Income Inequality Media Articles

Excerpts of Key Income Inequality Media Articles in Major Media

Below are key excerpts of revealing news articles on income inequality from reliable news media sources. If any link fails to function, a paywall blocks full access, or the article is no longer available, try these digital tools.

Note: Explore our full index to key excerpts of revealing major media news articles on several dozen engaging topics. And don't miss amazing excerpts from 20 of the most revealing news articles ever published.

This year’s Nobel Peace Prize winner and some high-tech entrepreneurs are competing to provide credit to the world’s poor. In November, 2004, [eBay founder Pierre Omidyar,] Sergey Brin and Larry Page, the co-founders of Google, and other leaders of the high-tech community gathered at the San Francisco home of the venture capitalist John Doerr for a weekend session with Muhammad Yunus, who is considered the godfather of microcredit. Yunus...is a highly gifted interlocutor between the extremely poor in the developing world and the West. This December, he will go to Oslo to receive [the Nobel Peace Prize]. During the famine of 1974 in Bangladesh...Yunus, an economics professor at Chittagong University, found the theories he was teaching maddeningly irrelevant; so he went into a neighboring village and began talking to the poor. He lent twenty-seven dollars to a group of forty-two villagers. Before long he became convinced that he had a remedy for their condition: providing very small individual loans to the impoverished to start activities ranging from making bamboo stools to buying a dairy cow. In 1976, after local banks refused his entreaties to make the loans...he founded the Grameen Bank. In early May, representatives from eight microfinance institutions around the world were invited to a three-day event at the Gates Foundation’s headquarters, in Seattle. At one point, the group met with Melinda and Bill Gates, and with Warren Buffett, too.

Note: If you want to be inspired by the amazing microfinance movement, which is transforming the face of poverty in our world, read this highly engaging, informative article. To be a part of this exciting global transformation, see http://www.WantToKnow.info/051023microcredit

Sacramento's Solar Cookers International, will take the global stage Friday in Florence, Italy. The nongovernmental organization, which is dedicated to saving the world with solar power, will receive an award from the World Renewable Energy Congress. The secret of the group's success is the "CooKit," a 3-by-4-foot piece of cardboard lined with aluminum foil that harnesses the sun's rays to cook food and pasteurize water. About 90,000 "CooKits" are heating up in Africa, where they are being manufactured and sold for $8 or $9. The group has helped introduce 500,000 solar cookers to 25 nations where people spend half their $1-a-day wages to buy firewood to cook their meals, said Bob Metcalf, a microbiologist who co-founded the group in 1987. Solar cookers allow them to spend that money on food instead of firewood, said Metcalf, who teaches at California State University, Sacramento. Metcalf says he hopes the award will get him 30 minutes with Bill Gates or some other investor to spread the gospel of the CooKit, which could be used by "2.5 billion people today" who rely on wood, charcoal or animal dung to cook meals. Metcalf also invented the Water Pasteurization Indicator -- a reusable sealed test tube with wax that melts when food or water has been pasteurized at 149 degrees Fahrenheit. "It takes about 90 minutes in the sun," he said. For more information, go to www.solarcookers.org.

Note: For how to easily help several families a year pull out of poverty in third world countries, see http://www.WantToKnow.info/051023microcredit

So many super-rich Americans evade taxes using offshore accounts that law enforcement cannot control the growing misconduct, according to a Senate report that provides the most detailed look ever at high-level tax schemes. Cheating now equals about 7 cents out of each dollar paid by honest taxpayers, as much as $70 billion a year, the report estimated. "The universe of offshore tax cheating has become so large that no one, not even the United States government, could go after all of it," said Sen. Carl Levin, D-Mich., whose staff ran the investigation. The report details how the Quellos Group, a tax shelter boutique based in Seattle, "concocted a tax shelter" using $9.6 billion "worth of fake securities transactions that were used to generate billions of dollars of fake capital losses." When investigators asked for trading records, Levin said, they were first told the trades were private, over-the-counter transactions. He said investigators asked for trading tickets or other evidence of who owned the $9.6 billion worth of stock and were told the stocks were never owned by the parties involved. "They just wrote down numbers on paper and claimed losses," he said. "It was just like fantasy baseball, except the taxes not paid were for real."

