The U.S. Wealth Inequality Virus is Getting Worse

Image by Meir Clancy.

Compared to the recent past, Covid-19 is not killing as many people. On the other hand, the U.S. wealth inequality virus continues to become more virulent as reflected in widespread poverty, food insecurity, homelessness, and other social ills.

Over time, the wealth inequality virus, like Covid-19, has had its ups and downs in the damage it causes. Figures on the distribution of family wealth provided by the Federal Reserve Board show that when the wealth inequality virus recovers after a downturn, it generally produces new levels of inequality.

Below are two tables based on Federal Reserve Board figures starting in the first period covered, the third quarter of 1989, showing the high for the wealthiest during each presidency. Also included are the most recent figures covering the 4^th quarter of 2023. The two tables, together, show what has been the general strengthening of the wealth inequality virus in the United States.

During some presidencies, similar percentages were reached in other quarters. In 2020 Quarter 4, for first time, the wealth holdings of the .1% reached 13%.

Below are nominal dollar amounts in each period (which are actual dollar amounts not adjusted for changes in purchasing power from inflation).

Using the Federal Reserve Board figures, from the third quarter of 1989 to the fourth quarter of 2023, the nominal holdings of the wealthiest have grown more rapidly than those of the poorest 50%—over 11 times for the wealthiest .1%, and over 9 times for the wealthiest 1%, while the growth for the poorest 50% was up slightly more than 5 times and the poorest 90% up just above 6 times. During this same period, when the nominal wealth of the poorest 50% increased $.71 trillion to $3.61 trillion, the growth in the difference in the nominal wealth of the wealthiest 1% with the poorest 50% of the population went from $3.95 trillion to $40.91 trillion.

The growth of the wealth of the poorest 90% from 2017 to 2023 can be largely attributed to increasing home values for those who own their own homes, a part of wealth that is used to fill a basic need. It also makes up a much larger portion of their wealth than it does for the wealthiest, most of whose wealth/income is not used to pay for basic needs such as housing.

Growing Income Inequality Virus

From 1989 until the end of 2022, the share (pg. 34) of the nation’s income going to those making the most who are in the top 5% increased from 18.9% to 23.5% while the share of the bottom 60%, mainly members of the working class, fell from 29.1% to 25.2%.

During this same period, the share of the nation’s income going to the those in the 20% of the population making the smallest amount declined from 3.8% to 3%. In 2022 dollars (adjusted for inflation), their average income went up only $1,060 in over 30 years, from $15,060 to $16,120. By contrast, the average income of those in the top 5% during the same period (1989-2022) shot up $202,300 from $297,600 to $499,900.

Biggest Spreaders of Wealth Inequality Virus

The major culprit for the spread of the wealth inequality virus is the working of capitalism, or what some call our free market system. Taking advantage of the system are its chief beneficiaries, the obscenely super-wealthy.

At the end of 2023, according to the Bloomberg Billionaires Index, the twenty-five wealthiest U.S. citizens, together, were worth $2,026 billion which came to over 1.38% of the total wealth of some 330 million U.S. residents.

As of May 24, 2024, the Bloomberg Billionaires Index shows the wealth of the twenty-five wealthiest U.S. citizens, alone, had grown since the beginning of the year $390 billion to $2,416 billion, an increase of over 19%, despite the current year decline in wealth of $38 billion by a member in their ranks, comrade Musk.

Poorer Members of the U.S.

While some have accumulated excessive fortunes, many of those living in the U.S. endure great difficulties getting by and meeting their basic needs.

Poverty

Since 1989, the number of people deemed by the government to be living in poverty (pg. 23) has not fallen below 31 million, and has been as high as 46.6 million. In 2022, the last year for which there is a figure provided, 37.9 million were counted as living in poverty representing 11.5% of the country’s population. In 2022, those living in poverty even included (pg. 4) 15% of all children under 18 years old, and 1.9% of the population who worked full-time for the whole year.

The government’s criteria for determining who is living in poverty is a ludicrously low amount of income. To be classified as living in poverty in 2022 (pg.18), a single person under 65 years of age had an income of under $15,225. In some cities, that amount might not even cover the costs of decent housing. For a family of two adults and two children, the cut off point for them living in poverty was an income under $29,678.

Homelessness

From 2007 until 2016, the government’s national estimate (pg. 10) of the number of people experiencing homelessness declined from 647,258 to 549,928. Since then, it has gone up every year reaching 653,104 in 2023 which is “the highest number of people reported as experiencing homelessness on a single night since reporting began in 2007.” (pg. 2) Of those who were homeless, 111,620 were children (pg. 13) under 18 years of age, 10,548 of whom were unsheltered meaning they were not in “a regular sleeping accommodation for people (for example, the streets, vehicles, or parks).” (pg. 5).

Hunger

Here is how the U.S. Department of Agriculture Key Statistics & Graphics describes households in which people suffer from food insecurity:

“At times during the year, these households were uncertain of having or unable to acquire enough food to meet the needs of all their members because they had insufficient money or other resources for food.”

Their findings include:

* “44.2 million people lived in food-insecure households.

* 12.8 percent (17.0 million) of U.S. households were food insecure at some time during 2022.

* 7.3 million children lived in food-insecure households in which children, along with adults, were food insecure.

* The 2022 prevalence of food insecurity [households] was statistically significantly higher than the 10.2 percent (13.5 million) in 2021.”

Isn’t the presence of so many poor, homeless, and food-insecure people in such a wealthy country an indication of a gravely sick society?

Social Class

Another way to view the above statistics is from the viewpoint of social class.

The one percent includes the wealthiest and most powerful members of the capitalist class, and those who are closely aligned with them who, generally, financially, politically, and socially benefit from championing, in different ways, the interests of U.S. capitalists.

By contrast, the overwhelming majority of the poorest 90% is made up of members of the U.S. working class.

Going back to the 1970s, the capitalist class in the 1% have had great success at extracting and accumulating more of the wealth produced by the working class both in the U.S. and abroad. Among the reasons for this success are the weakness of the working class and state policies that include laws that are anti-working class.

Perhaps, recent worker upsurges will, if they continue and are successful, begin to reverse the trend of increasing wealth inequality especially if they can overcome growing resistance from capitalists, the government, and within their own ranks. However, even with a supposedly labor friendly president who will join striking workers on a picket line, the people at the top of the U.S. class structure have been increasing their share of the nation’s wealth, exacerbating the wealth inequality virus.

To rid us of the wealth inequality virus and create a world of greater equality and human decency will require major changes that include the antidote of confiscatory policies directed at seizing much of the wealth of the super wealthy, and utilizing it to benefit everyone, especially those with the greatest unfulfilled basic needs.

The post The U.S. Wealth Inequality Virus is Getting Worse appeared first on CounterPunch.org.

This content originally appeared on CounterPunch.org and was authored by Rick Baum.

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