Tag: Wealth Gap

Accordingly to an article entitled, “More Women Are bringing Home the Bacon…, ”  heralding women’s gains in pay equity, a recent Pew study revealed that an  impressive number of married breadwinner moms reflects society’s increasing opportunities for women, while the median income for the growing population of  single mother households  is $23,000 — just 28 percent of the income of one in which the female breadwinner is married, and less than half the median household income in America.

So What Else Is New?

The wage gap between women’s and men’s individual wages is the most standard indicator used to define women’s march toward equality. In recent studies of the gender wage gap, women make between 76 to 78 cents for every dollar made by men and most literature is optimistic that the gap will disappear or even reverse in  the near future. The gender wealth gap, however, another measure of gender inequality which measures the total wealth or net worth a woman has accumulated over time,  shows that women have, on average, only 6% to 36% of the wealth owned by men and that the gap is growing.



source:http://www.cunapfi.org/download/198_Women_of_Color_Wealth_Future_Spring_2010.pdf

The stark difference between these two measures suggests two things about statistics:1) statistics on the same subject can fluctuation wildly depending on what is being measured and the methodology used and 2) One of the main functions of statistics is not to measure the reality, but as a propaganda tool to reinforce the ideology of the dominant culture.

The problem with using the wage gap . As a measure of inequality, the gender wage gap only measures an individual’s income growth in the market place and does not take into account either the worth of women’s unpaid social labor in the home(outside the marketplace) or how this unpaid labor structurally effects women’s position in the market place over time.

Because of its narrow parameter, much of the analysis of what the wage gap means in terms of the overall inequality of men versus women is merely a guess that allows for a lot of unverifiable  interpretations. For example, the recent Pew study echoes a demographic study that hit the New York Times a couple of years ago that showed  a narrowing of the wage gap, suggesting women’s wages were even surpassing men’s in some cases, especially in major cities.

The cause of women’s increased equality, the researcher suggested, was due to  increases in women’s higher educational status and increased  “feminist  consciousness.” In fact,  a closer analysis showed that the close in the wage gap was due to the outsourcing of  well paying union manufacturing jobs which had been held by men due to a sex segregated workforce. By focusing on city populations where people of color form a larger part of the database, the lower gap also reflected the fact that the wage gap is generally lower between women and men of color since men of color generally make significantly less than white men due to racism.  

Paul Krugman wrote about the human tragedy of the economic policy failures of the Obama administration which has prioritized deficit reduction over putting people back to work. The impact of those failures can be seen in New York City where, as reported in the New York Times, the racial wealth gap has widen since the recession:

The Urban Institute study found that the racial wealth gap yawned during the recession, even as the income gap between white Americans and nonwhite Americans remained stable. As of 2010, white families, on average, earned about $2 for every $1 that black and Hispanic families earned, a ratio that has remained roughly constant for the last 30 years. But when it comes to wealth – as measured by assets, like cash savings, homes and retirement accounts, minus debts, like mortgages and credit card balances – white families have far outpaced black and Hispanic ones. Before the recession, non-Hispanic white families, on average, were about four times as wealthy as nonwhite families, according to the Urban Institute’s analysis of Federal Reserve data. By 2010, whites were about six times as wealthy.

   The dollar value of that gap has grown, as well. By the most recent data, the average white family had about $632,000 in wealth, versus $98,000 for black families and $110,000 for Hispanic families.

The two factors that contributed to the gap were the housing downturn and loss of retirement savings that hit black families the hardest due a number of elements: predatory lending in minority neighborhoods; a higher proportion of their wealth invested in the home; higher unemployment rates and lower incomes among blacks; and the need to borrow out of retirement finds in a depressed market, “leaving them out in the cold as the market recovered.”

An article written by the editors of The Nation pointed out this chilling fact:

Here is New York in 2013: a city of dazzling resurrection and official neglect, remarkable wealth and even more remarkable inequality. Despite the popular narrative of a city reborn-after the fiscal crisis of the ’70s, the crack epidemic of the ’80s, the terrorist attack of 2001, the superstorm of 2012-the extraordinary triumph of New York’s existence is tempered by the outrage of that inequality. Here, one of the country’s poorest congressional districts, primarily in the South Bronx, sits less than a mile from one of its wealthiest, which includes Manhattan’s Upper East Side. And here, a billionaire mayor presides over a homelessness crisis so massive that 50,000 men, women and children sleep in shelters each night. More New Yorkers are homeless these days than at any time since the Great Depression.

The numbers tell the story. Between 2000 and 2010, the median income of the city’s eight wealthiest neighborhoods jumped 55 percent, according to the Fiscal Policy Institute. Meanwhile, as the cushy precincts got even cushier, median income dipped 3 percent in middle-income areas and 0.2 percent in the poorest neighborhoods. [..]