Note: Up to $70 billion is lost to the U.S. Treasury each year, yet law enforcement "cannot control" the problem. Hmmmm. If just $10 million were directed to stop the losses, I suspect things might change and the investment would be paid back many fold. Could pressure from high places be preventing such an investigation?

Income inequality used to be about rich versus poor, but now it's increasingly a matter of the ultra rich and everyone else. New figures show that from 2003 to 2004, the latest year for which there is data, the richest Americans pulled far ahead of everyone else. In the space of that one year, real average income for the top 1 percent of households...grew by nearly 17 percent. For the remaining 99 percent, the average gain was less than 3 percent, and that probably makes things look better than they really are, since other data...indicate that the average is bolstered by large gains among the top 20 percent of households. The top 1 percent of households enjoyed 36 percent of all income gains in 2004, on top of an already stunning 30 percent in 2003. A recent study done for the Business Roundtable(pdf)...shows that median executive pay at 350 large public companies was $6.8 million in 2005. According to the Wall Street Journal, that's 179 times the pay of the average American worker. The study's calculation of executive pay is widely criticized as an understatement. In 2003, the latest year for which figures are available, the top 1 percent of households owned 57.5 percent of corporate wealth. The top 10 percent of households had 46 percent of the nation's income. The top 1 percent of households had 19.5 percent. [For] the bottom 60 percent, average income grew by [a total of] less than 20 percent from 1979 to 2004, with virtually all of those gains occurring from the mid- to late 1990's. Before and since, real incomes for that group have basically flatlined.

Note: For a related New York Times article on how the current administration is planning to eliminate the jobs of nearly half of the lawyers at the Internal Revenue Service who audit tax returns of some of the wealthiest Americans, click here.

The average American house size has more than doubled since the 1950s; it now stands at 2,349 square feet. Whether it's a McMansion in a wealthy neighborhood, or a bigger, cheaper house in the exurbs, the move toward ever large homes has been accelerating for years. Consider: Back in the 1950s and '60s, people thought it was normal for a family to have one bathroom, or for two or three growing boys to share a bedroom. Well-off people summered in tiny beach cottages. Now, many of those cottages have been replaced with bigger houses. Six-room apartments in cities like New York or Chicago have been combined. Is it wealth? Is it greed? Or are there more subtle things going on? "Big picture is, they are fueling the local economy," says Pat Trunzo, a local builder. Trunzo says there's a different mindset among the wealthy today, compared to when his father started the family business. "Most of the big houses were visible from the road," he says. Now ... the wealthy "want their own private little enclave. And they don't even want the general public to know that they are there." For Trunzo, it's just a bit strange. But for John Stilgoe, a professor ... at Harvard University, it's emblematic. "The big house represents the atomizing of the American family," he says. "Each person not only has his or her own television - each person has his or her own bathroom. The family members rarely have to interact. And the notion of compromise is simply out one of the very many windows these houses sport."

Note: The year after this article was published, big banks were profiting immensely from record numbers of home foreclosures. The year after that, Wall Street was given a massive taxpayer-funded bailout.

Chief executive officers in the United States earned 262 times the pay of an average worker in 2005. In fact, a CEO earned more in one workday than an average worker earned in 52 weeks, said the Economic Policy Institute in Washington, D.C. The typical worker's compensation averaged just under $42,000 for the year, while the average CEO brought home almost $11 million. In 1965, U.S. CEOs at major companies earned 24 times a worker's pay. In recent years, compensation has been a hot issue with shareholders who have been bombarded with news stories about chief executives who are given multimillion dollar bonus and pay packages even if shares have declined. The chief executives of 11 of the largest companies were awarded a total of $865 million in pay in the last two years, even as they presided over a total loss of $640 billion in shareholder value, a recent study from governance firm the Corporate Library, found.

Shareholders of Exxon Mobil Corp., whose departing chief executive got a $357 million retirement package, overwhelmingly rejected resolutions to rein in compensation at the company's annual meeting yesterday. Chairman and Chief Executive Officer Rex W. Tillerson said predecessor Lee Raymond deserved a $357 million retirement package that he received in January because he delivered record profits.

Note: So price gouging at the gas pumps brings record oil profits and one of the CEO's responsible gets hundreds of millions of dollars as a retirement gift. What kind of message does that send? Why didn't other major newspapers pick up this little "detail."

