Income Inequality News Stories

Excerpts of Key Income Inequality News Stories 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: This comprehensive list of news stories is usually updated once a week. Explore our full index to revealing excerpts of key major media news stories on several dozen engaging topics. And don't miss amazing excerpts from 20 of the most revealing news articles ever published.

George Ross is no longer an official member of the labor force. Out of work for the past two years, he didn't figure in the government's [latest] employment numbers. He's a "marginally attached" worker, although he doesn't see himself that way. Ross, 60, is among the 12.2 million Americans classified as "not in the labor force" by the Bureau of Labor Statistics, which compiles the monthly reports. Why? Because if they have been looking for a job for more than a year - but not in the past four weeks - they're considered "discouraged" - they just don't feel they can find a job. Or they're "marginally attached," those like Ross, who had to stop looking for other reasons, like family responsibilities. Or they're working fewer than 35 hours a week - their employer cut their hours, it's the best they can find - which means they're "part time for economic reasons" or "involuntary part time." None of them is counted, but if you added the 2.3 million "discouraged" and "marginally attached" to the 11.7 million officially unemployed, you'd have an unemployment rate closer to 9 percent - not the 7.5 percent reported [on May 3]. Add in the reluctant part-timers (7.2 million) and the rate jumps to 13.9 percent. For the long-term unemployed - those out of work for more than six months - like Ross and 4.4 million others, the prospects are especially daunting. The longer you're out of work the less likely prospective employers will even take a look at you. That goes double if you're older. A Government Accountability Office report last year found "employer reluctance to hire older workers as a key challenge" to reducing unemployment.

Note: For deeply revealing reports from reliable major media sources on extremes of income inequality, click here.

Former fashion jewelry saleswoman Rebecca Gonzales and former Chief Executive Officer Ron Johnson have one thing in common: J.C. Penney Co. no longer employs either. The similarity ends there. Johnson, 54, got a compensation package worth 1,795 times the average wage and benefits of a U.S. department store worker when he was hired in November 2011, according to data compiled by Bloomberg. Gonzales’s hourly wage was $8.30 that year. Across the [S&P] 500 Index of companies, the average multiple of CEO compensation to that of rank-and-file workers is 204, up 20 percent since 2009, the data show. Almost three years after Congress ordered public companies to reveal actual CEO-to-worker pay ratios under the Dodd-Frank law, the numbers remain unknown. As the Occupy Wall Street movement and 2012 election made income inequality a social flashpoint, mandatory disclosure of the ratios remained bottled up at the Securities and Exchange Commission, which hasn’t yet drawn up the rules to implement it. Some of America’s biggest companies are lobbying against the requirement. “It’s a simple piece of information stockholders ought to have,” said Phil Angelides, who led the Financial Crisis Inquiry Commission, which investigated the economic collapse of 2008. “The fact that corporate executives wouldn’t want to display the number speaks volumes.” The lobbying is part of “a street-by-street, block-by-block fight waged by large corporations and their Wall Street colleagues” to obstruct the Dodd-Frank law, he said.

Note: For deeply revealing reports from reliable major media sources on income inequality, click here .

You may think you know about Martin Luther King, Jr., but there is much about the man and his message we have conveniently forgotten. In the last year of his life, ... he announced what he called the Poor People's Campaign, a "multi-racial army" that would come to Washington, build an encampment and demand from Congress an "Economic Bill of Rights" for all Americans -- black, white, or brown. He had long known that the fight for racial equality could not be separated from the need for economic equity -- fairness for all, including working people and the poor. Read part of the speech Dr. King made at Stanford University in 1967, a year before his assassination and marvel at how relevant his words remain: "There are literally two Americas. One America ... is overflowing with the milk of prosperity and the honey of opportunity. In this America millions of work-starved men walk the streets daily in search for jobs that do not exist. In this America millions of people find themselves living in rat-infected vermin-filled slums. In this America people are poor by the millions." A new briefing paper from the advocacy group National Employment Law Project (NELP) finds there are 27 million unemployed or underemployed workers in the U.S. labor force. Five years after the financial meltdown, "the average duration of unemployment remains at least twice that of any other recession since the 1950s." Matter of fact, "In the past 30 years, compensation for chief executives in America has increased 127 times faster than the average worker's salary."

