By Charles Dundley
Only 1% of the population owns about half of all the wealth in the world. That means that about 1% of the all the people in the world owns nearly half of more than $240 trillion. If there really was a “trickle down” effect, this might not be so bad. But, studies show that the money isn’t trickling down.
Not only that, large corporations pay a smaller percentage of business taxes than small businesses do. “In 2010, large, profitable corporations paid an effective tax rate of 12.6 percent of their global income, the General Accountability Office found,” as reported by CBS Money Watch. Not all of corporate tax savings are pumped back into the business to develop consumer products. Some of the savings may land in the wallets of chief executive officers, expanding the wealth gap.
This is an important fact to consider when examining the widening wealth gap, as many high income workers own or are employed by large corporations. Before you start thinking that all workers at large corporations are making a lot more than you do, consider this, “CEO pension plans at some companies are now worth an average 239 times more than the retirement plans of the people they supervise,” as reported by NBC News.
At companies with the widest income gaps, chief executive officers were paid as much as 550 times more than other employees. Considering the fact that some executives were paid $45 million a year while the average American income is $51,017, it’s a wonder the gap isn’t wider. A slow recovering economy isn’t helping much, at least not in regards to the average American wage earner.
“We’ve had [economic] growth, but it hasn’t really reached everyday Americans,” said Elise Gould, an economist at the left-leaning Economic Policy Institute. “It’s a lost decade, maybe more.” CNN Money also reports that, “Since 1967, Americans right in the middle of the income curve have seen their earnings rise 19%, while those in the top 5% have seen a 67% gain.
Rising inequality is seldom a sign of good social stability.” Another troubling statistic involves how many Americans are living in poverty. As of 2013, 15% of Americans were living in poverty. Huge disparity between executive and employee wages certainly doesn’t help.
It remains to be seen how long middle class Americans and members of the working poor will continue to “accept” widening income and wealth gaps, especially when it’s middle class Americans who pay a lion’s share of the country’s taxes. It’s also middle class Americans who retailers hope will buy and spend during major holidays like Christmas. Demanding that these people work longer hours, work harder, while they have less disposable income due to cost of living increases may continue to yield negative results.