Stanford University and UC Berkeley have joined a trend among the nation's elite universities and are developing centers dedicated to fighting poverty worldwide as economic inequalities grow ever starker. Both are fledgling efforts aimed at marshalling their respective academic forces...to tackle some of the most vexing and enduring problems facing humanity. A few universities, such as Harvard, have established track records in this arena, but a number of academics believe the trend is accelerating among major universities. Northwestern University and the University of Chicago have been running the Joint Center for Poverty Research since late 1996. Harvard established the Multidisciplinary Program in Inequality and Social Policy a couple of years later. In 2002, the University of Michigan created the National Poverty Center, which is largely funded by the U.S. Department of Health and Human Services. Last year...Princeton University started the Global Network on Inequality. Capitalism...has been immensely successful in generating high-GNP societies, but one side effect has been "massive inequality (that) can be debilitating." Poverty and inequality have always plagued the world, but that doesn't mean universities can't develop new ways of solving the problems, said Stanford's Grusky. "It's time again to think in ways that are utopian...and imagine systems that are different from the ones we have."

Note: For two excellent articles on tackling poverty and how you can make a difference:
http://www.weboflove.org/051023microcredit - Breaking the Cycle of Poverty: Microcredit and Microfinance
http://www.time.com/time/archive/preview/0,10987,1034738,00.html - Time magazine "The End of Poverty"

Millionaires and middle-class Americans now pay taxes at almost the same rates. Lower tax rates have contributed to huge increases in the wealth of the wealthy, but so far most people haven't seen significant economic improvement. [The] latest three-year examination of family finances found that average family income fell by 2% between 2001 and 2004. In the previous three-year period, average family income grew by 17%. Thanks to more credit card debt and borrowing against their homes, the 25% of Americans at the bottom of the wealth scale had negative net worth in 2004. The first federal tax code specified a maximum rate of 7%, but after the U.S. entered the war in 1917, Congress boosted the top rate to 77%. The 1986 tax overhaul brought the top rate to 28% in 1988, its lowest level since 1931. President Bush has achieved something close to the flat-rate structure by cutting tax rates on earned income and particularly on dividends and investment profits. Although the top tax rate is 35%, nobody pays that percentage. People with income between $500,000 and $1 million owed the same share of their income... -- 22% -- as did taxpayers reporting at least $1 million in income. Taxpayers in the $100,000 to $200,000 range paid nearly the same rate, 20.6%. Those in the $50,000 to $75,000 range paid 17.4%; taxpayers in the $40,000 to $50,000 range paid 15.8%. During the previous seven economic expansions before the current one, employee compensation rose four times faster than corporate profits. In the current expansion, profits have risen three times faster than compensation.

A worldwide economic boom has yielded a record number of dollar billionaires in the past year, according to Forbes. Their number rose by 15%. Microsoft's Bill Gates tops the list for the 12th year running, with a net worth of $50bn (Ł29bn). The combined net worth of the 793 is $2.6 trillion and US billionaires account for just under half the amount. The figures were conservative estimates for different reasons. While New York has the highest number of resident billionaires with 40, Moscow is second with 25, and London comes third with 23. Steve Forbes, Forbes' chief executive and editor-in-chief, attributed the global rise in the number of billionaires to an economic boom.

Note: Yet a recent New York Times article shows that the income of 90% of citizens is basically stagnant or even decreasing. See http://www.WantToKnow.info/060306newsarticles#1

Highly educated workers have done better than those with less education, but a college degree has hardly been a ticket to big income gains. The 2006 Economic Report of the President tells us that the real earnings of college graduates actually fell more than 5 percent between 2000 and 2004. So who are the winners from rising inequality? It's not the top 20 percent, or even the top 10 percent. The big gains have gone to a much smaller, much richer group than that. A new research paper by Ian Dew-Becker and Robert Gordon of Northwestern University, "Where Did the Productivity Growth Go?," gives the details. Between 1972 and 2001 the wage and salary income of Americans at the 90th percentile of the income distribution rose only 34 percent, or about 1 percent per year. So being in the top 10 percent of the income distribution, like being a college graduate, wasn't a ticket to big income gains. But income at the 99th percentile rose 87 percent; income at the 99.9th percentile rose 181 percent; and income at the 99.99th percentile rose 497 percent. Should we be worried about the increasingly oligarchic nature of American society? Yes, and not just because a rising economic tide has failed to lift most boats. Both history and modern experience tell us that highly unequal societies also tend to be highly corrupt.

