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Commentary

Researchers Lawrence Mishel and Alyssa Davis at the Economic Policy Institute released some pretty amazing new numbers today on the growth in American CEO pay over the last few decades:

“Over the last several decades, inflation-adjusted CEO compensation increased from $1.5 million in 1978 to $16.3 million in 2014, or 997 percent, a rise almost double stock market growth. Over the same time period, a typical worker’s wages grew very little: the annual compensation, adjusted for inflation, of the average private-sector production and nonsupervisory worker (comprising 82 percent of total payroll employment) rose from $48,000 in 1978 to just $53,200 in 2014, an increase of only 10.9 percent. Due to this unequal growth, average top CEOs now make over 300 times what typical workers earn.

Although corporations are posting record-high profits and the stock market is booming, the wages of most workers remain stagnant, indicating they are not participating equally in prosperity. Meanwhile, CEO compensation continues to rise even faster than the stock market.

In order to curtail the growth of CEO pay, we need to implement higher marginal income tax rates and promote rules such as “say on pay.” At the same time, we need to implement an agenda that promotes broad-based wage growth so typical workers can share more widely in our economic growth.”

Ah…the genius of the free market.

Click here to see their data in the form of some powerful graphics.

Commentary

Be sure to check out Chris Fitzsimon’s “Monday Numbers” column this morning. It will quickly disabuse you of any notion that North Carolina’s hard turn to the political right has been helpful to the state’s key indicators of success. For instance:

1.1 billion—amount in dollars of the latest estimate of cost of the 2013 tax plan in the 2014-2015 fiscal year by the Institute on Taxation and Economic Policy (Ibid)

66—percentage of tax cut passed by the 2013 General Assembly that will go to the wealthiest one percent of North Carolinians (“Final tax plan pits at risk what makes North Carolina great,” N.C. Budget & Tax Center, August, 2013)

940,000—amount in dollars of annual income of wealthiest one percent of North Carolinians (Ibid)

14.5—percentage reduction in per pupil spending in North Carolina from 2007-2008 to 2014-2015 when adjusted for inflation (“Most States Still Funding Schools Less Than Before the Recession,” Center on Budget and Policy Priorities, October 16, 2014)

Read the entire column by clicking here.

Commentary

The maddening data on wealth inequality in America have now gotten so ridiculously out of hand that the headline for this post really does sum up what ought to be the single, defining issue in today’s election. For confirmation, check out the following amazing graphic from the good people at Inequality.org.

Wealth inequality

Commentary

In case you missed it, the Associated Press is reporting new and disturbing news (click here to see the article in the Greensboro News & Record) about the impact that the nation’s mushrooming economic divide between the rich and everyone else is having on education:

Education is supposed to help bridge the gap between the wealthiest people and everyone else. Ask the experts, and they’ll count the ways:

Preschool can lift children from poverty. Top high schools prepare students for college. A college degree boosts pay over a lifetime. And the U.S. economy would grow faster if more people stayed in school longer.

Plenty of data back them up. But the data also show something else:

Wealthier parents have been stepping up education spending so aggressively that they’re widening the nation’s wealth gap. When the Great Recession struck in late 2007 and squeezed most family budgets, the top 10 percent of earners — with incomes averaging $253,146 — went in a different direction: They doubled down on their kids’ futures.

Their average education spending per child jumped 35 percent to $5,210 a year during the recession compared with the two preceding years — and they sustained that faster pace through the recovery. For the remaining 90 percent of households, such spending averaged around a flat $1,000, according to research by Emory University sociologist Sabino Kornrich.

“People at the top just have so much income now that they’re easily able to spend more on their kids,” Kornrich said.

The article continues:

The disparity in spending patterns creates a hurdle for reducing income inequality through additional education — the preferred solution of many economists.

Thomas Piketty, the French economist whose exploration of tax data helped expose the wealth gap, has argued that education “is the most powerful equalizing force in the long run.”

In short, the article provides a sobering confirmation of what critics have long been saying about the conservative movement’s successful, decades-long campaign to disinvest in and privatize our public education system — namely, that it’s expediting the demise of our middle class society.

Commentary

The fallout from our nation’s decades-long effort to slash taxes on wealthy individuals and profitable corporations (and the public structures those taxes once provided) continues to spread. The Washington Post reports that the growing gap between the super rich and everyone else is directly and negatively impacting state government budgets:

Income inequality is taking a toll on state governments.

The widening gap between the wealthiest Americans and everyone else has been matched by a slowdown in state tax revenue, according to a report being released Monday by Standard & Poor’s.

Even as income has accelerated for the affluent, it has barely kept pace with inflation for most other people. That trend can mean a double whammy for states: The wealthy often manage to shield much of their income from taxes. And they tend to spend less of it than others do, thereby limiting sales tax revenue….

Rising income inequality is not just a social issue,” said Gabriel Petek, the S&P credit analyst who wrote the report. “It presents a very significant set of challenges for the policymakers.”

Stagnant pay for most people has compounded the pressure on states to preserve funding for education, highways and social programs such as Medicaid. The investments in education and infrastructure also have fueled economic growth. Yet they’re at risk without a strong flow of tax revenue.

Meanwhile, this week’s most stunning visual of the nation’s mushrooming inequality comes from the U.S. Federal Reserve, courtesy of the good people at Too Much Online: Read More