October 2002 Print

 

Ownership Statistics

• The financial wealth of the top one percent of households now exceeds the combined wealth of the bottom 95 percent.¹
  
• The wealth of the Forbes 400 richest Americans grew by an average $940 million each from 1997-1999² while over a recent 12-year period the net worth of the bottom 40 percent of households declined 80 percent.³
  
• From 1983-1997, only the top five percent of households saw an increase in their net worth while wealth declined for everyone else.⁴
  
• As of 1997, the median household financial wealth (marketable assets less home equity) was $11,700, $1,300 lower than in 1989.⁵
  
• Anticipated Social Security payments are now the largest single "asset" for a majority of Americans. Funded by a levy on jobs, the Social Security payroll tax is now the largest tax paid by a majority of Americans (the largest for 90 percent of GenXers), funded with a flat tax of 12.4 percent on earnings up to $72,600.
  
• What about the largest intergenerational transfer of wealth in history–that $12 trillion in the hands of baby-boomers' parents? Current wealth patterns indicate that one-third of that pending transfer will go to one percent of the boomers ($1.6 million each). Another third will go to the next nine percent ($336,000).The final slice will be divided by the remaining 90 percent (an average $40,000 apiece).⁶ 

 

Dispossession of the Citizenry

• The richest 400 Americans hold wealth equivalent to one-eighth of the GDR.⁷
  
• In 1982, inclusion on the Forbes 400 required personal wealth of $91 million. The list then included 13 billionaires. By 1999, $625 million was required for inclusion on a list that included 268 billionaires.⁸The combined net worth of the Forbes 400 topped $1 trillion in September 1999, up from $738 billion 12 months earlier, for an average one-year increase of $655 million each ($12.6 million per week).⁹Eighty-six percent of stock market gains between 1989 and 1997 flowed to the top ten percent of households while 42 percent went to the most well-to-do one percent¹⁰
  
• If Congress adopts Martin Feldstein's proposal for the partial privatization of Social Security, the U.S.Treasury will pump budget surpluses equal to 2.3 percent of the national payroll into the stock market each year.That's $ 100 billion-plus per year in tax revenues to boost stock prices.¹¹

 

Control by a Monied Minority

• In 1998 the top-earning one percent had as much income as the 100 million Americans with the lowest earnings.¹²
  
• Economist Robert Frank reports that the top one percent captured 70 percent of all earnings growth since the mid-1970s.¹³
  On an inflation-adjusted basis, the median hourly wage in 1998 was 7 percent lower than in 1973–when Richard Nixon was in the White House.¹⁴
  
• The pay gap between top executives and production workers grew from 42:1 in 1980 to 419:1 in 1998 (excluding the value of stock options).¹⁵
  
• Executive pay at the nation's 365 largest companies rose an average 481 percent from 1990 to 1998 while corporate profits rose 108 percent¹⁶
  
• Had the typical worker's pay risen in tandem with executive pay, the average production worker would now earn $ 110,000 a year and the minimum wage would be $22.08. 

 

In The Pursuit of Happiness!

• Household working hours reached 3,149 in 1998, roughly 60 hours a week for the typical family, moving Americans into first place worldwide in the number of hours worked, nudging aside the workaholic Japanese.¹⁷
  
• According to the Bureau of Labor statistics, the typical American now works 350 hours more per year than a typical European–almost nine full weeks.

• Parents spend 40 percent less time with their children today than they did thirty years ago.¹⁸

• The after-tax income flowing to the middle 60 percent of households in 1999 is the lowest recorded since 1977. Among the bottom fifth of households, average after-tax income fell nine percent from 1977 to 1999.

• According to the Census Bureau, the top fifth of households now claim 49.2 percent of national income while the bottom fifth gets by on 3.6 percent¹⁹

• Raising the poverty threshold to $19,500 (as recommended by the Census Bureau) boosts the poverty rate to a record-high 17 percent, leaving 46 million Americans short of that minimal level. 

"This is Catholic?!"

• In the same year (1998) when one American (Bill Gates) amassed more wealth than the combined net worth of the poorest 45 percent of American households,²⁰ a record 1.4 million Americans filed for bankruptcy–7,000 bankruptcies per hour 8 hours a day, 5 days a week²¹ Personal bankruptcy filings topped 1.3 million in 1999.
  
• Nine years into the longest economic expansion in the nation's history, labor's share of the national income remains two to four percentage points below the levels reached in the late 1960's and early 1970's.²²
  
• The top one percent pocketed, on average, an annual tax cut of $40,000 since 1977, an amount exceeding the average annual income of the middle fifth of households.²³
  
• In 1998, 9,257 new and existing homes sold for $1 million or more, triple the number of million-dollar homes on the market in 1995. Annual mortgage interest payments on a newly purchased $1 million home total $79,247 (assuming 10 percent down and a 30-year adjustable rate mortgage at 8 percent).The home mortgage interest deduction for someone in the top 39.6-percent tax bracket saves on that house $31,382 a year in federal income taxes. When that saving is added to the $40,000 average annual tax cut allowed the top one percent since 1977, that $1 million home costs $7,865 per year or $655 per month.  
  