Note: For a great collection of quotes, audio, and video clips of King, click here. For powerful evidence his assassination was coordinated from the highest levels, click here. For deeply revealing reports from reliable major media sources on income inequality, click here.

Over the last two years, President Obama and Congress have put the country on track to reduce projected federal budget deficits by nearly $4 trillion. Yet when that process began, in early 2011, only about 12% of Americans in Gallup polls cited federal debt as the nation's most important problem. Two to three times as many cited unemployment and jobs as the biggest challenge facing the country. So why did policymakers focus so intently on the deficit issue? One reason may be that the small minority that saw the deficit as the nation's priority had more clout than the majority that didn't. We recently conducted a survey of top wealth-holders (with an average net worth of $14 million) in the Chicago area, one of the first studies to systematically examine the political attitudes of wealthy Americans. Our research found that the biggest concern of this top 1% of wealth-holders was curbing budget deficits and government spending. When surveyed, they ranked those things as priorities three times as often as they did unemployment — and far more often than any other issue. Our Survey of Economically Successful Americans [found that] two-thirds of the respondents had contributed money (averaging $4,633) in the most recent presidential election, and fully one-fifth of them "bundled" contributions from others. About half recently initiated contact with a U.S. senator or representative, and nearly half (44%) of those contacts concerned matters of relatively narrow economic self-interest rather than broader national concerns. This kind of access to elected officials suggests an outsized influence in Washington.

Note: For deeply revealing reports from reliable major media sources on the collusion between the US government and corrupt financial corporations, click here.

Today, the United States has less equality of opportunity than almost any other advanced industrial country. Study after study has exposed the myth that America is a land of opportunity. This is especially tragic: While Americans may differ on the desirability of equality of outcomes, there is near-universal consensus that inequality of opportunity is indefensible. The Pew Research Center has found that some 90 percent of Americans believe that the government should do everything it can to ensure equality of opportunity. The upwardly mobile American is becoming a statistical oddity. Economic mobility in the United States is lower than in most of Europe and lower than in all of Scandinavia. The life prospects of an American are more dependent on the income and education of his parents than in almost any other advanced country for which there is data. Latinos and African-Americans still get paid less than whites, and women still get paid less than men, even though they recently surpassed men in the number of advanced degrees they obtain. Discrimination, however, is only a small part of the picture. Probably the most important reason for lack of equality of opportunity is education: both its quantity and quality. After 1980, the poor grew poorer, the middle stagnated, and the top did better and better. A result was a widening gap in educational performance — the achievement gap between rich and poor kids born in 2001 was 30 to 40 percent larger than it was for those born 25 years earlier, the Stanford sociologist Sean F. Reardon found.

Note: The author of this article, Joseph E. Stiglitz, a Nobel laureate in economics, a professor at Columbia and a former chairman of the Council of Economic Advisers and chief economist for the World Bank, is the author of The Price of Inequality. For deeply revealing reports from reliable major media sources on income inequality, click here.

Syracuse University art professor Thomas Gokey earned his Master of Fine Arts degree five years ago, but remains chained to his alma mater by $49,983 of debt. Soon after he graduated, the grim prospect of indefinite payments inspired its own art piece. Gokey put his debt up for sale in reconstituted squares of shredded money from the Federal Reserve. This year, together with the activist group Strike Debt, he helped organize a bold "People's Bailout" called the Rolling Jubilee, which has raised over $465,000. Bringing that money to the marketplace where collections companies buy and sell debt for pennies on the dollar, Strike Debt intends to purchase about $9 million of Americans' medical and educational debt—and then cancel it. Strike Debt, which grew out of Occupy Wall Street, wants to foment conversation about the debt we rack up in pursuit of basic needs, and the industries that profit from that debt. Gokey is currently on a year-long unpaid leave from teaching to help organize the Rolling Jubilee and upcoming Strike Debt projects. Thomas Gokey: Since I'm an educator, I'm thinking about the ways in which my students and I seem to be getting taken advantage of. We look at how much it's costing each one of my students to take one of my classes, and how much I'm getting paid to teach the class. And we look at each other and think, why don't we just go hold our classes at the public library? Somebody's obviously making money off both of us, so can't we cut out that middleman and focus on education?

