During the 1920s, America grew increasingly unequal. By 1928, the richest 1 percent of families reaped one-fourth of all U.S. income. But the stock market crash and the Great Depression brought drastic change. America's wealth gap gradually narrowed during ensuing decades. By the late 1970s, the top 1 percent got only about 9 percent of American earnings.
However, since the Reagan-Bush era of the 1980s, relentless polarization has returned. Today, once again, the richest 1 percent get a quarter of U.S. income. Nobel Prize-winning economist Paul Krugman says a "Great Divergence" is pulling U.S. society apart.
"Inequality in America" was the title of a July essay by Robert Reich, who was President Clinton's labor secretary in the 1990s. He wrote:
"Each of America's two biggest economic crashes occurred in the years immediately following these twin peaks [of income inequality] -- in 1929 and 2008. This is no mere coincidence. When most of the gains from economic growth go to a small sliver of Americans at the top, the rest don't have enough purchasing power to buy what the economy is capable of producing."
Various factors cause the spreading gulf. Blue-collar work has been decimated by ever-advancing technology -- while the snowballing "Information Age" rewards educated specialists in brainpower careers. Fewer manufacturing workers are needed. Labor unions have shrunk to a mere 7.5 percent of America's private-sector work force. Lower-paying female jobs are fairly secure, while men have been laid off by millions.
Reich explained:
"The structural problem began in the late 1970s, by which time a wave of new technologies (air cargo, container ships and terminals, satellite communications and, later, the Internet) had radically reduced the costs of outsourcing jobs abroad. Other new technologies (automated machinery, computers and ever-more-sophisticated software applications) took over many other jobs (remember bank tellers? telephone operators? service station attendants?) By the '80s, any job requiring that the same steps be performed repeatedly was disappearing -- going 'over there' or into software."
While ordinary jobs dwindle, more pay goes to well-educated executives and professionals in thinking careers. The result is an ever-worse divide between haves and have-nots -- a harmful condition.
A new book, The Spirit Level, contends that happy societies are those with the greatest equality -- while severe inequality causes a welter of social evils. Reviewing the book, the London Timeswrote: "This is why America, by most measures the richest country on Earth, has per-capita shorter lifespan, more cases of mental illness, more obesity, and more of its citizens in prison than any other developed nation."
The best cure for inequality is burgeoning new industries that open multitudes of new jobs, creating widespread opportunity. President Obama hopes this goal will be achieved through "green energy" -- solar, wind, biomass, tidal and such fields. We hope he's right, and we hope the development comes quickly.
