper-middle classes in America has been a result of adding an income; suggesting, if true, the trend toward inequality has been even worse than the raw numbers suggest; presaging perhaps, again if true, an even worse future as the impact of dual-earnings levels off.

  4. I agree with your suggestion that 80%-20% may be a better focus than 1%-99%. However, there are still other ways of looking at it.

    I found David Brooks' column, "The Wrong Inequality," thought provoking. (I read it in the KC Star, the following link is to the NY Times)
    He pointed out another inequality prevalent in our society. The best indicator of whether a person will graduate from college is whether their parents have college degrees. This disparity has morphed into a hereditary wealth advantage because of the income advantage that comes with having a college degree.

  5. Thank you, Rev. Seat, for this clear-headed post. While I sympathize with the current Occupy XXXX movement's calls for greater equity and justice, I've found the "99%" rhetoric to be off-puttingly hyperbolic and, I fear, counterproductive.

    One of the characteristics of the so-called "Tea Party 54%" that I've found dishonest since day 1 is the fact that, overall (with some exceptions), the Tea Party movement takes aim at programmes that assist the jobless, vulnerable and the working poor, but not at all at military spending. Somewhere in the neighbourhood of 50% of all tax revenues are paid out to feed the military-industrial complex (I tend to agree with those who say MUCH MORE than 50%, counting military pensions and military-related debt servicing), and yet the Tea Partiers make no issue of this fact. I'm willing to bet that well-paid employees and lobbyists of this military-industrial tax sinkhole are well represented in the Tea Party. I'm also willing to bet that many of them are "Christian." A good confession might be in order.

  6. Yesterday I received this brief e-mail from my esteemed Thinking Friend in Kentucky:

    "Bravo! A splendid point, Leroy! It's right to ask more than 1% to bear more of the burden since the enjoy far more of the benefits. Ayn Rand wouldn't like it, but Jesus would."

  7. Bob C. has pointed out to me the article by Paul Krugman (Oligarchy, American Style) that in essence is a contradiction to the Books' article that I previously referenced.
    (The above is a shortened address to the Krugman NY Time article)