The Occupy Wall Street protests are growing. Major media outlets are beginning to carry the story. Videos of alleged police brutality are all over Youtube.
But what in the world is this movement about?
No one seems to really know.
When the protesters are asked, you hear everything from the unemployment rate to the Federal deficit to big banker bonuses and on and on. But none of these get to the root of the problem.
Between 1917 and 2008 the average income in the U.S. grew by $38,216 when adjusted for inflation.
Roughly half of those gains went to the bottom 90% while the top 10% took the rest.
Okay. So that’s a bit unfair.
But wait. Let’s break it down even further…
Between 1917 and 1978, the top 10% only received 29% of that growth.
So that means….
Since 1978, the average income grew by $10,886…but 100% of the growth went to the richest 10%! Income for the bottom 90% actually has declined!
Corporate profits are at an all time high!
No wonder so many people are upset.
Let me throw in one more chart for good measure:
Starting to get the picture here?
The vast majority of America is getting fed up with how the gap between the middle and upper class continues to widen.
This is the primary reason that we seem to be having such a difficult time shaking off this recession. All of the money is stuck at the top of the financial food chain.
Where do you stand on the issue? Is America on the right track or are these protesters right to blame our financial problems on Wall Street?
Jeremy, this is incredibly accurate. I’m currently an undergraduate Econ student so I read A TON about this exact same junk scenario. I think a large part of the problem is our overwhelmingly complex tax system that provides egregious loopholes for corporate America while failing to create actually incentive based systems for small business, which further buries the economy while cheating average middle class Americans.
What do you think?
Nice post, man. I appreciated your insight.
Hey Peter – There’s no doubt that the the tax system adds to the burden. It’s become such a tangled mess that I don’t know if we will ever see a system that really works, especially considering the millions spent on lobbyists each year. It’s going to take a sweeping change in politics before we get a tax code that makes sense.
Excellent work. It’s so sad that our tax system is so complicated… it is an unnecessary burden on the average individual.
It’s hard to really make a stand on this issue without first obtaining more information about the cause of the financial discrepancy. You mentioned why people are upset, but I would like to know how America got to this place. What systems, policies, and laws were in place or out of place that allowed for such a gap in the the distribution of economic gain. If profits are increasing (which I’m sure is not the case for every company especially with all of the lay offs and cut backs that are taking place), how is it that companies are managing to increase salaries for CEO’s and upper level employees, but decrease the salaries for lower salaried employees. This is an indication that proper laws and policies are not currently in place to protect employees. Perhaps America should consider implementing a floor to certain salaries and figure out a way to equally distribute wealth. The unfortunate reality is that there is a greater issue at hand…GREED. This goes much deeper than a company’s corporate structure, but is rooted in the heart of those who are in leadership.
The mess we’re in today is extremely complicated. I’m sure there are hundreds of political and economic factors you could point to that have led us here over the last 30 years. Like you mention, though, greed plays a big part. For example, there is one company I have extensive insider knowledge of that is about to tank. They’re having serious financial problems. You know what they did last year? Cut salaries, laid off people and then 3 months later gave the CEO and CFO a raise.
Even with all of the problems we have right now, I don’t think the government needs to step in and help distribute wealth. That’s socialism. I’m not even going to get into all of the problems with heading down that path. I prefer to let the market correct itself. If you look back at the beginning of the 20th century you would see an economy similar to today’s. Then the great depression hit. Less than 20 years later, America entered one of the most prosperous times in it’s history.
I couldn’t agree more Jeremy. The government can barely run bath water…let alone a wealth distribution process. There has to be a way to prevent situations like you described above from happening. Firing valuable employees just so executives can get a raise is both unethical and negatively impacts the economy. My fear is that if certain companies aren’t held accountable, then they will continue to pursue greed at the expense of struggling employees.
Interest rates are at an all time low. Low enough that even people with a great interest rate are thinking...