Note: For deeply revealing reports from reliable major media sources on income inequality, click here.

Incomes rose more than 11 percent for the top 1 percent of earners during the economic recovery, but not at all for everybody else. The numbers, produced by Emmanuel Saez, an economist at the University of California, Berkeley, show overall income growing by just 1.7 percent over the period. But there was a wide gap between the top 1 percent, whose earnings rose by 11.2 percent, and the other 99 percent, whose earnings declined by 0.4 percent. Mr. Saez, a winner of the John Bates Clark Medal, an economic laurel considered second only to the Nobel, concluded that “the Great Recession has only depressed top income shares temporarily and will not undo any of the dramatic increase in top income shares that has taken place since the 1970s.” Excluding earnings from investment gains, the top 10 percent of earners took 46.5 percent of all income in 2011, the highest proportion since 1917, Mr. Saez said, citing a large body of work on earnings distribution over the last century that he has produced with the economist Thomas Piketty of the Paris School of Economics.

Note: For deeply revealing reports from reliable major media sources on income inequality, click here.

Some rich countries are more unequal than others - and the United States more so than most. America has a higher degree of income inequality than almost any other developed country. Only three of the 34 members of the Organization for Economic Cooperation and Development rank higher - Chile, Mexico and Turkey. So why is the U.S. so much more unequal than its peers? The U.S. Congressional Research Service cited several potential reasons in a report earlier this year. One is that most other rich countries spend a bigger share of their national output on social programs, which tend to lessen income inequality. In Germany, public social spending accounted for 27.8 percent of gross domestic product in 2009, compared with 19.2 percent in the United States. A second factor is tax systems. A 2012 study by economists at the OECD found that, in general, the more a country spends on social programs, and the more progressive its tax-and-transfer system is, the more it can reduce income inequality. The U.S. is less effective at reducing inequality through taxes and benefits than the OECD average. Attitudes toward the poor may make a difference, some researchers say. A 2008 OECD study found that respondents in the United States and Korea were far more likely to say poor people were poor because they are lazy than did respondents in Nordic and Continental European countries. Recent studies ... have shown that Americans are now less likely to move into a class above their parents than are people in other rich countries.

Note: For deeply revealing reports from reliable major media sources on income inequality, click here.

Journalist Chrystia Freeland has spent years reporting on the people who've reached the pinnacle of the business world. For her new book, Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else, she traveled the world, interviewing the multimillionaires — and billionaires — who make up the world's elite super-rich. Those at the very top, Freeland says, have told her that American workers are the most overpaid in the world, and that they need to be more productive if they want to have better lives. "It is a sense of, you know, 'I deserve this,' " she says. "I do think that there is both a very powerful sense of entitlement and a kind of bubble of wealth which makes it hard for the people at the very top to understand the travails of the middle class." How are the super-rich ... different from the super-rich of the past — say, 1955? Well, there are many more of them, and they're a lot richer than they used to be. "One of the things which is really astonishing is how much bigger the gap is than it was before," she says. "In the 1950s, America was relatively egalitarian, much more so than compared to now." CEOs earn exponentially more now, compared with their workers, than they did 60 years ago. Freeland says she's worried about what she calls an inevitable human temptation — that people who've benefited from a mobile society, like America, will get to the top and then rig the rules to benefit themselves." You don't do this in a kind of chortling, smoking your cigar, conspiratorial thinking way," she says. "You do it by persuading yourself that what is in your own personal self-interest is in the interests of everybody else.

Note: For a fascinating excerpt from this book, click here. For revealing major media articles showing the stark gap between the uber-rich and the rest of us, click here.

