Now, more than ever, the release of Forbes magazine’s annual list of the 400 wealthiest Americans is like salt in a fresh wound. But more than inspiring envy among a recession ravaged population, the list — and the gulf it reveals between the middle class and the rich — signals some troubling trends.
According to a series published in the online magazine Slate, the net worth of the 40 richest Americans grew by 8 percent in the last year, while the nation’s poverty rate has hit a 15-year high. The wealth of the super-rich grew despite an anemic economy and shaky stock market. Those 400 people collectively are worth $1.4 trillion, twice the total of the federal stimulus package.
Timothy Noah, who wrote the series for Slate, said the last time the nation experienced such extremes was in the 1920s, which of course preceded the Great Depression. It was during the depths of the Depression that misguided ideas like communism were increasingly palatable to an angry, desperate working class.
In the 1940s through the 1970s, the gap between the middle class and the wealthy was much smaller. Mr. Noah points to several factors for the widening gap, among them the decline of unions, which flourished in manufacturing businesses but are less successful in a service economy. He also reveals that technology — specifically, computers — has eliminated the sort of midlevel “thinking” jobs once held by the middle class. Tax policy plays a role, but that is not as clear-cut as may be thought. The middle-income earners did better during Democratic presidential administrations, Mr. Noah writes, but not by wide margins.
The opportunity to get rich is an important component of the American system, and it should remain so. But the widening gap between the super-rich and the rest of us should spur political and business leaders to action. If the middle class continues to work more hours each week yet ends up with less purchasing power, while the super-rich get richer, the economy will face some unhappy consequences.
Policies on taxes, education and other matters must begin to back toward helping the middle class, or the nation’s democratic ideals will be lost.