Sixty of us gathered recently in a Chicago church basement for a program about the precarious U.S. economy. For almost two hours, we sat on clanky metal chairs discussing rising gas and food prices, home foreclosures, declining wages, increasing personal debt, and our fears for the future. Everyone knew the story: The economy is squeezing low-wage workers and pushing once-secure middle-class households into deep distress.
The discussion turned to solutions: living wage laws, expanded unionization, and increasing security and opportunity through low-cost college, matching savings programs, and assistance to first-time homebuyers. Then a woman wearing a colorful shawl commented that the problem was deeper, that “the wealthiest 1 percent now had a greater share of the nation’s wealth—and yet were paying less taxes.”
A young man in a Chicago Cubs baseball cap responded, “All this talk about the rich getting richer is a distraction. The key is to help everyone have the same opportunities. We shouldn’t be attacking the wealthy, especially with all the generous donations to charity.”
A lively exchange ensued. Can we reduce poverty, the group debated, without addressing inequality? Is the common good undermined by vast wealth concentrated in a few hands? Can we reduce unequal wealth without demonizing “rich people”? All good questions. All need answers—because our nation’s extreme inequality has become too staggering to go unexamined.
Most of the wealth and income gains of the last three decades, economists tell us, have flowed up to the wealthiest 1 percent of households, those with more than $5 million in assets. And within that affluent group, most gains have gone to the tiptop of the wealth pyramid, the 100,000 households that comprise our richest one-tenth of 1 percent. Last year, 7,500 households in the U.S. actually had annual incomes over $20 million.