Note: If the above link fails, click here.

New government data indicate that the concentration of corporate wealth among the highest-income Americans grew significantly in 2003, as a trend that began in 1991 accelerated in the first year that President Bush and Congress cut taxes on capital. In 2003 the top 1 percent of households owned 57.5 percent of corporate wealth, up from 53.4 percent the year before, according to a Congressional Budget Office analysis of the latest income tax data. The top group's share of corporate wealth has grown by half since 1991, when it was 38.7 percent. In 2003, incomes in the top 1 percent of households ranged from $237,000 to several billion dollars. For every group below the top 1 percent, shares of corporate wealth have declined since 1991. Long-term capital gains were taxed at 28 percent until 1997, and at 20 percent until 2003, when rates were cut to 15 percent. The top rate on dividends was cut to 15 percent from 35 percent that year. The White House said it did not believe that the 2003 tax cuts had much influence on wealth shares.

Making tiny loans to poor entrepreneurs in developing countries has long been a popular charitable cause, but it is now gaining traction as an investment. Microfinance, as these loans are known, is aimed at lifting some of the world's most destitute people out of poverty by providing seed money for small businesses. Funding for the loans traditionally has come from charities and government-aid organizations. Now, an increasing number of private funds are steering capital to microfinance. Many of the new investment instruments have been launched by nonprofit organizations long involved in the industry, including Grameen Foundation USA, the Foundation for International Community Assistance, both in Washington. Microfinance investing got a boost this fall when eBay Inc. founder Pierre Omidyar and his wife, Pamela, gave $100 million to Tufts University to create a fund that invests in microfinance vehicles. Microfinance investment funds...lend money for small-scale businesses, such as vending fruit, weaving shawls or operating small farms in poor countries around the world. Calvert Foundation offers Community Investment Notes, which require a minimum $1,000 investment, and can be earmarked to invest in developing countries or other initiatives, including post-Katrina recovery on the Gulf Coast.

Note: Microfinance is one of the most empowering movements in the world. When we let go of our fears around finances and put our money where our heart is, we invite major transformation into both our personal lives and our world. For how to get involved, see http://www.WantToKnow.info/051023microcredit

Several major media articles have sung the praises of microcredit, also known as microfinance and microlending: New York Times: Tiny Loans Make a Big Difference in Lives of Poor; Wall Street Journal: A new way to do well by doing good; BusinessWeek: Microfinance funds lift poor entrepreneurs—and benefit investors; The Economist: Microcredit in India, High finance benefits the poor; Excellent general article in Time magazine titled "The End of Poverty" CNN/Associated Press: Bankers for poor win peace Nobel. Without donating a penny, you can help to break the cycle poverty in a very real way. Microcredit investments are not donations or charity. Like other investments, the money is always yours. You even earn a small amount of interest. Yet for every $1,000 you invest, several entire families in the developing world can be pulled out of poverty every year. That is part of the reason why the United Nations declared 2005 to be the International Year of Microcredit and why the individual and group who originated the microcredit concept were awarded the Nobel Peace Prize in 2006. To download a free 24-page guide to microcredit and community investing, click here.  And note that these investments are not influenced at all by market fluctuations.

Note: For more detailed information on this incredibly inspiring means of decimating poverty, click here.

The pharmaceutical industry is bracing itself for criticism when the film 'The Constant Gardener' opens next month. Away from the Hollywood script is a true story of how multinational drug companies took liberties with African lives with devastating consequences. Directed by Fernando Meirelles, of City of God fame, it is a thriller, a love story and a blistering attack on the drugs industry and the way it carelessly expends the lives of innocent citizens in the Third World in the quest for billion-dollar medicines to sell to the first world. After the credits roll, a note from John Le Carré appears on screen that reads: "As my journey through the pharmaceutical jungle progressed, I came to realise that, by comparison with the reality, my story was as tame as a holiday postcard." The film features two brutal killings, a savage beating, a campaign of harassment, intimidation and threats. The crimes of the pharmaceutical industry - from the price protection of Aids drugs which have denied life-saving medicines to millions, to the cover up of lethal side effects to protect profits - are well documented. The companies are not obliged to disclose a lot of information about how they test or make their drugs. There's big, big money involved. Editors of medical journals including The Lancet and The Journal of the American Medical Association had come under pressure not to publish data or to change it. The bigger scandal...lies in the rapacious pricing of the pharmaceutical industry that puts lifesaving drugs out of reach of individuals, hospitals and even nations.

