As the Data Show, There’s a Reason the Wall Street Protesters Chose New York
By SAM ROBERTS
Published: October 25, 2011
When the federal income tax was first imposed in 1913, the richest 0.1 percent of households reaped 8.6 percent of the nation’s income. In 2007, as the recession began, the share going to that sliver of megarich Americans was 12.3 percent.
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Times Topic: Occupy Wall Street
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And an even more exclusive club — the top 0.01 percent of households — is collecting a greater share of total income than ever before recorded.
Those numbers suggest that theOccupy Wall Street protesters can make a compelling case when they complain that the economic scales are unfairly tilted toward the wealthy. The megarich hold more of the nation’s wealth and collect more of the overall income today than at any time since right before the Great Depression.
Certainly, the protesters picked the right city in which to start their campaign. Among the 1 percent of American households with the highest income, a significant portion, 13 percent, live in the New York metropolitan area, with 4.4 percent living in Manhattan, according to an analysis by Andrew A. Beveridge, a sociologist at Queens College. In three Manhattan neighborhoods, the Upper East and Upper West Sides and Greenwich Village, more than 11 percent of the households make enough to qualify for the top 1 percent.
Making precise comparisons to earlier periods can be difficult: Some income and wealth numbers are estimates, and income is only one way of measuring wealth. Still, there are some notable ways to measure gilded ages.
In the late 1890s, when the average American worker’s weekly wage was less than $10, John D. Rockefeller was earning about $192,000 a week. When he died in 1937, the estimated annual investment return on his $1.4 billion wealth produced an income equal to that of about 116,000 American workers, according to Branko Milanovic, lead economist for the World Bank research group and the author of “The Haves and the Have-Nots.” Today, Bill Gates’s annual income equals that of about 75,000 workers.
“If you compare Rockefeller’s income and the average income in the United States, then the gap was even greater in those days,” Dr. Milanovic said. “In the 1920s, though, the overall distribution of income is about the same as now in terms of inequality — very high.”
J. Bradford DeLong, an economics professor at the University of California, Berkeley, largely agreed. “Because the economy was smaller back then, fewer people — John D. Rockefeller, Andrew Carnegie, J. P. Morgan — were more powerful in the country,” he said.
But comparisons of disparity are not just about income or even only about money.
“Right-wingers will say that even though the relative income and wealth gaps are about the same, that the lifestyle gap between rich and poor is much less than it was back then,” Professor DeLong said. “Nearly everybody today can afford to overeat to their heart’s content and watch ‘Hamlet’ when they choose, while a century ago only the rich could afford to overeat or watch ‘Hamlet.’ ”
Another economist, Diana Furchtgott-Roth, a senior fellow at the Manhattan Institute, said that income inequality may have risen during the recession, but that generally, when dual-earner couples and government benefits and taxes were figured in, the overall increase in disparity was obscured.
Jacob S. Hacker, a political science professor at Yale and co-author of “Winner-Take-All Politics,” said measuring wealth gaps missed changes in sources of income over time. “The super-rich today are not rentiers living off their accumulated wealth, as was frequently true in early part of the last century,” he said. “The majority are financial and corporate executives.”
The wealthiest of the wealthy control more of the country’s treasure than at any other time for which data are available. In 1913, the share of national income going to the top 0.01 percent of households was 2.8 percent, Professor Hacker said. In 2007, that same percentage of households earned 6 percent of national income.
“In 1917, average income — including capital gains — among the top 0.1 percent was 127 times the average income of the bottom 90 percent,” Professor Hacker said. “Average income among the top 0.01 percent was 509 times as great. In 2007, average income among the top 0.1 percent was 220 times average income among the bottom 90 percent. Average income among the top 0.01 percent was 1,080 times as great.”
Over the past century, according to a study by Emmanuel Saez, an economics professor at Berkeley, the share of income collected by the top 1 percent of Americans peaked at 24 percent in 1928 — a high that was not matched until 2007.
While there are more very rich Americans today, the richest are very different from their predecessors. For starters, by most measures they are not as rich. By some counts, John D. Rockefeller was worth more than Bill Gates or Michael R. Bloomberg.
When Rockefeller died in 1937, his $1.4 billion fortune constituted one sixty-fifth of the gross national product, according to an analysis in 1996 by Michael Klepper and Robert Gunther in their book “The Wealthy 100.” That placed Rockefeller first in their compilation. Bill Gates ranked 31st, with his $15 billion net worth at the time then comprising one four hundred twenty-fifth of G.N.P.
