The richest 5 percent in the United States now own 65 percent of the nation’s wealth–making the wealth gap even more unequal here than the already gaping income gap. A new report by Economic Policy Institute (EPI) cites foreclosures and falling housing values as contributing to the devastation of the net worth–the wealth–of millions of U.S. households.
Wealth, or net worth, refers to an individual’s or a family’s total assets, such as bank account balances, savings, and real estate, minus total liabilities, such as mortgages, debt, and outstanding medical bills. As EPI points out, “along with wages and income, wealth is another key measure of economic security and well-being since it strengthens a family’s ability to withstand job loss or other economic distress.”
As Les Leopold points out, recent debates over workers’ wages have missed the big picture.
Do public-sector workers earn more than private sector workers? Who cares? This boneheaded question has us fighting over the crumbs. (And the answer is no — all credible studies show that when you account for educational levels, the total compensation packages are about the same.)
The real question is: Why have most workers seen their standard of living stall over the last generation?
Leopold, executive director of the Labor Institute and Public Health Institute, points to one answer: workers’ productivity has vastly outpaced their income, meaning CEOs are raking in the wealth off our backs.
So, the wealth gap gets worse and so does the pay gap: The wage gap between the top 100 CEOs and workers jumped from $45 to $1 in 1970 to–hold your breath–$1,723 to $1 in 2006.
Lest we forget, some 16 million workers still are unemployed or underemployed, a grim scenario not likely to change unless corporations create more jobs–there currently are five job seekers for every one opening.