Forum Post: Class Inequality ~ Class War on the Quiet Conceptual Front

Class Is a Five-Letter Dirty Word: The Lack of Class Consciousness in an Era of Record Inequality ~ the Conceptual Front

Friday, 01 February 2013 00:00 | By Anthony DiMaggio, Truthout |

Class Inequality: Until Americans' awareness catches up to the realities of the increasing US class divide, shrinking life opportunities for the majority and disappearance of social mobility, we will be unable to address the problems of high unemployment and economic stagnation.

It's no secret that inequality today is at its highest level since 1929. Countless commentators lament record high inequality as a danger to our society and to American prosperity - a point that even establishment papers like The New York Times are now acknowledging. In an October 2012 story, for example, the paper warned that " income inequality may take [a] toll on growth," and reported that " a growing body of economic research suggests that it might mean lower levels of economic growth and slower job creation in the years ahead."

Political scientists are focusing attention on the dangers of growing economic inequality as a threat to political participation. As income and wealth inequality increase, Americans are forced to work longer and longer hours to make ends meet. This leaves less time to pay attention to the news and the world around us, and it means that the poor and working class are less likely to follow politics, and less inclined to participate in basic civic obligations like voting. As political scientist Frederick Solt points out, it's no coincidence the United States has the highest levels of economic inequality in the first world, and the lowest level of political participation.1

(By Anthony DiMaggio and the Public Intellectual Project)

It's not difficult to understand the concerns of those who study this issue closely. Income inequality is at its greatest level since The Great Depression, with the top one percent of Americans capturing an astounding 93 percent of all annual income gains in the post-2008 era. This represents a dramatic acceleration of an already extreme trend from the 1980s through the 2000s, when the top one percent captured one-sixth of all income created, and the top 10 percent captured approximately one half of created wealth.

More than 30 years of extreme inequality in earnings have produced similar extremes concerning the concentration of wealth. Recent statistics suggest the top one percent of Americans hold 34.5 percent of all wealth. The top 10 percent hold 74.5 percent of all wealth, and the top 20 percent (one in five Americans) hold about 85 percent.2

Estimates for the rest of America are quite sobering as well: In the wake of the 2008 financial crisis, the bottom 40 percent of Americans are estimated to have zero percent of all wealth, while the bottom half hold a miniscule 1.1 percent.3

The dire state of income and wealth inequality has to do with more than simply earnings; It is also related to hidden taxes and costs that exist all around us. The Bush tax cuts account for much of the growth in inequality, as they were disproportionately directed at the wealthiest Americans. Research from the Economic Policy Institute suggests that by 2010, 38 percent of the Bush tax cuts were going to the richest one percent of Americans, while 55 percent were directed toward the richest 10 percent. This amounted to a massive subsidy for the wealthy (the 10 percent who make more than $170,000 a year), and to a disproportionate shouldering of the tax burden (compared to previous tax rates) for those who were not so lucky to get these large cuts.

Other hidden taxes take a major toll on the working and middle class too. The cost of food is a common complaint in that US food costs were exacerbated by extreme heat and weather events that resulted in double-digit growth in the cost of corn in the United States in 2012, amid the worst drought in more than a half-century.

Other mounting costs also operate as a tax on Americans; for instance, the escalating cost of higher education and health care. As The New York Times reported in October 2012, "In the last school year, tuition, fees, room and board averaged $38,589 at private colleges, up almost $15,000 from a decade earlier, according to the College Board. At public four-year colleges, the total bill came to $17,131, up more than $8,000."

Estimates of the cost of education vary by a wide margin, but all available figures suggest the cost has increased dramatically. Lower estimates suggest the cost of tuition at a four-year college or university, after controlling for inflation, increased by nearly 150 percent during the period from 1980 to 2011, while other estimates suggest a growth of tuition costs by more than 100 percent from 2000 to 2011 alone.(4) Similarly, available data suggests health care costs have grown radically, with one estimate suggesting a 700 percent increase in costs for private plans from 1969 to 2010.

The growth in cost of living and inequality is also a function of depressed wages. The United States lost roughly half of its manufacturing jobs between 1980 and 2010. These were high-paying jobs with strong union-based benefits that used to constitute the backbone of middle-class America. The assault on labor means that, while nearly one-third of Americans used to be a part of a labor union in 1945, that number fell to just over 10 percent by the late 2000s. As unions disappeared, so did the middle classe's share of income earned. Data from the US Census Bureau suggests that from the late 1960s to the late 2000s, there was a nearly one-to-one correlation between the decline in the percent of unionized Americans, and the decline in the share of all income that goes to the American middle class. Predictably, the share of income captured by the top one percent went up correspondingly during this period, as corporations dismantled domestic unions and the wage and benefit protections that accompanied them.5

Sadly, Americans are working longer and longer hours in the era of growing inequality. Bureau of Labor Statistics data suggests that the number of hours worked by married couples increased by about 20 percent from the early 1970s through the 2000s, despite the finding that the median family income stagnated, and despite a significant increase in labor productivity and corporate profits.6 These trends suggest that Americans' position has not stagnated; rather, most are in a much worse situation today because of growing health care, food and education costs, increased inequality, stagnating wages and increased work hours.

With the dramatic decline in the economic fortunes of most Americans, one would think that awareness of the growing class divide in the United States would be as pronounced as ever. Sadly, this is not the case. On one level, recognition of inequality and elite power is fairly high among Americans. For example, a December 2012 Pew Research Center poll found that 76 percent of Americans felt that "it's really true that the rich get richer while the poor get poorer." Similarly, a Pew survey from January 2012 revealed that 77 percent agreed "there is too much power in the hands of a few rich people and large corporations in the United States."

Results from the General Social Survey found that concern for inequality is longstanding, with approximately two-thirds of Americans regularly agreeing that "differences in income in America are too large" across the decade of the 2000s.

And yet, despite these findings, evidence suggests that Americans - while they are concerned about wealth inequality - are not sufficiently aware of the fundamental divide that exists within the American economic class system. Americans are concerned with growing inequality and with excessive corporate power, but they aren't aware of just how extreme the American wealth divide has become. This point was made clear in a 2011 Duke-Harvard study, which found that perceptions of inequality were far less extreme than actual inequality.

Surveying a nationally-representative sample of respondents, the study found that Americans thought that the wealthiest 20 percent retained 59 percent of all wealth, when in reality they held more like 84 percent (a 25 percentage point difference). Differences between perceptions and reality became even more extreme when comparing what Americans wanted the wealth distribution to look like, in contrast to what it looks like. Respondents said that the "ideal" wealth breakdown would allow the richest 20 percent just 32 percent of all wealth, compared to their actual 84 percent (an astounding 52 percentage point difference).

The above data suggest that Americans are not as aware of the chasm between haves and have-nots as they should be. If half of Americans share just 1.1 percent of all wealth, one would hope that most Americans would recognize this basic fact, as well as the reality that our country is increasingly divided between the haves (those who report some form of financial wealth) and the have-nots (those with zero financial wealth). Unfortunately, this is not the case for a strong majority of Americans. As of December 2011 (the last time the question was surveyed), the Pew Research Center found that nearly six in ten Americans (58 percent) rejected the idea that American society is " divided into two groups, the haves and the have-nots."

This finding seems all the more strange considering that just 46 percent of Americans categorized themselves as " haves," and nearly four in ten (38 percent) designated themselves as "have-nots" - strongly overlapping with the recent finding that 40 percent of Americans hold no financial wealth.

CONTINUED: http://www.truth-out.org/news/item/14205-class-is-a-five-letter-dirty-word-the-lack-of-class-consciousness-in-an-era-of-record-inequality