Branko Milanovic is an economist at the World Bank. He first became interested in income inequality studying for his PhD in the 1980s in his native Yugoslavia, where he discovered it was officially viewed as a "sensitive" subject — which meant one the ruling regime didn't want its scholars to look at too closely. But when Milanovic moved to Washington, he discovered a curious thing. Americans were happy to celebrate their super-rich and, at least sometimes, worry about their poor. But putting those two conversations together and talking about economic inequality was pretty much taboo. "I was once told by the head of a prestigious think tank in Washington, D.C., that the think tank's board was very unlikely to fund any work that had income or wealth inequality in its title," Milanovic ... explained in a recent book. "Yes, they would finance anything to do with poverty alleviation, but inequality was an altogether different matter." "Why?" he asked. "Because 'my' concern with the poverty of some people actually projects me in a very nice, warm glow: I am ready to use my money to help them. Charity is a good thing; a lot of egos are boosted by it and many ethical points earned even when only tiny amounts are given to the poor. But inequality is different: Every mention of it raises in fact the issue of the appropriateness or legitimacy of my income." When the discussion shifts from celebratory to analytical, the super-elite get nervous.

Note: Excerpted from Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else by Chrystia Freeland. For revealing major media articles showing the stark gap between the uber-rich and the rest of us, click here.

The U.S. has gone through two recoveries. The 1.2 million households whose incomes put them in the top 1 percent of the U.S. saw their earnings increase 5.5 percent last year, according to estimates released last month by the U.S. Census Bureau. Earnings fell 1.7 percent for the 96 million households in the bottom 80 percent -- those that made less than $101,583. The recovery that officially began in mid-2009 hasn’t arrived in most Americans’ paychecks. In 2010, the top 1 percent of U.S. families captured as much as 93 percent of the nation’s income growth, according to a March paper by Emmanuel Saez, a University of California at Berkeley economist who studied Internal Revenue Service data. The earnings gap between rich and poor Americans was the widest in more than four decades in 2011, Census data show, surpassing income inequality previously reported in Uganda and Kazakhstan. The notion that each generation does better than the last -- one aspect of the American Dream -- has been challenged by evidence that average family incomes fell last decade for the first time since World War II. In this recovery it’s proved better to own stock than a house. For stockholders ... the value of all outstanding shares has soared $6 trillion to $17 trillion since June 2009, the recession’s end. Even after a recent rebound, the value of owner-occupied housing, the chief asset of most middle- income families, has dropped $41 billion in the same period, part of a $5.8 trillion loss in home values since 2006.

Note: For deeply revealing reports from reliable major media sources on income inequality, click here.

In the early 14th century, Venice was one of the richest cities in Europe. By 1500, Venice’s population was smaller than it had been in 1330. In the 17th and 18th centuries, as the rest of Europe grew, the city continued to shrink. The story of Venice’s rise and fall is told by the scholars Daron Acemoglu and James A. Robinson, in their book Why Nations Fail: The Origins of Power, Prosperity, and Poverty, as an illustration of their thesis that what separates successful states from failed ones is whether their governing institutions are inclusive or extractive. Extractive states are controlled by ruling elites whose objective is to extract as much wealth as they can from the rest of society. Inclusive states give everyone access to economic opportunity; often, greater inclusiveness creates more prosperity, which creates an incentive for ever greater inclusiveness. The history of the United States can be read as one such virtuous circle. But as the story of Venice shows, virtuous circles can be broken. Elites that have prospered from inclusive systems can be tempted to pull up the ladder they climbed to the top. Eventually, their societies become extractive and their economies languish. That ... is the danger America faces today, as the 1 percent pulls away from everyone else and pursues an economic, political and social agenda that will increase that gap even further — ultimately destroying the open system that made America rich and allowed its 1 percent to thrive in the first place.

Note: The author of this article, Chrystia Freeland, wrote the book Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else, from which this essay is adapted. For deeply revealing reports from reliable major media sources on income inequality, click here.

The rich got quite a bit richer this past year, according to this year's rankings of the 400 wealthiest Americans. Forbes magazine released its annual list on [September 19], and the combined net worth jumped 13% to $1.7 trillion in 2012, up from $1.5 trillion in 2011. The boost came thanks to the rising stock market and a rebound in real estate values - especially in cities like Los Angeles and New York. Microsoft founder Bill Gates remained at the top of the list, as his net worth rose $7 billion to $66 billion. His pal Warren Buffett, CEO of Berkshire Hathaway, also saw his net worth climb by $7 billion, which helped him retain the number two spot on the list with $46 billion. Another software mogul, Oracle CEO Larry Ellison, enjoyed the biggest increase in wealth of anyone on the list -- a jump of $8 billion. That put his net worth at $41 billion, ranking him No. 3 on the list. The average net worth of a member of the Forbes 400 hit $4.2 billion. That's the highest level it's been in at least a decade, according to the magazine, and up from $3.8 billion last year. The net worth cut off to make the list this year was $1.1 billion. Forbes said that 241 members of the 400 enjoyed an increase in their net worth, while only 66 members suffered a decline.

