America as a Banana Republic?
New York Times columnist and human rights activist Nicolas Kristof has a great column up on the Times website about America’s growing income inequality. He notes the harrowing statistics, made sharper by the Great Recession:
The richest 1 percent of Americans now take home almost 24 percent of income, up from almost 9 percent in 1976. As Timothy Noah of Slate noted in an excellent series on inequality, the United States now arguably has a more unequal distribution of wealth than traditional banana republics like Nicaragua, Venezuela and Guyana.
C.E.O.’s of the largest American companies earned an average of 42 times as much as the average worker in 1980, but 531 times as much in 2001. Perhaps the most astounding statistic is this: From 1980 to 2005, more than four-fifths of the total increase in American incomes went to the richest 1 percent.
Kristof goes on to talk about these statistics in the context of the coming fight on tax cuts. While it’s important to remember this data in that discussion, we should also remember that there are other, bottom up ways we can reduce income inequality. Increasing the minimum wage or expanding the labor rights of low income workers, for example.
Regardless, America’s income inequality represents one of our nation’s greatest economic challenges – and one we must overcome to secure a shared prosperity.