The Rich Get Richer

As the gap widens in this country between the rich and the poor — and as mentioned before the middle class gradually slips into that gap — it behooves us to consider what the hell is going on. I recently blogged that 26 U.S. companies pay their CEOs more than they paid in taxes in the year 2011. The following chart tells the bigger story:

The standard excuse for this incredible disparity is that CEOs have to be paid huge amounts because of the competitive nature of Big Business — if we don’t pay the man or woman at the top enough $$ they will go elsewhere. In fact, that has become an excuse for hiring people at the highest levels not only in business but in such seemingly unrelated activities as coaching college football. But that’s a topic for another time.

The sad truth remains that the very rich in this country are becoming so at the expense of the middle classes who are, as a consequence, becoming poorer and poorer. While the rich grow richer and increasingly stash away more of their wealth in off-shore bank accounts (thereby giving the lie to the claim that they will create jobs with their tax breaks and subsidies and help the economy recover) the number of poor increases. In fact, the poverty levels rose 15.1% (46.2 million) in 2010 and 15.7& in 2011. As a recent story in Huffpost tells us:

WASHINGTON — The ranks of America’s poor are on track to climb to levels unseen in nearly half a century, erasing gains from the war on poverty in the 1960s amid a weak economy and fraying government safety net.

The number of homeless grows daily and those who find themselves suddenly out of work  struggle to find a minimum wage job — or two — in order to keep their homes and feed their kids. We need to consider who these people are. They are our friends and neighbors who have tripped over a weak economy. And increasing numbers of them are joining the ranks of the poor who need our help. Yet all we can think about is cutting taxes and eliminating social programs because we know of a few extreme examples of welfare abuse.

Those who work with the hard-pressed and homeless have a perspective that the rest of us can learn from. One such person is a blog-buddy who made the following comment on a recent post I wrote about the “typical pauper.” He said: ”

The homeless have no greater propensity toward substance abuse than those who are housed. Throughout my volunteer work with homeless families beginning in 1999, I have witnessed people who try to paint all of the homeless people with a broad brush based on the image of a panhandler on the street. The panhandler is just a small percentage of the homeless population. The agency I do most of my work reported in its July 30 fiscal year-end results – 84% of the homeless families they help are employed with a median average family wage of $9.00 an hour. A living wage for an individual is just under $10 an hour and for a family is just under $17 an hour (note this statistic varies by region).

Imagine yourself working at a well-paying job with a happy spouse and two kids in private school. Your home is mortgaged to the hilt and you have a fairly fat Visa bill to pay each month. But you can manage because you have a good paycheck coming in each week. Then imagine that one day you are called into a room by your boss who sits you down with the H.R. person and the company attorney and tells you that he deeply regrets he will have to “let you go.” You are given severance pay and there is always unemployment benefits to tide you over, but they will run out. In this economy it is quite possible that you will not be able to find any job at all except one that pays minimum wage with no benefits. While all this is happening to you and several of your fellow-workers, your boss is given a raise and more stock options and is now among the enviable 1% — those in the yellow box above. How do you cope?  Suddenly, it’s not someone else’s problem!

My example is fiction, of course, but in the world “out there” this sort of thing is happening with alarming regularity. In fact, I have a friend to whom this very thing has recently happened. He is a man with a Master’s degree and years of experience who now finds himself homeless and without an income. It is a serious problem. The gap between the very rich and the very poor is widening and while our anger over the obscene wealth of the few is perfectly justified, our attitude toward the poor needs to be tempered with compassion and the spirit of charity.

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13 thoughts on “The Rich Get Richer

  1. Another great post, Hugh! And I would say that yiur example is not fiction at all. It is exactly what has been happening to many families in this recession. Thanks for keeping the attention on this issue!!

  2. Business Insider had a good piece today by Henry Blodgett on how to fix the economy. A key point was the disparity in salaries, and that wages and salaries must increase if we have any hope of a recovery.

    Good work

    • Thanks. We pretty much know what the problem is, but the people who could effect change don’t want it! There’s the REAL problem!

      ________________________________

      • yes, and I work for one of those companies with disparity in salaries and I can tell you that they are not interested in increasing any of us worker bees’ salaries. you are lucky if you can get a 3% increase!! the only way to get more is to be promoted…..another seemingly impossible task….

  3. excellent post!! so far I have stayed away from political-type posts(I go to dailykos.com to get my fill of that) here on WordPress but this one grabbed my attention just from the title. I despise that ratio you show up there but I know that it is reality. And it scares the crap out of me the scenario you mention. It’s been said that one should have about 6 months worth of living expenses saved in the event of a catastrophe. Well, that is quite the joke isn’t it? as most of us stuck in the slowly dwindling middle class cannot possibly save that much money!! Here is a perfect example. I recently took advantage of the HARP program and am going to save over $200 a month with my refinanced mortgage! I was so excited about this and began to make plans with that money. Oh except kidlet needs braces and wouldn’t you know it, but insurance doesn’t pay much of anything….so guess where my over $200/month is going to? heavy, heavy sigh…..

    but how do we get that ratio to come down? seems we’re in a vicious cycle.

    • Thanks so much for visiting the blog! I honestly do not know how we can make the ratio come down. The wealthy are pretty much in control and own the politicians who make the laws that will guarantee that things don’t change. It’s a Catch 22 it seems to me. I suppose we have to concentrate on the things that matter — like “kidlet.”

      • he he, yes!! focus on the kidlet indeed. that made me smile, thank you!!

        while I know that there is no perfect place to live…..it’s stuff like this that cement my desire to leave this country of my birth. so many things frustrate me, not the least of which is how the rich control our country. It makes me sad. but you’re right, focusing on positive things and looking to the future do help. Things like wind energy and the like that I was just reminded about on the blog(musings of an old fart) that brought me to this post 🙂 Interesting stuff out there in the blogosphere!

  4. Likewise Hugh. Many thanks and I have been corresponding with Tobyo this am. I am delighted she is reading and commenting. Hugh, I actually suggested a reporter friend take a look at your post, as it truly will knock people’s socks off. Tobyo, when you do leave to travel, please come back. We need people like you. This country is a great place and great things happen here, but we are definitely not perfect and unfortunately our warts get more press, Happy Friday.

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