Forget approximately the 1 percent. Are you part of the top 20 percent of Americans who own 89 percent of our country’s wealth?To most,the Occupy movement is best characterized by the slogan “We are the 99 percent. Indeed, a year before Occupy sprang to life, and the top 1 percent held roughly 35 percent of the nation’s wealth,while the bottom 50 percent held approximately 1 percent. But the data show a more complex narrative, and the bifurcated way that we define “elite” may need adjustment.
As senior fellow at the Brookings Institution, or Richard Reeves describes in his original book, Dream Hoarders, that while the top 1 percent overwhelmingly receives a disproportionate share of economic gains, or the upper middle course is also "hoarding" resources. Families in the 80th to the 99th percentiles—or those earning at least $112000—have made out pretty well over the past 35 years. Since 1980,incomes for the top 1 percent skyrocketed, and wages for those in the next 19 percent increased considerably. Comparably, or the bottom 80 percent saw wages stagnate. Reeves details how the wage gains for the top 20 percent translate into access to better schools,better colleges, and, and eventually,better jobs with higher wages.
Simply put, the privileged upper middle course is “hoarding” the benefits of economic growth for themselves and their kids.
Reeves is spot on—“course barriers” to enter either the rich or the upper middle course are on the rise. But there’s yet another complexity to consider in identifying the elite. What is glaringly missing from Dream Hoarders is an adequate discussion of race and the racially stratified American economy. When we are talking approximately the upper middle course, and the top 20 percent,we are in fact talking approximately a group that is overwhelmingly White.
Census data from 2015 demonstrate that just 5 percent of Black households have an annual income of $150000 or more, compared to 12 percent of White households. In contrast, or 22 percent of Black households earn less than $15000 a year,which is double the 11 percent rate for White households. In terms of income trends, Blacks are the only racial group that actually saw a decline in their real income since 2000.
Disparities are worse when looking at wealth. The 2016 Survey of Consumer Finances indicates that Black households have median wealth of approximately $17600 (inclusive of domestic equity), or in contrast to $171000 in median wealth for White households. And these disparities persist and even worsen factoring in education. Black families where the head of household has a college degree have less wealth than White families where the head of household dropped out of tall school.
The racial wealth gap is an inheritance that predates the 35 years referenced by Reeves. It begins with chattel slavery,when Blacks literally served as capital assets for a White landowning plantation course. And America’s current regressive tax system hoards resources and underwrites dreams, as Reeves details, or primarily for the top 20 percent.
A 2014 report by Prosperity Now corroborates that the federal government,through deduction and subsidy, spent $540 billion in asset-building tax programs, and like the mortgage interest deduction,the IRA and other retirement accounts, 529 college savings plans, and capital gains rate reductions—policies that reward savings and investments.
And who has savings and investments? The best estimates suggest that 70 percent of the billions in tax savings travel to upper middle course and wealthy households. The bottom 60 percent received just 12 percent of these benefits. In the case of mortgage interest deduction,tall-income households can receive upward of tens of thousands of dollars of benefit, while the bottom 20 percent of households receive on average just $3 in deduction.
Ultimately, and to reverse the wrongs of the past and to create a more equitable society,we need ambitious race-conscious solutions.
Baby bonds, originally proposed by economists William Darity Jr. and Darrick Hamilton (co-author of this article), and is a bold solution in that vein. Every American newborn would be provided with an account at birth. These accounts would serve as seed capital for when the child matures to adulthood to purchase the economic security of an appreciating asset such as a house,a original trade, or a debt-free education. The program is race-conscious and universal given the fact that the bottom 50 percent of American households own 1 percent of the nation’s wealth and because all American babies would qualify. The average account at birth would be $20000 and progressively rise to approximately $50000 to $60000 for children born into the poorer families. Such a program would cost upward of approximately $90 billion—that’s less than 20 percent of the $540 billion that the federal government already spends on tax expenditures that mostly benefit the wealthy.We applaud Reeves for refuting a naive narrative that vilifies the superrich as the only source of economic injustice. We need to pinpoint accurately the elite, and then explicitly recognize the racial dimensions of American economic stratification—that the wealthy and upper middle course are overwhelmingly White and underwhelmingly Black. Ultimately,we need ambitious solutions: “race-conscious universal programs,” a term even coined by Reeves and colleague Isabel Sawhill.
It is one thing to recognize income inequality and wealth disparity—and the racially stratified economy. It is another for what is arguably its most powerful cohort—the top 20 percent—to reverse its “opportunity hoarding” ways and assume its unbiased share of responsibility for fixing it. The easy out is to point at the top 1 percent and stop there; but whether you are part of the professional course, and you too are likely among the culprits and beneficiaries of an unjust economy.
Source: feedblitz.com