NO ADVERTISING, GOVERNMENT OR CORPORATE FUNDING

  • Latest News
  • Pitch a Story
  • Work with a Journalist
  • Join the Blog Squad
  • Afghanistan
  • Africa
  • Asia
  • Baltimore
  • Canada
  • Egypt
  • Europe
  • Latin America
  • Middle East
  • Russia
  • Economy
  • Environment
  • Health Care
  • Military
  • Occupy
  • Organize This
  • Reality Asserts Itself
  • US Politics


  • Unprecedented Inequality: The Top 1 Percent Captured 95% of the Income Gains Since 2009


    Salvatore Babones: The economy is growing, but most workers are left behind -   October 3, 14
    Members don't see ads. If you are a member, and you're seeing this appeal, click here

    Audio

    Share to Facebook Share to Twitter



    I support the real news because they deal with real issues, not meaningless articles and sound bites - Gary
    Log in and tell us why you support TRNN

    Bio

    Dr.Salvatore Babones is the author or editor of eight books and more than two dozen academic research articles. His academic research focuses on income inequality, economic development, and statistical methods for comparative social science research. He writes a weekly column for the Inequality.org website and contributes to progressive websites and newsletters across America.

    Transcript

    Unprecedented Inequality: The Top 1 Percent Captured 95% of the Income Gains Since 2009JAISAL NOOR, TRNN PRODUCER: Welcome to The Real News Network. I'm Jaisal Noor in Baltimore.

    Since the early '80s, recoveries have become progressively unequal. During the '90s expansion, 45 percent of income gains went to the top 1 percent. During the Bush economy, the top 1 percent increased their income share to 65 percent. And in the current recovery, the top 1 percent have managed to capture the entirety of income growth.

    Now joining us to discuss this is Dr. Salvatore Babones. He's the author or editor of eight books and more than two dozen academic research titles. His academic research focuses on income inequality, economic development, and statistical methods for comparative social science research. He writes a weekly column for Inequality.org and contributes to progressive websites and newsletters across America.

    Thank you so much for joining us.

    DR. SALVATORE BABONES, UNIVERSITY OF SYDNEY: Thanks for having me on the program.

    NOOR: So what can you tell us about this new number that's come out about how in the current economic recovery the 1 percent has enjoyed the vast amount of income gained?

    BABONES: Well, really all I can tell you is that it's nothing new. It's part of a process that's been going on really since the early 1970s.

    NOOR: And, Salvatore, what's the significance that this inequality gap is increasing?

    BABONES: Well, the inequality gap has been increasing over time since the early 1970s. At first, it was really the top 20 or 25 percent who were pulling away from the rest of the population. By the early 1990s, it was only the top 10 percent. And since the late 1990s, it's really been only a tiny sliver of the population, the top 1 percent, who've gained pretty much all of the gains that have occurred in the U.S. economy.

    NOOR: We often hear that income inequality is caused by desirable things like productivity, innovation, trade, education, thus we can't do much about it without undermining the overall economy. Do you agree with this? And if not, what do you think are the principal factors responsible for this acceleration of inequality?

    BABONES: No, I think that explanation is entirely false, and I think's history shows us that that's the case. All through the late 19th century and early 20th century, the invention of the automobile, the telephone in the postwar era, with, you know, the invention of the modern world of the 1950s, '60s, and '70s, there was declining inequality over time. Ordinary people made enormous income gains between the 1870s and the 1970s. My own research shows that ordinary people's income grew at about 2 percent per year between the 1870s and the 1970s and grew 0 percent per year from the 1970s through the 2010s. So certainly the two are not necessarily connected.

    NOOR: And how much are government policies responsible for this?

    BABONES: Oh, I'd say it's all been a shift in government policies. Since the early 1970s, beginning with actually major tax cuts in the beginning in the '60s and really picking up steam in the '70s under Nixon and then Reagan in the '80s have led to a massive shift in income in America from the the poor to the rich. But it hasn't just been income tax reductions. It's also been changes in the way income is distributed before taxes--the decline of unions, which didn't just happen because something went wrong with unions. It happened because of changes in government policy that made it more difficult to unionize and that encouraged employers not to negotiate with unions.

    NOOR: And, finally, what can we do to help reverse this trend?