Note: For deeply revealing reports from reliable major media sources on income inequality, click here.

The world's super-rich have taken advantage of lax tax rules to siphon off at least $21 trillion, and possibly as much as $32tn, from their home countries and hide it abroad – a sum larger than the entire American economy. James Henry, a former chief economist at consultancy McKinsey and an expert on tax havens, has conducted groundbreaking new research for the Tax Justice Network campaign group – sifting through data from the Bank for International Settlements (BIS), the International Monetary Fund (IMF) and private sector analysts to construct an alarming picture that shows capital flooding out of countries across the world and disappearing into the cracks in the financial system. "This offshore economy is large enough to have a major impact on estimates of inequality of wealth and income; on estimates of national income and debt ratios; and – most importantly – to have very significant negative impacts on the domestic tax bases of 'source' countries," Henry says. John Christensen of the Tax Justice Network [commented] "Inequality is much, much worse than official statistics show, but politicians are still relying on trickle-down to transfer wealth to poorer people. This new data shows the exact opposite has happened: for three decades extraordinary wealth has been cascading into the offshore accounts of a tiny number of super-rich." In total, 10 million individuals around the world hold assets offshore, according to Henry's analysis; but almost half of the minimum estimate of $21tn – $9.8tn – is owned by just 92,000 people.

Note: Henry's report, entitled The Price of Offshore Revisited, is available here. For more on this, click here.

Emmanuel Saez is ... director of Berkeley’s Center for Equitable Growth. In 2008, on the cusp of the Great Recession, Saez co-authored a landmark study that revealed a stark gap between the earnings of America’s wealthiest households and the remaining 99 percent. Saez’s recent work shows that, while the recession initially reduced the income gap, postrecession gains have mostly gone to the top 1 percent. The extraordinary increase in income concentration in the United States from 2002 to 2007 was driven in large part by deregulation of the financial and real estate industries. The resulting real estate bubble triggered the 2008 recession. Evidence shows that progressive taxation is the most powerful tool for curbing income concentration. For example, from the Great Depression into the 1970s, when the U.S. had very high tax rates on top earners, the income gap was very small, and economic growth was incredibly strong. During the 1990s, incomes for the top 1% nearly doubled, while paychecks for the bottom 99% went up only 20%. Between 2002 and 2007 2/3 of all income gains went to the top 1%. In 2010, the first year of economic recovery, the top 1% captured 93% of income gains.

Note: For Prof. Saez's excellent study, "The Evolution of Top Incomes in the United States" click here.

Capitalism's recurring tendencies toward extreme and deepening inequalities of income, wealth, and political and cultural power require resignation and acceptance. [It] entails and reproduces a highly undemocratic organization of production inside enterprises. Believers insist that no alternatives to ... capitalist organizations of production exist or could work nearly so well. Of course, alternatives exist. The city of Arrasate-Mondragon, in the Basque region of Spain ... is the headquarters of the Mondragon Corporation (MC). MC is composed of many co-operative enterprises grouped into four areas: industry, finance, retail and knowledge. In each enterprise, the co-op members (averaging 80-85% of all workers per enterprise) collectively own and direct the enterprise. The largest corporation in the Basque region, MC is also one of Spain's top ten biggest corporations (in terms of sales or employment). And MC has expanded internationally, now operating over 77 businesses outside Spain. MC has proven itself able to grow and prosper as an alternative to – and competitor of – capitalist organizations of enterprise. MC worker-members collectively choose, hire and fire the directors, whereas in capitalist enterprises the reverse occurs. One of the co-operatively and democratically adopted rules governing the MC limits top-paid worker/members to earning 6.5 times the lowest-paid workers. In US corporations, CEOs can expect to be paid 400 times an average worker's salary – a rate that has increased 20-fold since 1965.

