The rapid growth in income inequality in America over the past decade is alarming. It threatens our economic and social stability. The income disparity between the top rung and the bottom rung is stark and getting worse. The wealth disparity is even more pronounced. The plight of average Americans will erode trust in capitalism unless we adjust capitalism first. New rent control laws in New York are but one example of the tidal wave ahead.
Americans are struggling to make ends meet – honorable, willing-to-work Americans of all races and backgrounds who are operating at or below the poverty level. Teachers in California living in their cars who cannot afford rent. Former factory workers in small towns across the Midwest scrambling to sell their homes so they can move to cities, and children in blighted urban areas going to school each day more for the breakfast than the education. Those in the bottom ten percent of income earners are barely surviving, but if you think it’s a lot better for the working class and the middle class, you’re wrong. They have not witnessed any meaningful income gains for nearly two decades. The gains of recent years have nearly all accrued to the top 10 percent of income earners, and most specifically, the top 1 percent.
Moreover, intergenerational income mobility, which measures the possibility that a child will earn more than a parent, suggests that less than half of all Americans will outpace the income of their parents. That is different than a few decades ago when nearly all children could expect to earn more than their parents. To the poor, working class, and middle class – just about everyone other than the top 10 percent – this realization is disabling. After all, this is America.