The Wealth Gap

One of the things most important issues facing the average American, whether they know it or not, is the disparity in wealth between a select few top individuals and common citizens. It is extremely important to address the difference between the wage-gap and the wealth-gap. The wage-gap refers to the amount of gross income people make, and in some ways in entirely understandable. If a company or individual has a very good product or idea they tend to make more money than other companies, and thus grow their business. However, the wealth-gap works in a different way. Essentially, wealthy individuals pass on their accrued wealth to their children and relatives, which actually works against the idea that people with good ideas tend to make more money. If a person or company starts out with more money than competitors it makes it very difficult to fairly compete with. Things like smart yet expensive advertising and inexpensive mass production or lower quality products make it difficult for good, new ideas to gain traction.

For clarity, let's start by focusing on just the income gap. The gap between the largest earners and the lowest is its highest levels since the Great Depression. Not including taxes, the top 1% of earners make about 22.5% of total national income.

At the same time, the top 1% own about 40% of the nation's wealth. Further, these same individuals own more than the bottom 90% combined.

However, a major point I'd like to make in the final chart is that it is very easy for the wealthy to become wealthier as time passes, as the price of stocks continues to rise at a much faster pace than the average wage in this country. And that's significant. High stock prices tend to mean that average people, people who do not have a large amount of wealth, cannot invest in the stock market, and thus those people miss out on anything growth in companies means. The majority of people in the US have no reason to pay attention to the stock market, and as time passes fewer and few people do either.

This is especially important to understand in the context of today's politics, where supreme court cases and national trends continue to degrade the limits on the amount of influence lobbyists and wealthy individuals can have on politicians. SC cases include the 2010 Citizens United decision - removing the ban on corporate election spending - and McCutcheon v FEC - which removed the overall cap on individual contributions. These cases are extremely critical to understanding the type of national trend that is developing as a result of spending on politics - it allows the top earners to invest as much as they want on whomever they like, and then use that influence in order to reduce regulations on their type of industry, expanding their power.