Economic Inequality Reemerges, Opportunity Withers

One recent study reported that the wealthiest 1 percent of American families own half the country's financial assets, such as stocks and bonds.

(SILVERTON, Ore.) - This political campaign season has witnessed vigorous debate on whether to make permanent tax cuts favoring the richest Americans. At long last, the spotlight has begun to shine on the resurgence of economic inequality, which is undermining the country's promise of being a land of opportunity.

Income inequality has been rising in the U.S. almost without interruption for the better part of three decades, returning to levels not seen since before the Great Depression. In the 1970s, the wealthiest 1 percent of American families collected a combined 9 percent of the nation's income. By 2005, the take of the wealthiest 1 percent had skyrocketed to 22 percent of all income.

Today, the nation's top 1 percent has an estimated yearly average income of $1.5 million each. Just to get into this elite group requires a yearly income greater than $466,000.

The rising tide that used to lift all boats is no more. In today's economy, only the largest yachts rise, while the rest are left behind.

Oregon's experience illustrates the point. From the late 1970s to 2005 the wealthiest 1 percent of Oregon families saw their income almost triple after adjusting for inflation. The typical family, on the other hand, saw virtually no change over the three decades. More recently, from 2002 to 2005, nearly all (97 percent) of Oregon income gains went to the richest 1 percent.

The degree of inequality is more pronounced when it comes to wealth -- the ownership of assets. One recent study reported that the wealthiest 1 percent of American families own half the country's financial assets, such as stocks and bonds.

Deliberate policy choices have, in large measure, enabled the concentration in wealth and income. Key among them has been the manic drive to cut taxes on the wealthy and corporations, on the theory that it would generate wealth that would trickle down. But instead, the money has gushed upward.

Changes to the tax structure have delivered a one-two punch that has staggered the middle class. With the wealthy and corporations no longer contributing their fair share, the public structures that foster opportunity -- the education system and the Oregon Health Plan, for instance -- have fallen into disrepair. And to maintain public structures even in their weakened state, the burden has increasingly shifted to the middle class and the poor.

If the middle class is on its knees, the poor remain flat on their backs or worse. The percentage of the population who are poor is the same as in 1980. Given Oregon's population growth since, today there are more poor Oregonians than ever before. Moreover, since 1980, the share of Oregon's working families with children who are poor despite their work effort has doubled.

The federal definition of poverty, however, masks the true extent of the problem. Economists generally agree that the federal definition is outdated, failing to take into account housing, transportation, health care, child care and other costs that make up an increasing share of a family's budget. The federal poverty line currently defines as poor a family of four making $21,200 a year or less. In reality, however, a family of four in Oregon would need at least twice that amount to make ends meet, several studies have noted.

No wonder, then, that opportunity has withered. In the U.S. today, only six out of every 100 children born to families in the bottom fifth in terms of income rise to the top fifth over the course of their life, according to a recent report by the Economic Mobility Project, a collaboration of four think tanks from across the political spectrum.

"The 'rags to riches' story," the report concludes, "is much more common in Hollywood than on Main Street."

Reawakening opportunity on Main Street America requires tackling inequality head on. And at minimum, that means restoring balance to our tax structure and reinvesting in our public structures.

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$Two Dollars March 6, 2008 10:15 am (Pacific time)

Marcy I make the same observations that you do. I see the glass half full, not half empty. We live in a nation that has developed the innate character of overcoming adversity for the common good.

Henry Ruark March 3, 2008 1:29 pm (Pacific time)

To all: Must add to note to NMom re that "bottomline protection": It is painful fact-now in whole daily newspaper field that many longtime vets filling pages with best-stuff are now out in cold, some after decades of experience, precisely because the daily corporate ownership cuts them off, sometimes with little warning and less compensation, simply to produce better Wall St. stock-perpetrator "good word" promoting stock price...tied to management holdings of same, thus madly motivating malignant self-protection. Try your "WORK HARD and you will ALWAYS WIN !"-line in any of those newsrooms,for real taste of reality. I know both from personal experience (NOT lately ! - 30 yrs ago, same situation) and that of many friends, now in that same leaky-boat...

Henry Ruark March 3, 2008 12:06 pm (Pacific time)

Marcy et al: No rational person wishes to deprive anyone of their success or of its rewards and Constitutional provisions are fully adequate protection. But there is a dangerous and desperate disparity building in our democracy due more to many more factors than most persons can manage on their own, destroying the equality of opportunity we vaunt here. "Deregulation", for example, now clearly seen as the major cause of economic rot via many economic distortions, is part of that lack of opportunity, imposed by corporate influence to fatter that bottom-line. "Globalization", conceived to aid developing nations, has now become an economic weapon whose consequences are heavy export of U.S. jobs --again to protect, preserve and fatten that same bottom-line. These are facts; feelings and uninformed opinions simply do not cut it vs the reality. See my first Comment for details, or ID to editor for depth documentation from files going back 50 years.

Henry Ruark March 3, 2008 10:19 am (Pacific time)

NMom: Have to add that proof of your very-smelly pudding is that name-smear via "socialist-communist in the making" --dead giveaway for the pervasive impacts of the now discredited GOP "noise machine" heavily funded by Far Right billionaires to kill off any progressive activities in politics by making "liberal" a "bad word" --and other assorted propaganda-based distortions of reality. If you wish full and solid documentation on that, ID-self to editor for PDFs knee-deep from here...collection started as printed/file in 50s...