Now, Mr. Gates’s net worth of $59 billion, according to the latest Forbes magazine ranking, is about one two hundred thirty-seventh of G.N.P., and would place him 12th on the 1996 list, after Henry Ford. Mr. Bloomberg, with about $19 billion, would be 58th, behind Julius Rosenwald, the early-20th-century president of Sears, Roebuck.
Mr. Gates, like Ford, Rosenwald and Mr. Bloomberg, also gives a lot of his money away (last year, he and Mr. Bloomberg were among 40 of the wealthiest Americans who pledged to give away at least half of their fortunes). Ron Chernow’s biography of Rockefeller recalls that his philanthropy was inspired, in part, by Andrew Carnegie, who wrote in 1889 that the gulf between rich and poor threatened the very survival of capitalism.
“The man who dies thus rich dies disgraced,” Carnegie said, which is another version of Mr. Bloomberg’s vow to bounce his check to the undertaker.
Some suggested response questions:
1. Does this situation seem ok, or could it create problems?
2. Does this situation have any common ground with the Enclosure Movement?
3. Are things getting better, worse, or staying the same?
4. Do you have any suggestions?
5. Does any of this concern you?
FROM: New York Times http://www.nytimes.com/2011/10/26/nyregion/as-data-show-theres-a-reason-the-wall-street-protesters-chose-new-york.html?scp=1&sq=As%20the%20data%20show&st=cse
See Related NYTimes Graph: http://www.nytimes.com/interactive/2011/10/26/nyregion/the-new-gilded-age.html?scp=1&sq=NewGilded%20Age&st=cse
It is not right that the very few Americans at the top hold so much wealth. As the article stated, “The gulf between the rich and poor threaten[s] the very survival of capitalism.” The article said that the top 0.1% of households own 12.3% of the nation’s wealth. After some research on the web, I found that the top 20% hold 85%, the second 20% hold 11% and the middle 20% hold 4%. The bottom 40% holds less than .5% of the nation’s wealth. These statistics show that not much wealth goes to the middle class, and the poor have almost nothing at all. This is similar to the Enclosure Movement, where the lords of manor were getting richer, the poor and unemployed had nothing, and there was almost no middle class. In our situation, though, the nation is in a recession and there is no New World our poor can be sent to colonize.
ReplyDelete-Amy
This is the reason why rich people should be taxed more. President Obama has proposed this plan, but no one seems to be listening to him. A poor family and a rich family should not be equally taxed; the rich family should have to pay more. Poor families should not spend a large amount of money on taxes because they won’t have enough money for food or rent. Warren Buffet has told Congress that he and other rich people want to be taxed more. People like Buffet, Gates, or Bloomberg don’t mind giving up a large sum of their money to benefit this country, because they have a large amount of money. Lower job creation has also been a cause of lower taxation. Proper taxation on the rich could benefit both the poor and the rest of the country. Republicans should help pass this bill because it will benefit our country. -Nikhil
ReplyDeleteThis situation could create problems because like at the time of the Enclosure Movement, the rich are getting richer and the poor are getting poorer. Soon, all the wealth will be concentrated in the top .1 percent of the population and there will be an even bigger gap between them and the rest of the population. However, most of the wealthiest people in America have worked hard for their money and deserve it (Steve Jobs, Bill Gates, etc) so it would't be fair to just take away their money. I agree with Nikhil that the rich should be taxed a higher percentage of their income. For example, 10 percent for the "megarich" does not affect them as much, because most of their money isn't being used; it's just sitting there in the bank. However, a household with an income of, say, $50,000 a year has to constantly spend all of their money on basic necessities such as food and clothing, so it would be a lot harder for them to pay ten percent of their income.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteAs much as I want to support the Occupy Wall Street protesters, I feel like they are pushing it too far. They have great causes; they see how our country is going in a downhill spin, like a marble on a hill. I know that the protesters have power, but in the end the rich will prevail. The protesters don’t understand that the more they try to influence the rich, the more they are making them stubborn. The United States used to have a balanced amount of people in the lower, middle and upper class. Now, as we look forward into time, the middle class is withering away like string attached to a raging bull, unable to stop. Piggy-backing onto Nikhil’s post, I completely agree that Obama’s tax reformation is the way to go, but, the republicans don’t want that to happen. The republicans and the democrats know that they are fighting over which side gets the glory, but they don’t know how to stop it. The skirmish is taking over the political field, killing political fields all together, turning it into a joke. Our country is turning into a twisted piece of porcelain; porcelain is a very fine material like the earth, but we are taking that porcelain and doing anything we can to kill it. Our country is on the edge of failure, this is the last stand for the government before it morphs into scenery like the fictional book called Gone. In this book the kids split into two groups: powerful and weak, eventually this will become what government and society will look like. A war is arising and no one can stop it; our country is dying, sadly, without our Star Spangled Banner.
