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Two Americas

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Headlined to H3 2/12/09

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As the manufacturing capacity of the American economy has declined over the decades, the growing gap between the rich and the poor in the United States has continued to grow, creating what one-time presidential candidate John Edwards referred to as "two Americas."

"One America does the work while another America reaps the reward," he said. "One America pays the taxes while another America gets the tax breaks."

Edwards was referring mainly to the difference in the quality of health-care and education seen between the rich and the poor in America. However, the most obvious example of "two Americas" is the growing gap between the very rich and the very poor.

The social stratification of America is a direct result of the decline of manufacturing jobs in the country and a growing threat to Democracy.

"As I've often said... this [increasing income inequality] is not the type of thing which a democratic society-a capitalist democratic society-can really accept without addressing," former Federal Reserve Chairman Alan Greenspan said in 2005.

Today, top executives make, on average, 100 times more than their employees. In the 1960s, that gap was just 30 times as much. It is no coincidence then that since the 1960s, America has added roughly 46 million jobs, while shedding over two million manufacturing jobs.

The gap between those at the very top and those at the very bottom of the socioeconomic scale is even more pronounced. In 2006, the 400 highest earning taxpayers in America made $105 billion in total adjusted gross income, for an average of $263 million each. Those making minimum wage in 2006 made approximately $13,100 for a difference of 20,000 to one.

In addition, a recent study by the Organization for Economic Cooperation and Development found that the U.S.' wage gap between the rich and the poor is greater than that of 30 other developed nations - including the United Kingdom, known for its class system with little upward mobility. Furthermore, the study found that America's wage gap is more fitting for an economically downtrodden nation like Russia or Turkey. The study found that the top 10 percent of earners in America made roughly $93,000 per year, while the10 percent on the low end of the scale made only $5,800 per year.

Americans have witnessed their wages stagnate, their purchasing power drop and their upward mobility virtually disappear because of a growing lack of manufacturing capacity. Manufacturing jobs pay-well, create wealth and make a tide that allow all boats to rise. If America is to close the gap between the rich and the poor, the haves and the have-nots, the country must once again focus on manufacturing. To do that, America will need to refocus its economic polices to emphasize production and exporting rather than the failed polices of today that feature "free trade" and importing.

 

Dustin Ensinger graduated from The Ohio State University with a Bachelor of Arts in Journalism and Political Science. He is a contributing journalist for EconomyInCrisis.org.
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