The average American family's net worth dropped almost 40% between 2007 and 2010, according to a triennial study released [on June 11] by the Federal Reserve. The stunning drop in median net worth -- from $126,400 in 2007 to $77,300 in 2010 -- indicates that the recession wiped away 18 years of savings and investment by families. The results ... highlight the marked deterioration in household finances brought on by the financial crisis and ensuing recession. Much of the drop off in net worth -- to levels not seen since 1992 -- was attributable to a sharp decline in housing values, the Fed said. In 2007, the median homeowner had a net worth of $246,000. Three years later that number had fallen to $174,500, a loss of more than $70,000 on average. Making matters worse, income levels also fell during the tumultuous three-year period, with median pre-tax income falling 7.7% as earnings from capital gains all but disappeared. The loss of income and net worth appears to have impacted savings rates, as the number of Americans who said they saved in the prior year fell from 56.4% in 2007 to 52.0% in 2010 -- the lowest level recorded since the early 1990s. Families in the top 10% of income actually saw their net worth increase over the period, rising from a median of $1.17 million in 2007 to $1.19 million in 2010. Middle-class families who ranked in the 40th to 60th percentile of income earners reported that their median net worth fell from $92,300 to $65,900 over the same time period.

Note: What this article fails to emphasize sufficiently is that while most people have lost vast amounts of wealth, the wealthiest 1% has grown incredibly richer even through the recession. Is something wrong here? For key reports from reliable sources on wealth inequality, click here.

A World Bank report shows a broad-based reduction in extreme poverty - and indicates that the global recession, contrary to economists' expectations, did not increase poverty in the developing world. The report shows that for the first time the proportion of people living in extreme poverty - on less than $1.25 a day - fell in every developing region between 2005 and 2008. And the biggest recession since the Great Depression seems not to have thrown that trend off course, preliminary data from 2010 indicate. The progress is so dramatic that the world has met the United Nations' Millennium Development Goals to cut extreme poverty in half five years before its 2015 deadline. That is contrary to the World Bank's own expectations. In a year-end 2008 report, the Washington-based development institution warned: "Unemployment is on the rise in industrial countries and poverty is set to increase across low- and middle income countries, bringing with it a substantial deterioration in conditions for the world's most vulnerable." But that did not happen. Surveys for 2010 show that the proportion of people in the developing world living in extreme poverty fell. That is because of strong growth in countries like Brazil, India and especially China, growth that helped buoy economies in Africa and South America.

The wealthy really are different from everyone else: They’re more likely to cheat, lie, and break the law. At least that’s the unflattering conclusion of a team of professors from the University of Toronto’s Rotman School of Management and the University of California, Berkeley, who ran a battery of tests involving more than 1,000 people, seeking to answer the question of whether being rich or poor influenced ethical behaviour. In results from seven separate studies, they found a consistent tendency among those they termed “upper-class” to be more likely to break the law while driving, take valued goods from others, lie in negotiations, cheat to increase their chances of winning a prize and endorse unethical behaviour at work. The reason for the ethical difference was simple. Wealthier people are more likely to have an attitude that greed is good. At first glance, it might seem more likely that poorer people would be more tempted to cheat or break the law, in order to improve their lot in life. But a growing body of research is coming to the opposite conclusion – that it’s people at the top of the income scale for whom honesty, integrity, and generosity seem to be a challenge. In the United States, for instance, despite the perception that the rich are great philanthropists, data show that upper-class households donate a smaller proportion of their incomes to charity than do lower-class families. Other research has found that those who are well off have a reduced concern for others.

88 million. That's how many working-age Americans don't have a job and aren't trying to find one. The increase in people dropping out of the labor market altogether skews the otherwise-positive unemployment numbers released last week. While the jobless rate fell to 8.3 percent in January - a three-year low - it doesn't [take into account] this army of nonworking Americans. The percentage of people participating in the labor market dropped to 63.7 percent last month, the lowest level since May 1983.

Note: This one small article reveals an astounding statistic the media and government are all but ignoring. The actual rate of jobless Americans is well over 30%. The U.S. government definition of unemployed covers only those who "do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work."

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