Could America's Wealth Gap Lead To A Revolt?
All the talk about income and wealth inequality
over the last couple of years begs the question: Could the wealth gap lead to a revolt?
Regardless of your personal views on the minimum wage, the protesters may have a point. The disparity between the nation’s top earners and the bottom 80 percent has grown exponentially over the past three decades, and it’s been exacerbated by the Great Recession
For all the employment growth and claims by many that our economy is in recovery, most of those new jobs – six out of ten according to the Labor Department – are on the low end of the pay scale, which is already much lower than other first world countries. Meanwhile, the top executives of the fast food companies
at the center of this storm are among the highest paid in the nation.
However, what is striking is the vast disparity between what the average American believes
the wealth gap to be, and what it actually is. The reality in graphic form shows that the bottom 40% barely register, and the top 1 percent already own more of the wealth than most Americans think the top 20% should own in a fair society.
That leaves the bottom 80 percent with a meager 7 percent of the wealth, or, to look at it another way, the wealthiest 400
Americans have the same combined wealth of the nation’s poorest – more than 150 million people
, which is almost half the population. So, no matter how you slice it, when it comes to income and wealth in America
, the rich get most of the pie and the rest get the crumbs.As more Americans are confronted with evidence of this stark reality, the chances of social unrest increase.
In my last blog I analyzed the protests in Brazil
through the lens of human behavior, and an offshoot of equity theory
I call “perceived fairness”. In essence, people are willing to make financial decisions that are not in their own best interest in order to correct an unfair situation with another person. But that is in a one on one situation. Throw in the psychology of mob mentality
and it gets much worse.
So what does this say about the current economic reality of our own American pie? And how much more inequity do we need to see before the nation’s poorest, which is the vast majority, really revolt?
Aristotle was the first to state that inequality triggers a revolution
and that was certainly the case during the French Revolution
, when onerous taxes on the lower and middle classes enhanced the lives of the wealthiest aristocrats. The American Revolution was also about unfairness. Remember the rallying cry: “no taxation without representation
”? That was in response to Americans being taxed for the gain of British.
The key to this not happening here and now has always been our belief in upward mobility. As long as average Americans feel they can better their lives and rise up the social and economic ladder, they will work within the system
. But, more and more, we are seeing this possibility fading in America
Fortunately, we are an aspirational society, and even the poorest among us continue to dream of climbing to the next rung. As long as the power of hope
remains that anyone can better their life and grab the American dream
, the status quo will be intact. But, how much longer is there going to be enough of the pie for a growing segment of the middle to lower classes of the American population to split?
In Part II, I’ll discuss the burgeoning group of people in this country who have little hope outside of a life that’s on state welfare, and the danger this poses to society. I’ll also discuss the Samaritan’s dilemma
which dictates that, when given a hand out, there are two types of people: those who will use the helping hand to better their lot, and those who come to rely on that charity as a way of life.
Read ‘The Wealth Revolt, Part II: Food Stamp Nation’
.http://www.forbes.com/sites/dalearcher/ ... -a-revolt/