By Tajwar Khandaker.
Economic inequality was always going to be one of the banner items of the 2020 election. Bernie Sanders’ unexpectedly popular challenge for the Democratic nomination in 2016 was built on the acknowledgment of wealth disparity as America’s greatest domestic obstacle, and the success of his campaign rapidly moved the issue into the forefront of American politics. As the campaigns for this year’s election unfurled, it became obvious that the popular reaction to Sanders’ platform had not gone unnoticed; wealth disparity became one of the most-talked-about topics across the Democratic primaries. Whoever took home the Democratic nomination was going to need a clearly defined plan for combating it- whether through the intensive programs proposed by Elizabeth Warren and Sanders himself, or through more reserved means like those presented by Joe Biden. Yet after 4 years of incessant hype-building, the 2020 presidential election appears to be reaching a historic anticlimax. In the wake of an oddly uninspiring primary season which for all intents and purposes wrapped up in February, the global coronavirus crisis has further removed the stakes of the upcoming election from the American discourse. With uncertainty over how, if at all, voters will reach the polls in November and a complete stagnation of the campaign process, the election feels very much like an afterthought. The unfortunate reality however is that none of the issues that the primaries grappled with have gone, perhaps least of all economic inequality.
The coronavirus crisis has further widened the already vast chasm between the haves and have-nots in American society. Low-income Americans are more likely to contract, spread, and die from the disease- largely a result of the fact that many cannot afford the security bubble that the upper strata of the population can. Many of these individuals are those now labeled “essential workers”- risking the health of themselves, their families, and their communities, often with little to no additional compensation. Many can’t financially risk the option of not working. While 90% of Americans with incomes in the top quarter have paid sick leave, only 47% of those in the bottom quarter can say the same. As a result, those at the lowest rungs of the socioeconomic ladder can be up to twice as likely to die of the disease. The long-term economic hit taken by the working class is another can of worms, as millions of families find themselves without a steady source of income for the foreseeable future. As the virus pushes up the cost of living, lower-income families are harder pressed to make ends meet. Though Covid-19 has deepened and worsened wealth inequality in the United States, the virus certainly did not create it. The disparity of financial resources between the wealthiest Americans and the working classes has been rapidly building for decades. The super-rich has never been as super-rich, and as the collective wealth of the most successful Americans continually builds, the gap between them and the rest of the country has been widening frighteningly fast. Of course, in the back of their minds, most Americans already know this. The financial collapse of 2008 showed just how dangerous massive wealth disparity could be, as a handful of men with the deepest pockets in America momentarily crippled the world’s largest economy. The people responsible walked away almost entirely unscathed- but the rest of the country certainly didn’t. The ensuing recession was a painful reminder to the 99% just how different they had it from the 1%. The Occupy Wall Street movement of 2011 floundered mightily once they found their way into the national media’s spotlight, but in their moment under the sun, the group and their “We are the 99%” mantra triggered a discussion that had been glaringly absent in the mainstream conversation for far too long. The fact that more than 2/3s of America’s wealth belonged to its richest 5% struck a nerve with much of the country; prompting discussion, albeit short-lived, on a national scale. Though the issue lost traction as a talking point compared to other hot button topics, the problem has only grown.
The collective wealth of the richest 400 people in America has QUADRUPLED since 1980
The collective wealth of the bottom 60% has been cut by more than half
The wealthiest 1% of Americans take 22% of all new national income
The 3 richest men in America hold more wealth than the bottom 50% of the nation combined
The median black family owns 2% of the wealth of the median white family- half as much as they did in 1983
Meanwhile, the wealth of the median white family INCREASED by 33%
The Average CEO earns 361 times what the average worker does- compared to 20 times in 1965
Income inequality is at the worst it’s been since 1928- immediately preceding the Great Depression. Yet after the Great Depression, the trend started to reverse, with a steady rise in the average incomes and holdings of the majority of Americans while those of the super-rich steadily decreased till the 80s. Worryingly, that doesn’t seem to be the case this time around- since the economic crisis of 2008 and the ensuing recession, wealth inequality has only continued to climb in the US- reaching levels perilously close to those of the Roaring 20’s. Exactly a century later, the landscape of American wealth distribution looks frighteningly similar. In 1929, the top 0.1% of Americans held about 25% of the nation’s wealth. Today that number is almost identical for the first time since, with somewhere between 23-25% of national wealth held by the top 0.1%. In It doesn’t take too much digging to see why; adjusted for inflation, the average salary in America has been relatively stagnant for 50 years, while that of the average CEO has increased by 1000%. The richest Americans, most often those at the heads of major corporations which employ tens of thousands, have increased their share of profits on an unthinkable scale practically without touching the wages of their employees. It’s not so easy as to say the rich have simply been working harder than the rest of the population- it’s that they’ve added to their wealth while forcibly stagnating opportunities for the growth of the middle and lower classes. The federal minimum wage in 1968 had a purchasing power of $12 in 2019; meanwhile, the federal minimum wage today is only $7.25. The stagnancy of wages for the average American is one of the greatest problems at the heart of the country’s troubles, with cascading effects reaching into the purchasing power of the general population, healthcare, and homeownership. As the cost of housing, commodities, and services have risen significantly, the amount most American’s make from their paychecks has not.
These inequalities are magnified dangerously in minority communities, with African American and Latino families suffering the biggest setbacks in wealth over the past 30 years compared to the rest of the population. Many of the most integral parts of the American dream are out of the reach of the average American today, and as they slip away so does the faith of millions of Americans in the political establishment. It was that lack of faith that spurred many Americans to vote for Donald Trump- not necessarily as an embrace of bigotry and hatred, but as a desperate grab at anything different, anything with a shot to change the status quo of the past 30 years. Of course, that hasn’t been the case- the current administration’s term has only seen a sharper uptick in wealth disparity, spurred no doubt in part by changes to the tax code that allow the super-rich to pay even less than they already did. Things still have yet to improve for all but the wealthiest Americans. At the heart of the American dream lies the idea that everyone can have a standard set of comforts- a home, a family, a disposable income. A strong middle-class numbering in the tens of millions was America’s biggest point of economic pride- not the wealth of a handful of its most privileged individuals. Election trends over the past 4 years have shown a clear and marked interest in closing the wealth gap from Americans across the political spectrum and across the country, as the popularity of ideas like a wealth tax and regulated wage growth gains traction. Even so, the possibility of the can being kicked four years down the road seems very real once again. Elizabeth Warren and Bernie Sanders, the two candidates campaigning hardest against wealth disparity, lost their place in the primaries soon after Super Tuesday and former vice president Joe Biden will presumptively carry the standard of the Democratic party in its second clash against Donald Trump. It’s hard to say what Biden’s stance on the issue will be. Though the former senator from Delaware has been unwilling to fully endorse the measures offered by the more liberal wing of the party, such as Sanders’ healthcare plan and Warren’s taxation program, it’s not out of the question to think that he might incorporate the ideologies of both into his platform going forward. The extent to which he does so, if at all, is still unknown. One way or another, the American people’s verdict on his stance will be resounding. Whether it begins with Biden or at the hands of another leader down the road, the change that needs to be implemented will not be easy. A massive overhaul of the American system will be required- changes that will certainly be opposed by the most influential entities and individuals in the country. Perhaps the only comfort we can draw from history is the fact that we’ve done so once before. The last time around, it took the Great Depression to spark a shift. Perhaps this time Covid-19 will play a similar role in forcing the hand of change. It remains to be seen whether or not we find someone to play F.D.R’s part.