There’s an old English song, “It’s the rich what gets the pleasure. It’s the poor what gets the pain.” The song holds true today. We talk with Bill LaFayette, the owner of Regionomics, about the expanding wealth gap in America.
In 1980, the income of one percent of Americans was 23 times that of the other 90%. In 2022, the income of the top one percent was 69 times the income of the bottom 90%. In 1965, CEO compensation at the 350 largest publicly traded firms was 21 times the typical worker’s compensation. In 2023, CEO compensation was 290 times a typical worker’s compensation.
Some of the big differences between then and now was a much higher tax rate and more economic regulation. And then, things changed. Big business argued it was being hamstrung by regulations and persuaded Congress to loosen those regulations. Plus, we saw the birth of the trickledown theory, which benefitted the wealthy and did nothing for those of low income. The rich got richer, and the poor got left behind.
Contributing to wealth inequality is the legacy left by discrimination. Low-income neighborhoods, largely populated by minorities, were redlined by banks, making it impossible to buy homes and accumulate wealth. Though redlining was declared unlawful in the 1960s, its vestiges remain. The neighborhoods that were subjected to redlining are often the same neighborhoods that remain impoverished today.
Politicians don’t help. They’re influenced by those who can write checks, a luxury well beyond those at the bottom of the economic ladder.
Adding to the problem: low-income workers are often maligned as either lazy or living off the government dole, when, in reality, many are disadvantaged because of their zip code; they live in neighborhoods that lack resources, opportunities, safety and other benefits most of take for granted.
Listen to our conversation with Bill LaFayette.