Page 13 - Provoke Magazine Vol2

How exactly are the rich continuing to get richer? A 2017 Bloomberg article titled “How the Top 1% Keeps Getting Richer” points to equity as a major factor. Wealthy business- people like Bill Gates and Mark Zuckerberg are so wealthy because they own a large portion of stock in their own business(es). Equity is risky, but it does have an “unlimit- ed upside” that can make the wealthy into super wealthy. If business is booming, the rich tend to win bigger than those in the lower class due to a higher share in equity. So, if it wasn’t equity, what were the average Americans invested in during the most recent recession? In “99% v 1%: the data behind the Occupy movement,” The Guardian explains that before the crash the middle class had “65% of their wealth tied up in their house,” “but the richest 1% kept most of their wealth tied up in stocks and shares.” So, when housing pric- es dropped, guess who it affected the most? The bottom 99 percent. The article also states that the way our economy and tax laws are set up, people who earn more, save more. Things like estate tax allow the super wealthy to save more than the middle class, and this only leads to the rich getting richer, thus greater economic inequality.
So how is economic inequality hurting the top one percent? In a 2018 Washington Post article titled “How rising inequality hurts everyone, even the rich,” Chris- topher Ingraham suggests that, according to studies, income inequality hinders economic growth, which ultimately hurts income growth for everyone. Not only does it affect us all financially, but this inequality also has some social implications, like how it has been linked to higher levels of violent crimes, burglaries, drug use and other issues that affect the entire public.
Another striking fact from Ingraham’s article is that “In 2014 the Organisation for Economic Co-operation and Devel- opment, a collective of the world’s 35 wealthiest countries including the United States, found that rising inequality in the United States from 1990 to 2010 knocked about five percentage points off cumulative GDP per capita over that period.” One reason for this is the fact that children from poorer socio-economic backgrounds are unable to afford to go to pricey educational institutions that often lead to higher paying jobs. Not only that, but because these children aren’t able to afford the education they need to succeed and earn as much as they potentially could, they are also unable to afford many of the luxury products that are being offered by the millionaire and billionaire businesspeople at the top. Be- cause of reasons like these, Ingraham states that economists are realizing that minimizing the income gap will make it so we can all earn more.
In The Guardian’s aforementioned 2011 video, they report- ed that there were roughly three million millionaires in the US and 400 billionaires, and those numbers have no doubt gone up since then. The three richest individuals in the coun- try “had a combined net worth higher than the combined budget shortfall for every state in the US.” The US economy did, and still does, favor those at the very top more than the lower 99 percent. It’s clear that this economic inequality has negatively affected all of us and will continue to unless major changes are made to stop it. Bloomberg’s 2017 article “How the Top 1% Keeps Getting Richer” points out that wealth distribution inequality will only continue unless we “find a way to more broadly distribute the upside offered by owning stock.” Perhaps this might be the next best step for securing a healthy economy in the future. Either way, something must be done before it’s too late.
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