The 0.001 Percent
America’s Billionaires: Let Them Eat Food Stamps
Forbes published its annual billionaire list, whose ranks continue to grow even as the American middle and working classes are poorer than ever thanks to stagnating worker wages.
There are a record number of women on the Forbes billionaire list this year — 172 or a 25 percent increase from last year. But that’s about the only good news to be found there. Otherwise, the ranks of the Forbes list—which continues to grow astronomically bigger both in terms of the numbers of members and their total net worth—stands in stark contrast to the decline in the middle class in America and worldwide and the persistent, deepening scourge of poverty.
After all, in January Forbes (and others) reported on the fact that 85 of the richest people in the world—in other words, numbers one through 85 on the Forbes billionaire list—control as much wealth as the bottom 3.5 billion of the world’s population. To put that in different terms, the entire bottom half of the world’s population, combined, control the same amount of wealth as the top 85 billionaires.
Overall, half of the world’s wealth is owned by just one percent of the population. And yes, that inequality is worse than it once was. Again, according to Forbes citing a study by Oxfam, seven out of 10 people worldwide live in countries where economic inequality has increased in the last 30 years. That inequality has grown most severely in the United States.
This isn’t an accident. In the United States, economic policy has contributed to the widening gap between the very rich and everyone else. Tax cuts that disproportionately benefit the rich, especially cuts in the capital gains tax, exacerbated economic inequality in recent years. And so, while in the 1970s the top one percent of Americans accounted for less than 10 percent of the nation’s income, today they make nearly 25 percent of total income in the United States. Between 1980 and 2005, “more than 80 percent of the total increase in American’s income went to the top 1 percent.”
The recent recession only made matters worse. Of the economic growth during recovery, 88 percent has gone to corporate profits while only one percent has gone to worker wages.
It’s no surprise then that the United States has at least three times more billionaires on the Forbes list than any other country. But make no mistake, that’s not necessarily a reflection of the United States leading the globe on corporate innovation and ingenuity. We have rigged the rules of the game in the United States to disproportionately benefit the rich and the super-rich— and we are exporting that rigged system around the globe.
Consider, for example, the Waltons—who occupy four of the top 20 slots on the 2014 Forbes billionaire list. Their wealth came from a global retail model that pays its average sales associates —or, at 34 hours per week (Walmart’s full-time status) amounts to just $15,576 per year, far below the 2010 federal poverty level of $22,050 for a family of four. Workers in the Walmart global supply chain are paid even worse. Meanwhile, the Walton family business has systematically destroyed mom and pop stores and solid, middle-class jobs all across the United States. One study found that for every new retail job created by Walmart in a community, 1.4 jobs are lost as other businesses shrink or shut down and every time a new Walmart opens, a county’s total retail payroll is reduced by an average of $1.2 million. The Waltons made their fortune by destroying middle-class America and, increasingly, the globe.
If the minimum wage in the United States had kept pace with the rising incomes of the top one percent, it would now be $22.62 an hour instead of $7.25 an hour. Instead, big businesses (like, ahem, Wal-mart) are opposing even the slightest increase in the minimum wage at the federal level or anywhere else for that matter. In the United States and around the world, the rich have been getting richer and richer and richer but not only has that largesse failed build a bridge of opportunity across the gulf between the rich and poor it has simply, sadly made that gulf worse.
There’s nothing wrong with wealth. There is nothing wrong with having billionaires. But there is something wrong with an economic system that creates more and more billionaires while wages and wealth for everyone else in society stagnates or declines.