US inequality gap hits record high

 by Richard Mellor
Afscme local 444, retired

The inequality gap in the US reached a record high in 2012 according to a recent BBC report.

According to the report, the top 1% of US earners received 19.3% of household income surpassing the previous record set in 1927.  Overall, the pre tax incomes of the top 1% rose 19.3% in 2012 compared to a 1% increase for the rest of us, with the top 10% of all households taking almost half of the national income.

USA Today reported yesterday that according to an AP study, four out of five US adults, “..struggle with joblessness, near poverty, or reliance on welfare for at least part of their lives…”  The situation among white workers is deteriorating as well as they face increased economic insecurity, and pessimism among this group is at its highest in 25 years with 63% of whites regarding the economic situation as “poor”. More than 19 million whites fall below the US poverty line of $23,021 the report claims, that’s 41% of the country’s poor.  This is double the number of blacks for obvious reasons as there are more of them. 

Percentage wise the poverty rate among blacks is much higher: “By race, nonwhites still have a higher risk of being economically insecure, at 90 percent.”, the report states,  “But compared with the official poverty rate, some of the biggest jumps under the newer measure are among whites, with more than 76% enduring periods of joblessness, life on welfare or near-poverty.”

"Poverty is no longer an issue of 'them', it's an issue of 'us'," says Mark Rank, one of the authors of the study. This is of great concern to the ruling class as we outnumber them and it is their ability to provide a significant portion of the population with higher living standards (whites) and opportunity that helps them maintain dominance of economic and political life.  Nationalism, racism, sexism (women still earn 77 cents to a man’s dollar) and other divide and rule tactics are less effective the more people fall by the wayside as capitalism sinks deeper in to crisis.

This is far from the optimistic, I’ll say Jubilant, tone after the collapse of the evil Soviet empire in 1989 when the Wall Street Journal announced that “We Won” and that finally history had come to understand how the world really works. Full Spectrum Dominance was the mantra as US capital was now free to travel the globe, to go where it wanted and when, unhindered by unions, nation states or resistance movements, protected as it is by US military might.

But 95% of all income gains in the last three years have gone to the richest 1% of Americans the BBC report states and this also contributes to the anger and hatred of the rich that exists beneath the surface of US society. The predatory wars on behalf of US corporations have to be financed and the unelected rulers of society ensure that it is workers and the middle class that pay, which is why we see the declining living standards described here.

The US bosses are well aware of the dangers that increased poverty across broader sections of the US population brings.  They are very concerned about social unrest which has led to increased domestic repression and the beefing up of state security forces as I pointed out in an earlier piece.  The situation will worsen and the years ahead will see some serious and protracted battles domestically as Americans are forced to fight back.  A cursory glance at US history and our labor history will remind us of the violent nature of the US state apparatus and the 1% will reveal just how ruthless they are as the working class offensive takes shape.

Despite the shifting of the industrial working class from the US and Europe to Asia and the huge movements against global capitalism that have arisen in Latin America, global capitalism cannot be cast in to the history books without the US working class settling accounts with the US ruling class, the most powerful and heavily armed of the global bourgeois.

The power of the US mass media is a force to be reckoned with as it penetrates every aspect of our lives.  It’s aim is to confuse, to lie to present the world not as it really is but as they would like it.  They sow division in order to weaken and prevent the unity of the working class.  The use of mindless media and sports without end is aimed to numb the mind, “I wish my co-workers could get as fired up about what’s happening at work as they do about sports.”, a young worker said to me recently.  There are a lot of sideshows, but in the last analysis, consciousness has a material base, objective reality reigns, and the traditions of the American working class will emerge with force as workers see no alternative but to fight.  Workers know it means a fight and we always seek the line of least resistance but the bosses won’t let up. 

On a final note, Peter Phillips and Brady Osborne, two Sonoma State University professors, have an interesting piece about the global capitalist class and its composition, the Transnational Capitalist Class. They point out that a “group of 161 individuals represents the financial core of the world’s transnational capitalist class. They collectively manage $23.91 trillion in funds and operate in nearly every country in the world.”

It is worth a read and is at Michel Chossudovsky’s site the Centre for Research on Globalization