Henry Ruark March 3, 2008 9:50 am (Pacific time)

NavyMom: Beg to differ, madam. Over 90-year span surely matching yours in diversity and variety of experience, I long ago learned the vapidity and deep error in what you state. Anyone living in the U.S. in the last thirty years has also experienced many examples, demonstrations, and many, many well-documented situations disproving your "WORK and you will ALWAYS WIN" distortion of reality. Ask any of those slashed from working lists recently by many corporations, after years of faithful devoted service, simply to fatten "the bottom line" with no thought of loyal service demanding other means to restore "competitive advantage --like doing without that fancy corporate jet costing thousands of dollars daily. Life ain't always fair, in this system and society, and your beliefs are based, as they must be, on your own fairly limited experience. Tell it to college students now facing huge debts to win for themselves same "equal opportunity" handed to other kids simply by good luck of parents with more piled pelf. Tell it to workers whose strong family-supporting jobs went overseas to lowcost labor paid in pennies per our dollars --simply for that same sacred "bottom line". Visit the Internet and learn more about real life !!

Marcy March 3, 2008 9:43 am (Pacific time)

When I drive on the freeway I see all these new and newer cars on the road. I go to the shopping malls and see all these people buying nice things. I went to Best Buy the other day, early, thinking I could get in and out faster, well there were maybe 50 people waiting ahead of me. Last summer I traveled in Europe and last January I was in Mexico for ten days. Big difference between what we have here and other places in the world. Even those people considered poor have a better life than most others on the planet. I have no problem with those who want to get ahead, that's the American dream for many, and the rich, why demean these people for being successful. Sure have a safety net, which we do, but to redistribute income which many want to do, and we will be no different than many other areas of the world.

NavyMom March 3, 2008 7:02 am (Pacific time)

Matt Johnson, you are too much. Another socialist/communist in the making. This is America, everyone has the same opportunities if they want to WORK for it. It is much easier to just get handouts. Having pride, dignity, self-respect, and the ability to take care of oneself and family is a disappearing idea.

Sawyer Johnson March 2, 2008 12:47 pm (Pacific time)

There sure is considerable inequality.

Matt Johnson March 1, 2008 3:57 pm (Pacific time)

NAVALAIRMOM, Glad I don't know you, glad I am not related to you. I wouldn't want a person like you in my life, you are inconsiderate of others who have less and believe that your personal approach to life is an example of how other people should live and be, but you really have no idea what causes people to live in poverty or how little control they generally have over it. There is a poison in the water that Americans drink and it is called greed. Pride is its accomplice, and if you only considered the pain in the world that you will occupy for one lifetime, you would not have such a hardened and calloused view toward others. Thank God for the OCPP and Salem-News.com for bringing us this vital information about what people (like this one) have done to what was once a decent and good place where everybody could survive if they were willing to work. Today the republicans have ruined our country, and they probably will again in the future. For now though it is our time and we will make people better off by being in control of politics and just stopping, banning these practices that eliminate the middle class and always add to the number of people who qualify as poverty stricken. I am sure this person doesn't care but maybe someday they will, people can find their true and real hearts if they desire to. Our mission as people is to love and help others, and seek the forgiveness of those who we harm.

Henry Ruark March 1, 2008 3:56 pm (Pacific time)

NAM et al: Bound to be exceptions, but accurate, authoritative, and fullscale studies by those who understand the numbers beat out any one-person experience, every time. (Sorry, m'am, but your experience simply does not cut it here.) The 1% number is precise and also accurate, as numerous studies nail down irrevocably. Fact is fact, denial for political and personal reasons does not change that fact in any way. What it means is just what OCPP report states. "Liberal" vs "conservative" has nothing to do with it; both parties are deeply guilty and public record shows much heavier costs, even deeper deficits, desperate demands forced by program cuts, were all multiplied under Reagan, Bush I and Bush II, too. I've always felt that the Laffer napkin-curve had to have been upside down --and when I asked Laffer that at press conference, he ignored the question --and left the podium. But we cannot, since we now stuck with the bills --and the monstrous interest costs piled on our kids and their kids, and very possibly the third generation also.

NAVALAIRMOM March 1, 2008 3:11 pm (Pacific time)

Oh, for Pete's sake!! My income is less than 40,000.00 per year and the tax cuts helped me...a lot!!! Don't give me that "only the top 1%" nonsense. Try getting all of the "tax and spend," "let us take your money and take care of you because you're not smart enough to do it yourself" liberals out of office. That oughta put things back on track!!

Henry Ruark March 1, 2008 10:28 am (Pacific time)

To all: This strong trend may well be the greatest threat to most of us we will ever face. Key comment above is: "Deliberate policy choices have, in large measure, enabled the concentration in wealth and income. Key among them has been the manic drive to cut taxes on the wealthy and corporations, on the theory that it would generate wealth that would trickle down. But instead, the money has gushed upward." That's "supply-side" impact from Reagan/Bush I/Cheney era, with Laffer-curve "on napkin" just possible "upside-down", with dollars leaking overseas to better-payoff, making the "trickle-down" into sad joke. See previous Op Eds on this "supply-side" impact, access in "Written by"-line in STAFF.

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Economic Inequality Reemerges, Opportunity Withers

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