The money pouring in at the top of the income brackets has simply pooled there, without trickling down to the bottom or even the middle. This great pooling has occurred as median wages have fallen, the cost of living has increased, and the poverty rate has risen to 21 percent-as high as it was in 1980. As a result, America’s most iconic city now has the same inequality index as Swaziland.

The article goes on to say that this isn’t entirely NYC’s fault with the economic shift over the last thirty years to finance but it also pointed out that Mayor Michael Bloomberg’s policies were a largely contributed to the problem.

[..]  the stewards of New York City-its mayor, legislators and other influencers-could have made choices to counter this trend: “New York City’s government is significant enough in its breadth…that the policy tools exist and the wherewithal exists to do something at the margins to lessen inequality.” The choices, however, that might have corrected some of the skew-within education, economic development, labor rights, poverty policy, budgeting-have largely been ignored in favor of creating a very different model of metropolis. [..]

Bloomberg himself expressed this vision in a March 2012 piece in the Financial Times bearing the title “Cities Must Be Cool, Creative and In Control,” in which he wrote:

For cities to have sustained success, they must compete for the grand prize: intellectual capital and talent.

I have long believed that talent attracts capital far more effectively and consistently than capital attracts talent. The most creative individuals want to live in places that protect personal freedoms, prize diversity and offer an abundance of cultural opportunities.

Then he added, “Economists may not say it this way but the truth of the matter is: being cool counts.” [..]

In essence, Bloomberg’s is a vision of the city forged primarily around the care and feeding of thought leaders, professionals and strivers-with little concern, and sometimes active contempt, for the ones who do the care and feeding. (In 2011, 400,000 New York workers, many of whom toil in service sector jobs, were not paid enough to hoist themselves out of poverty.) This is a fundamentally two-tier style of urbanism, one in which a cool, creative and well-managed metropolis glitters like something lovely, its radiance drawing attention away from the dimmed surroundings.

Yves Smith at naked capitalism observes:

But you can see more signs of stress even in the more insulated parts of New York City. Retail vacancies are up, even on the well-trafficked shopping streets, the worst since the post-2009 period. More restaurants seem to be taking a hit too, which suggests that non-expense-account diners are cutting back. And if ZIRP-supported NYC is looking a bit less robust, how well can the rest of the country be faring?

h/t to Yves for the video

The rich get richer and the poor get poorer, but ain’t we got fun?

The Pew Research Center published its report on the widening wealth gap between Whites, Blacks and Hispanics. It’s not a very good picture.

The median wealth of white households is 20 times that of black households and 18 times that of Hispanic households, according to a Pew Research Center analysis of newly available government data from 2009.

These lopsided wealth ratios are the largest since the government began publishing such data a quarter century ago and roughly twice the size of the ratios that had prevailed between these three groups for the two decades prior to the Great Recession that ended in 2009.

The Pew Research analysis finds that, in percentage terms, the bursting of the housing market bubble in 2006 and the recession that followed from late 2007 to mid-2009 took a far greater toll on the wealth of minorities than whites. From 2005 to 2009, inflation-adjusted median wealth fell by 66% among Hispanic households and 53% among black households, compared with just 16% among white households.

The collapse of the housing market and home values were the main cause hitting Hispanics worse that any other demographic for two main reasons, where their money was invested and geographics:

Nearly two-thirds of Hispanics’ median net worth in 2005 came from home equity, according to the report, and when the housing market collapsed, so did their wealth. Median home equity for Hispanics fell by 51 percent in the period of the survey. The drop was compounded by the fact that Hispanics tended to live in the places that were hit hardest in the recession, like Florida and California, the report said.

Dr. Thomas Shapiro, the Pokross professor of law and social policy at Brandeis University on The Rachel Maddow Show, discussed with guest host Melissa Harris-Perry the racial legacy of the wealth gap.

Meteor Blades at Daily Kos pointed this out in his article

While the recession worsened the wealth gap, the trend has been headed in that direction for a long time. A study conducted in 2007 by the Institute on Assets and Social Policy found that middle-income whites had less wealth than high-income African Americans in 1984, but by 2007 they had accumulated four times as much wealth. Tom Shapiro noted that this period coincided with lower tax rates for more affluent Americans. That has been one of the main contributors to the wealth and income inequality that now plagues the United States in a ratio that is-or should be-more akin to banana republics than mature industrialized nations.

Currently 1 percent of the population owns 40 percent of the wealth and 25 percent owns 87 percent. During the so-called “recovery” from the recession, which officially ended 25 months ago, 88 percent of the rise in income has been captured by corporate profits, while only 1 percent has gone to wage-and-salary earners. That kind of income disparity adds to the gap in a country where wealth is already distributed more unequally than anywhere else in the developed world.

Given the attitude toward cutting taxes on “job creators” now prevalent in Washington, there’s every reason to believe this situation will worsen.

(emphasis mine)

We are now just waiting for the ground at the bottom of the cliff we have already driven off.