• For every age group under 55, home ownership remains below where it was in the early 1980s.²⁴

Making the World Safe for Big Money

• The world's 200 richest people more than doubled their net worth in the four years to 1999, to more than $1 trillion, for an average $5 billion each.²⁵Their combined wealth (the top seven are Americans) equals the combined annual income of the world's poorest 2.5 billion people.²⁶
  
•  Microsoft co-founders Bill Gates and Paul Allen plus Berkshire Hathaway's Warren Buffet have a net worth larger than the combined GDP of the 41 poorest nations and their 550 million people.²⁷

A Closer Look at Globalization

• The world's 200 largest corporations account for 28 percent of global economic activity while employing less than one-quarter of one percent of the global workforce.
  
• Experts report that the well-to-do have hidden at least $8 trillion in tax havens.²⁸ ...held in an estimated 1.5 million offshore corporations.²⁹

[Data compiled by The Shared Capitalism Institute, www.sharedcapitalism.org/]

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1. Edward N. Wolff, "Recent Trends in Wealth Ownership," a paper for the conference on "Benefits and Mechanisms for Spreading Asset Ownership in the United States," New York University, December 10-12, 1998. In 1995, the financial wealth of the top one percent was greater than the bottom 90 percent.

2. Forbes 400, October 11,1999.

3. Edward N.Wolff, "RecentTrends in Wealth Ownership," ibid.The period cited was 1983 to 1995, based on the Federal Reserve's 1995 Survey of Consumer Finances.

4. Federal Reserve Bulletin, January 2000, p. 10.

5. Median household financial wealth was less than $10,000 in 1995. The $11,700 figure is based on a 12-percent growth projection in Wolff, "Recent Trends in Wealth Ownership," ibid.

6. Near Karlen,"And the Meek Shall Inherit Nothing," New York Times, July 29, 1999, p. B1.

7. See www.forbes.com.

8. Forbes 400, September 13, 1982; Forbes 400, October 11, 1999.

9. Forbes 400, October 11, 1999 (see www.forbes.com).

10. David Wessel, "U.S. Stock Holdings Rose 20% in 1998," Wall Street Journal,
March 15, 1999, p. A6.

11. Feldstein, chairman of Reagan's Council of Economic Advisers, was a key architect of supply-side economics.

12. Congressional Budget Office Memorandum, Estimates of Federal Tax Liabilities for Individuals and Families by Income Category and FamilyType for 1995 and 1999, May 1998.

13. Robert Frank, Luxury Fever (New York: Simon & Schuster, 1999).

14. Median earnings based on Commerce Department's Bureau of Economic Analysis data reported in State of Working America 1998-99; labor's share of non-farm business sector income based on Bureau of Labor Statistics data reported in Economic Report of the President (February 1999), at p. 384.

15. Business Week, "49th Annual Executive Pay Survey," April 19, 1999.

16. A Decade of Executive Excess: The 1990s (Boston: United for a Fair Economy and Institute for Policy Studies, 1999).

17. Steven Greenhouse, "So Much Work, So Little Time," New York Times, September, 1999, p. WKI.

18. Charles Handy, The Hungry Spirit (New York: Broadway, 1998), p. 17.

19. See www.census.gov ("income" at Table H-2).

20. Professor Edward N.Wolff cited in "A Scholar Who Concentrates...on Concentrations of Wealth," Too Much, Winter 1999, p. 8.

21. Doug Henwood, "Debts Everywhere," The Nation, July 19, 1999, p. 12.

22. Louis Uchitelle, "As Class Struggle Subsides, Less Pie for the Workers," New York Times, December 5,1999, p. BU4 (reporting on research by Professor Edward N. Wolff).

23. Issac Shapiro and Robert Greenstein, TheWidening Income Gulf (Washington, D.C.: Center for Budget and Policy Priorities, September 4, 1999), citing CBO figures.

24Homeowners are also now much more highly leveraged than in the 1980s, with down payments at record lows and mortgage levels at record highs. Lou Uchitelle, "In Home Ownership Data: A Hidden Generation Gap," New York Times, September 26, 1999, p. BU4.

25. United Nations Human Development Report 1999 (New York: Oxford University Press, 1999).

26. United Nations Human Development Report 1998 (NewYork: Oxford University Press, 1998).

27. "Rich Comparison," Wall Street Journal, July 30, 1999, p. I.

28. The IMF estimates that the amount in offshore tax havens grew from $3.5 trillion in 1992 to $4.8 trillion in 1997. Other estimates put the amount as high as $13.7 trillion. See Douglas Farah, "A NewWave of Island Investing," Washington Post National Weekly Review, October 18, 1999, p. 15. Alan Cowell and Edmund L Andrews,"Undercurrents at a Safe Harbor," New York Times, September 24, 1999, p. C I.

29. The Times (London), September 23, 1999.