ReplyDeleteThe situation the article describes is related to the Enclosure Movement. Similar to the lords in 16th century England, the rich in America are getting richer, and they are beginning to dominate a concerning portion of the nation’s wealth. Unfortunately, there are no longer any unclaimed territories, so letting the poor start over cannot solve this problem. As previous comments have stated, taxing the rich more could help even out the wealth. The clear problem with this plan is that it would have the possibility to anger powerful people, and eliminate some of the drive people have to work hard. Households with the highest incomes already have to pay 25% more than lower income people. I agree that having higher taxes on richer people is a good idea, and domination by a small amount of people is not; however, over increasing the tax on rich people could cause the nation more severe problems than not having an ideal division of wealth.
ReplyDeleteThings are getting better and worse. Lots of things are happening that are working and making the world better. The fact that many incredibly rich people are giving away half their fortune. Waren Buffett is giving away 99 percent of his fortune to help America and the rest of the world. There are also things that aren’t working. Taxes are being increased for the rich and the poor. The rich are easily paying off the taxes, while the poor are struggling. Taxes should not be the same for the upper class and the lower class. On the other hand, President Obama is trying to give higher taxes to the rich, for the American jobs act, making them get slightly less rich. The only problem is that it doesn’t look like he is getting anywhere. People have been trying to help, but the economy hasn’t been changing that much.
ReplyDeleteThe gap between the average amount of income with the rich and middle/poor class is getting worse. Like it says in the article above, in 1917 the top 0.1 percent was 127 times the average income of the bottom 90 percent, while in 2007 the gap between the rich and the middle and poor became even larger by being 220 times the average of the middle class, and with the mega rich it became 1,080 times the middle class average. I agree that Obama's tax reformation should be passed, but it seems that it will take months before a decision could be made. It is not being passed just because of the fact that the rich would have to pay more, it is more because of the fact that the Democrats and Republicans do not want to side with one another and say that the Democrats or Republicans were right. So if the two sides are against each other no one from either side will agree with the other even if that person likes the plan. The Democrats and the Republicans should put their competition aside and approve the reformation plan or come up with another solution.
ReplyDeleteThe poor stay poor and the rich get richer. In order to stabilize the economy, President Obama must create higher taxes for the rich. He has proposed this idea in the American Jobs Act, but has not made any progress in doing so. Warren Buffett, one of the world's wealthiest and most influential men, also believes that putting higher tax on the rich is the right thing to do. With some background research, I have found that 68% of millionaires agree with Buffett's proposal. One of the only ways to make things better is to tax the rich more. They have more money to use than the average US worker.
ReplyDeleteThe problem of where the wealth is has been around for a while, but the reason nothing is happening to fix it is because of the stalemate in Washington between the Democrats and the Republicans. The moment a plan gets thought of, the opposing political party immediately turns it down. I agree with what everyone has said the rich need to pay more money in taxes. I think that some of the people who are the “mega-rich” deserve the money that they have, people like that made smart decisions. The rich do have money to spare, though, which could be put to better use. I researched John Rockefeller’s fortune and if he was earning money in the same ratio as he was in the late 1800s he would earn about 222 billion dollars. What could you buy with 222 billion dollars?
ReplyDeleteThe situation that the rich create a large portion of the GNP is similar to the Enclosure Movement because the rich have a large portion of the general wealth, while the poor have close to nothing individually. There are many more poor people compared to the rich, yet the rich still drive the economy. The rich will eventually make the majority of the country’s GNP, and the poor’s salaries will keep on decreasing. A way to solve this would be to tax the rich even more than they are already taxed on their salaries and give a portion of that money to the poor. Many of the megarich have already vowed to give away half of their entire fortune( Bill Gates and Michael Bloomberg) to help with the economic crisis. I believe that Obama’s bill to tax the rich more could help reduce the mass gap in financial standing between the rich and the poor.
