"From 1959 to 1973, the nation's economy per person grew 82 percent, and that was enough to drive the proportion of the poor population from 22 percent to 11 percent. But over the last generation in the United States, that simply hasn't happened."Growth has been pretty good, up 147 percent per capita. But rather than decline further, the poverty rate has bounced around in the 12 to 15 percent range -- higher than it was even in the early 1970s. Indeed, if you adjust for the higher number of hours worked, over the 1979 to 2007 period (selected to avoid the effects of the steep recession that began in 2008), hourly pay for the bottom 20 percent of households rose only 3.2 percent. Total; not per year.
"In other words, in nearly three decades, these lower-income workers saw no meaningful gain in what they were paid for an hour of labor. Their overall inflation-adjusted income rose a bit, but mainly because they put in more hours of work."
Neither the Financial Times nor the New York Times, it goes without saying, are opposed to the profit system. But it has become impossible even for the defenders of capitalism to disguise the growing gulf within American society.
The vast disparities in wealth so visible in America are not merely politically obscene and morally outrageous, they are economically irrational. The accumulation of untold riches by the top one percent (or 0.1 percent or even 0.01 percent, an ever-smaller fraction of the population), has become the principal factor in disorganizing the economy, depriving tens of millions of a decent livelihood and creating the conditions for a new and deeper financial crash.
While at least 25 million Americans are unemployed or working only part-time, when they want and need full-time work, corporate America is sitting on a cash hoard of more than $2 trillion, refusing to invest in new production or hiring new workers, and instead engaging in speculation and stock buybacks that are more profitable for the corporate CEOs. (Stock buybacks by non-financial corporations occurred at an annual pace of $427 billion in the first quarter, according to the Fed).
Similarly, US hedge funds and private equity firms have accumulated $1 trillion in unused cash, according to a recent report by Bain & Co. As one financier told the Washington Post last month in a moment of rare candor, "This private-equity game is just a game the rich play with the world's productive assets for their own benefit at everyone else's expense" There is no social or economic value to this activity."
The perspective of the World Socialist Web Site and the Socialist Equality Party goes beyond the redistribution of wealth, although that is a central element. Socialism means the complete reorganization of economic life, on a global scale, under the democratic control of working people. Economic decisions must be made on the basis of rational planning, determined by the needs of the people, not profit.
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