Incomes have risen, but the income gap continues to grow rapidly. The majority of the population has derived nothing from the income raises.
Those up there on Wall Street continue to make themselves richer, while the majority of the population is battered by the crisis. This feeling that drives many of the protesters in New York and other U.S. cities does not deceive. The U.S. is a land of inequality — and the inequality is growing by leaps and bounds.
Only at first look does the development appear quite good. Before the outbreak of the financial crisis, from 2006 to 2007, incomes rose a steady 3.7 percent. Yet, that is just the average. In reality the increases for the most part went to those who were at the very top of the income ladder.
To CEOs, for example, whose salaries are 185 times that of an average worker’s wages. The top 1 percent of households saw a rise of almost 7 percent and so received 24 percent of the total earned income of Americans.
Even among the highest earners, however, only a small group made large profits. More than 6 percent of total income went to the top 0.01 percent — 15,000 households with a yearly income of over US$11 million. Even in 1928, when inequality had seemingly reached a high point, it had only been 5 percent.
U.S. economist and Nobel Prize winner Paul Krugman warned years ago about conditions like those in the 1920s, which are known in the U.S. as the “Gilded Age,” a golden age. In The New York Times Magazine, he reports that he marveled at the gigantic villas as a teenager on Long Island and imagined the riches that one would need just for the necessary host of servants.
The Gilded Age ended famously with the crash of 1929 and the subsequent world economic crisis. Not until the 1990s and the real estate boom that followed the dot-com crash did the U.S. achieve a new Gilded Age — one that again ended in crisis. A further parallel: In the ‘20s there was also a radicalized protest movement with Nicola Sacco and Bartolomeo Vanzetti as well-known representatives.
Partly as a consequence of the high incomes at the top, economic circumstances continue to drift further apart. 34.6 percent of the total wealth of American private households — money, stocks, houses — is solely concentrated on the richest one-hundredth of the population. While only 27 percent of the total wealth is allotted to the bottom 90 percent of Americans, the upper 10 percent have over 73 percent at their disposal, according to the Washington Institute for Policy Studies. In Germany, by contrast, it is “only” 61 percent of the wealth.
The newest available data nevertheless comes from the year 2007. Since then, the real estate bubble bursting might well have further sapped the resources of the less-well-to-do, whose only wealth often consists of a private residence.
Those are the parents of the ones who now camp on Liberty Plaza. The super rich, on the other hand, have been able to strongly increase their wealth after a short crisis-induced drop in 2009 — that comes from worldwide data of consultant firm Capgemini and investment bank Merrill Lynch.