    BABONES: Oh, there's lots we can do. I think the rising inequality has been driven by government policy and it can be driven back by government policy. We really need, you know, a three-pronged approach. One is to simply raise taxes on [incompr.] incomes back to their historical levels. Higher taxes mean that even if they make high incomes, we'll be able to claw back some of that for the good of society. Second, we need government spending in ways that benefit ordinary people, so government spending on schools and education, government spending on hospitals, government spending in general to create jobs in our economy. And there--the government can change the regulatory environment. The regulatory environment of the last 30 or 40 years has made it very difficult to unionize, has led to very low minimum wages, has let corporations do whatever they want, essentially. If we reregulate the economy, we can claw back some of this dramatic increase in inequality over the last 30 years.

    NOOR: So what do you think is the most important thing for people to know about these new figures that have just been released?

    BABONES: One really interesting factor is that the rising inequality today is nothing new. It's been going on for a long time. But during the last Great Depression in the 1930s, income inequality actually declined. The income share of the richest 1 percent went down, not up, through the 1930s. And at the same time their incomes were going down, their taxes were going up quite dramatically, up to a maximum of close to 99 percent. In the current recession, the incomes of the very rich have only gone up, not down, and at the same time their taxes have remained stable with a just tiny blip up in 2013.

    NOOR: Salvatore Babones, thank you so much for joining us.

    BABONES: Thanks for having me on.

    NOOR: Thank you for joining us on The Real News Network.

    End

    DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.


    Comments

    Our automatic spam filter blocks comments with multiple links and multiple users using the same IP address. Please make thoughtful comments with minimal links using only one user name. If you think your comment has been mistakenly removed please email us at contact@therealnews.com

    Comments


    Latest Stories


    Did Iran Take Uranium Shipment Off the Table as a Negotiating Tactic?
    Former IAEA Director: NYT Article a Malicious Attempt to Undermine Iran Negotiations
    The Pain Doesn't Go Away - Rachel Corrie's Parents on Reality Asserts Itself (3/3)
    Are the CO2 Emissions Reduction Targets Enough to Stop Climate Catastrophe?
    Bush, The Iraq War, and Torture: From Assessment to Accountability
    U.S. Policy in Afghanistan Created Hundreds of Little Dictators
    The Fight for Fair Housing for Baltimore Renters
    TRNN Replay: Identity and Collective Denial - Lia Tarachansky on Reality Asserts Itself (1/3)
    The Pain Doesn't Go Away - Rachel Corrie's Parents on Reality Asserts Itself (2/3)
    No End in Sight for America's Longest War
    The Republican Budget vs. The People's Budget
    Baltimore Prosecutor Reviewing Evidence in Death of Activist
    The Global African: Ferguson, Iran, & Urban Development Pt. 2
    Only Appropriate Public Event for Bush is War Crimes Trial
    How Yemen Became the Latest Iranian-Saudi Arabian Proxy War
    Bankers Avoid Jail Time in Tax-Evasion Case
    Bush Administration Official Defends Iraq War at Conference
    The Pain Doesn't Go Away - Rachel Corrie's Parents on Reality Asserts Itself (1/3)
    Saudi Arabia Attacks Yemen, Targeting Houthis
    Nigerians Head to the Polls Amid Rising Tensions
    Greek Public Coffers Expected to Run Dry Next Month
    Resistance Mounts to Stephen Harper's Secret Police Bill
    Why is U.S. Voter Turnout So Low?
    TRNN Replay: The Roots of Nigeria's Chaos
    TRNN Replay: 9/11 not an "Intelligence Failure"
    Regional Banks Say Regulation Costs Too High
    New Bill Threatens Patient Safety
    What is Behind the Collapse of the Centre Left Parties in Europe?
    What is Causing the Rapid Decline of the US Coal Industry?
    Hofstra University Conference Considers Legacy of Second Bush Presidency

    RealNewsNetwork.com, Real News Network, Real News, Real News For Real People, IWT are trademarks and service marks of IWT.TV inc. "The Real News" is the flagship show of IWT and Real News Network.

    All original content on this site is copyright of The Real News Network.  Click here for more

    Problems with this site? Please let us know

    Linux VPS Hosting by Star Dot Hosting