ReplyDeleteThe situation is already creating problems for the U.S., but the wealthy shouldn’t be punished. Many people are angry because the rich are getting richer and the poor are getting poorer. The key to solving this is education. Today, there are very few jobs that you can get without a college education, it used to be that it was easy to get a job in construction but since the economic crisis less people are building houses and other things, so the need for construction workers is significantly less. If a kid is born into a wealthy family it is very likely that they will get a good education and end up with a good job, because their family has the money for it. If more money goes into educating and paying teachers in public schools then kids who don’t have opportunities to go to great schools are more likely to go to college and get a job. Education is one of the main reasons people earn what they earn. If we do raise the taxes on wealthy people we should be putting some of that money into education, because that will help us in the long run.
ReplyDelete-Athena
This situation is not ok and could create problems. Many middle class citizens in our country cannot find jobs, afford health care, or afford a college education for their children. The article states that the rich have most of the country’s money. The richest 0.1 percent has 12.3 percent of this country’s income. The rich should have a higher tax bracket than the poor. Even if the taxes are increased for the rich, the problem of lack of jobs, no medical care, and unaffordable education still exists in this country. Lack of education is the root of these problems. This country should have more affordable educational opportunities. Everyone should be required and have the opportunity to get a college education. Many wealthy Americans donate annually and this does not solve the inequality problem. Raising taxes alone will not solve the problem. Education and jobs will.
ReplyDeleteThe economic crisis of today contains definite similarities to the Enclosure Movement. Today businessmen and bankers receive a huge salary and bonuses that even grow as the economy worsens. As bankers accumulate more wealth, average people’s income declines, and unemployment grows. The gap between these two classes creates a serious problem, of disparity, that as a nation we will have to fix. Lords, during the 16th century, turned farming lands into sheep grazing pastures, creating fewer jobs for the copyholders and laborers, but providing the Lords with more wealth. The gap between the poor and Lords also developed a problem, fixed by sending the poor to the New World. The English, back in the 16th century mended their problem of poverty, which the people of modern America should do too.
ReplyDelete4. Do you have any suggestions?
ReplyDeleteWhat needs to happen to solve all of this is progressive taxes. This means that the more you make, the more you pay tax, and the more you give to your country. It isn't fair that the people who can least afford to be heavily taxed are. The more you earn, the higher your tax should be. I’m not saying that the rich should be left with no money, since many of them worked hard to get where they are today, but the fact that they are the ones being let off easy is ridiculous! The poor are being given bigger taxes for what, so they’ll work harder? Doesn’t giving them bigger taxes make it harder for more Americans to get back on their feet? Isn’t that exactly what we don’t want? America has always been the place where people go to start over, to gain new life. And we’re defeating all of this by making it impossible for our citizens to start over. The more one earns, the more they should give to others. That’s what the good, ethical, moral thing to do is. It is simply unfair to try to make those who can pay the least pay the most.
Like many others on this blog, my suggestion is that the top 0.1% should pay a lot more taxes than the rest of the 99.9% of Americans. This way they will still have their money that they earned, but the rest of the world will benefit from their work as well. Also with this money paid, we could put could help not only our military, policemen ect, we could also give a small boost to President Obama’s job act, and start hiring the 9.5% of Americans who are unemployed. Obama’s job act would build and help improve schools, hire teachers, and work on our roads, railroad’s and airports. To convince the people who dislike taxes to help restart the economy, we could allow them to pay for things like roads, schools, and airports and name them after that person. It could be the ultimate purchase for people who already have it all, and we could get all these wonderful things out of it! I think that we should use the wealth of the top 0.1% of Americans to make the US a better place.
ReplyDelete-Sasa
The current amount of division of money between the wealthy and the poor is massive. If a capitalist country has a large divide between the wealthy and the poor, I believe that that shows the current system of government needs to be changed. The system of government should not be changed that drastically as capitalism to communism, but it should be changed enough that each individual should make about as much as any other individual. The “Occupy Wall Street” act has what I believe is the right idea for dealing with the divide of wealth with in our very own country. They believe that there is a problem with the percentage of wealth between Americans and that needs to be dealt with. The members of “Occupy Wall Street” do not have a solution, but they believe, as do I, that problems like this in our country is why we have a congress, and even a government all together.
ReplyDelete-Nat Leabo
The situation of very few Americans holding 127 times more wealth than the bottom 90% is not right. It could create problems such as protests that lead to violence in the future if it is not fixed. This situation is very similar to the Enclosure Movement because the poor and middleclass were losing money while the lords of the manor were becoming richer. Like many others have said, the unfair distribution of wealth can be resolved by making the richest pay higher taxes and the poor not pay as much. If the taxes are raised for the wealthiest Americans such as the “megarich” and lowered for the lower income families, then they will to have enough money to pay for necessities such as rent, food or clothes and the rich will still be prosperous.