President Bush issued an executive order Thursday allowing federal contractors rebuilding in the aftermath of Hurricane Katrina to pay below the prevailing wage. In a notice to Congress, Bush said the hurricane had caused "a national emergency" that permits him to take such action. Bush's action came as the federal government moved to provide billions of dollars in aid. The administration is using the devastation of Hurricane Katrina to cut the wages of people desperately trying to rebuild their lives and their communities.

Mullen has a schoolteacher's kindly demeanor, so it was jarring to hear him say he suspected that the levee breaks had somehow been engineered to keep the wealthy French Quarter and Garden District dry at the expense of poor black neighborhoods...a suspicion I heard from many other black survivors. And it was surprising to hear Mullen's gentle voice turn bitter as he described the scene at the convention center, when helicopters bringing food didn't even land and the soldiers "just pushed the food out like we were in the Third World." I literally stumbled into the Rev. Jesse Jackson. He looked genuinely shaken, [saying] "this looks like the hold of a slave ship."

E-mailers sent me copies of two news photos that revealed an apparent double standard regarding black and white flood victims in New Orleans. One of the images, shot by photographer Dave Martin for The Associated Press, shows a young black man wading through chest-deep waters after "looting" a grocery store, according to the caption. In the other, taken by photographer Chris Graythen for AFP/Getty Images, a white man and a similarly light-skinned woman also waded through chest-deep water after "finding" goods that included bread and soda in a local grocery store, according to the caption. Apparently, quipped a cynical blogger at Daily Kos, "It's not looting if you're white."

Note: For both photos and more on this disturbing story, click here.

It is no secret that the gap between the rich and the poor has grown, but the extent to which the richest are leaving everyone else behind is not widely known. The people at the top of America's money pyramid have so prospered in recent years that they have pulled far ahead of the rest of the population. They have even left behind people making hundreds of thousands of dollars a year. The share of the nation's income earned by those in this uppermost category has more than doubled since 1980, to 7.4 percent in 2002. The share of income earned by the rest of the top 10 percent rose far less, and the share earned by the bottom 90 percent fell. Under the Bush tax cuts, the 400 taxpayers with the highest incomes - a minimum of $87 million in 2000, the last year for which the government will release such data - now pay ... taxes amounting to virtually the same percentage of their incomes as people making $50,000 to $75,000. From 1950 to 1970 ... for every additional dollar earned by the bottom 90 percent, those in the top 0.01 percent earned an additional $162. From 1990 to 2002, for every extra dollar earned by those in the bottom 90 percent, each taxpayer at the top brought in an extra $18,000. An Internal Revenue Service study found that the only taxpayers whose share of taxes declined in 2001 and 2002 were those in the top 0.1 percent. Some of the wealthiest Americans, including Warren E. Buffett, George Soros and Ted Turner, have warned that such a concentration of wealth can turn a meritocracy into an aristocracy and ultimately stifle economic growth.

A Times survey of the state's largest companies shows that CEOs' pay is growing at a much faster pace than that of rank-and-file employees. The difference is even sharper at the top rungs of the ladder. The 10 highest-paid executives on this year's list earned 36.7% more than last year's top 10 — garnering a collective $467.5 million. That's enough to buy about 275 homes in Malibu or 1.5 million sets of golf clubs or two 747 jumbo jets. Although limited to California companies, the survey reflects a national trend: a widening chasm between the pay of chief executives and rank-and-file employees. CEOs at California's largest 100 public companies took home a collective $1.1 billion in 2004, up almost 20% from 2003. That compares with the 2.9% raise that the average California worker saw last year. The average CEO made 42 times the average worker's pay in 1980. That increased to 85 times in 1990 and is now over 300 times. Sometimes, executive pay soars even in bad years. Sanmina-SCI Corp., a San Jose telecommunications company with $12 billion in sales, lost money in 2003 and 2004. Yet Chief Executive Jure Sola scored a 1,500% hike in total pay during 2004, according to The Times survey. Sola was paid $19.8 million last year, while the company lost $14.9 million.

Important Note: Explore our full index to key excerpts of revealing major media news articles on several dozen engaging topics. And don't miss amazing excerpts from 20 of the most revealing news articles ever published.