ReplyDelete-Amber
I believe that this problem is getting worse right now. As we speak, people are protesting in New York, the center of our financial system, and as a result, the whole economy is in a bigger tailspin than it was before the protests started. The protesters are only making the economy worse. Wall street needs to do something about the problem, but as the protesters have no exact requests other than “give us more money”, there is little they can do. This puts everyone at an impasse: investors and bankers can do nothing to please the protesters as they haven't given requests we can fulfill, and they are only harming the economy, making more people angry at wall street. We can't resolve this problem without negotiations, and since the protestors don't seem to request anything, we cannot stop the damage they are doing to our economy, and ultimately, our country.
ReplyDelete1. Does this situation seem ok, or could it create problems?
ReplyDeleteThe situation of economic inequality is a very heavily debated topic in politics today, and always has been. But the fact is income inequality in America is at dangerous levels. The United States is ranked 81st on the list of income equality by the United Nations (Wikipedia.org) and is behind Nepal and Cameroon. the rich of this country also benefit from some of the lowest taxes in the nation, which does not even begin to make sense. More than one revolution has been started over such a situation, such as in Russia in 1917. something must be done soon, or the rich will continue to get richer and the poor will continue to get poorer. That is a recipe for disaster.
This article shows how the economic conditions are getting better since the 1900’s. The income equality is much higher. This means that the income to Americans is much more fair now. In the 1900’s, when the money was not divided equally, the situation was a lot like the Enclosure Movement. The wealthy were becoming even wealthier, and the poor were becoming even poorer. The wealthy were making all the decisions, making it hard for the poor to get jobs. This was a hard situation to get out of. However, times have gotten better in the United States. The economic situation has improved a lot. The income gap between Bill Gates and people in the middle class is a lot smaller than the gap between John D. Rockefeller and people in the middle class. None of this concerns me, because I believe that this is a step forward in our economic struggles. This means that the wealthy will not have as much control over other Americans, than in the 1900’s.
ReplyDeleteThis article, and the entire Occupy Wall Street movement, is focused too much on bringing the 1% down to the level of the majority, instead of raising the poorest up. If people focus on bringing the rich down, it could potentially ruin the United States economy, since that portion of the U.S is creating jobs for the poor. If, instead, the bottom 20% is brought up, the average income in the USA is increased, and the living standards of the poor become better. As a result, the economy strengthens and the U.S becomes a richer country. I agree that the taxation difference between rich and poor shouldn’t be as even as it is now, yet if too aggressive a tax system is used on the wealthy, it creates a disincentive to work since they are only getting a fraction of their earnings. This would discourage the higher earning percentages from working as hard, expanding their businesses, and creating more jobs for the lower percentages. Occupy Wall Street should not be focused on making the 1% closer in income to the middle class out of jealousy, but instead bringing the poorest up to the middle classes by using a slightly steeper progressive tax system that is in use now.
ReplyDeleteThis article shows a large relation to the enclosure movement. As the lords of the manor were becoming richer, from their illegal act of enclosing the common lands to raise their sheep, the lower and middle classes that made a living off the land were struggling. The main difference between today's situation and the enclosure movement is an easy fix. To fix the enclosure movement's problems the lower class and those without jobs could colonize in the New World, but there is no fix that simple today. The economy today continues to get worse. The protesters on Wall Street are in no way, shape, or form bettering the economy. With no particularly clarified request there is very little anyone can do for them.
ReplyDelete-Kylee
This situation is similar to the enclosure movement in England in the sixteenth century. In 2007 the top .01 percent of households was receiving six percent of the national income. Today many of the wealthy are receiving all the money while much of the country is in unemployment. This is like the enclosure movement. There were wealthy people and poor people but most had jobs and land to live off of. The powerful wealthy then realized that the rest of Europe needed yarn, so they wanted to breed sheep for their wool. This action raised their wealth while it put many of the lower class people out of jobs.
ReplyDeleteThis is the reason why richer people should have higher taxes. The rich have a large portion of the world's money which is needed to benefit the world. Just like the Enclosure Movement, there was a great difference between the rich and the poor. With more money, the rich have more access to resources the poor do not have. The economy concerns me because I wonder where all of the money is going, and if its being used effectively or not. The economy is in terrible condition at the moment, but all of the politicians and the president are trying to make a change in the economy. My suggestion is to make the rich people's taxes slightly higher because they probably do not need all of the money that they have. This way, poor and middle class people will have access to the resources they need.
ReplyDelete