Category Archives: Income Inequality/Gap

Inequality of Wealth and the Role of Unions

Source: Jack Heyman, CounterPunch, Weekend Edition January 3-5, 2014

….The U.S. is the most unequal of all advanced industrialized countries because the political system here has shaped the economy in ways that have led to powerlessness of the working class. In short, both political parties, Democrats and Republicans, represent the same capitalist class interests. There is no mass party that represents the working class. Unions have the power to reshape the wealth gap between rich and poor to some extent by negotiating decent contracts and striking to achieve that, if necessary. But they’re not doing that. In countries like Spain, France, Greece and South Korea, unions have been fighting back and even organizing general strikes. But in the U.S., the trade union bureaucracy has cowered in the face of attacks against workers and, indeed, continues to support the twin party system….

How Education Pays Off for Older Americans

Source: Heidi Hartmann, Jeff Hayes, Institute for Women’s Policy Research, IWPR #C410, December 2013

From the abstract:
This report presents findings from an Institute for Women’s Policy Research (IWPR) analysis of the 2005-2009 American Community Survey data regarding the earnings of older men and women with different levels of education. The analysis was funded by the Alfred P. Sloan Foundation, and is part of IWPR’s on-going research concerning the economic status and security of older women and men.

Inequality: Government Is a Perp, Not a Bystander

Source: Dean Baker, Truthout, December 23, 2013

…In other words, the government quite deliberately structured our trade to put downward pressure on the wages of much of the labor force, while protecting doctors and other highly paid professionals from similar competition. Trade is just one of the many ways in which the government has redistributed income upward over the last three decades.

The subsidy for too big to fail banks, which makes the Wall Street crew incredibly rich, is another way that the government redistributes money to the top. Bloomberg estimated the size of this annual subsidy for the Wall Street gang at $80 billion a year, more than the government spends on food stamps….

466 Hours of Worker Overtime Equals One Hour of CEO Pay

Source: Dana Lime, NerdWallet, December 6, 2013

Workers with retail jobs might not be celebrating much this holiday season, given recent strikes against Walmart and McDonald’s over low pay and working conditions. Growing discontent over perceived pay inequality in the retail and fast-food sectors has prompted President Obama to support the Senate’s proposition to raise the current federal minimum wage of $7.25 to $10.10, an increase of 39%.

Using publicly available data from annual proxy statements and salary monitor site, NerdWallet Taxes examined the pay disparities at 100 fast-food and retail chains in the U.S. We selected 10 companies with the highest annual CEO pay and examined the hourly pay of sales associates at those companies.
McDonald’s And Starbucks’ CEOs Make More Than $9,200 An Hour
Source: Hayley Peterson, Business Insider, December 10, 2013

Pay Equity: Legislative and Legal Developments

Source: Benjamin Collins, Jody Feder, Congressional Research Service, CRS Report for Congress, RL31867, November 22, 2013

The term “pay gap” refers to the difference in earnings between male and female workers. While the pay gap has narrowed since the 1960s, female workers with a strong attachment to the labor force earn about 77 to 81 cents for every dollar earned by similar male workers. Studies have analyzed the earnings and characteristics of male and female workers and found that a substantial portion of the pay gap is attributable to non-gender factors such as occupation and employment tenure. Some interpret these studies as evidence that discrimination, if present at all, is a minor factor in the pay gap and conclude that no policy changes are necessary. Conversely, advocates for further policy interventions note that some of the explanatory factors of the pay gap (such as occupation and hours worked) could be the result of discrimination and that no broadly accepted methodology is able to attribute the entirety of the pay gap to non-gender factors.

The Equal Pay Act (EPA), which amends the Fair Labor Standards Act (FLSA), prohibits covered employers from paying lower wages to female employees than male employees for “equal work” on jobs requiring “equal skill, effort, and responsibility” and performed “under similar working conditions” at the same location. The FLSA exempts some jobs (e.g., hotel service workers) from EPA coverage, and the EPA makes exceptions for wage differentials based on merit or seniority systems, systems that measure earnings by “quality or quantity” of production, or “any factor other than sex.” The “equal work” standard embodies a middle ground between demanding that two jobs either be exactly alike or that they merely be comparable. The test applied by the courts focuses on job similarity and whether, given all the circumstances, they require substantially the same skill, effort, and responsibility. The EPA may be enforced by the government, or individual complainants, in civil actions for wages unlawfully withheld and liquidated damages for willful violations. In addition, Title VII of the 1964 Civil Rights Act provides for the awarding of compensatory and punitive damages to victims of “intentional” wage discrimination, subject to caps on the employer’s monetary liability.

The issue of pay equity has attracted substantial attention in recent Congresses. A number of measures, including bills that would provide additional remedies, mandate “equal pay for equivalent jobs,” or require studies on pay inequity, have been introduced in each of the last several congressional sessions. These bills include the Paycheck Fairness Act (H.R. 377/S. 84) and the Fair Pay Act (H.R. 438/S. 168) in the 113th Congress. This report also discusses pay equity litigation, including Wal-Mart Stores v. Dukes, a case in which the Supreme Court rejected class action status for current and former female Wal-Mart employees who allege that the company has engaged in pay discrimination.

Tales from a Tax Crit

Source: Dorothy A. Brown, Pittsburgh Tax Review, Vol. 10, No. 47, 2013

From the abstract:
My race and class analysis of tax policy has shown that while taxpayers of color are disadvantaged under our tax laws, so are many middle and low-income white taxpayers. The real winners are the Mitt Romney’s and Warren Buffett’s of the world — the real losers are the rest of us. Making our tax laws fairer and simpler would benefit not only taxpayers of color, but white taxpayers too. So instead of everyone being afraid of race scholarship in the area of tax, we should all embrace it.

Mobility and the Metropolis

Source: Patrick Sharkey, Bryan Graham, Pew Charitable Trusts, Economic Mobility Project, December 2013

From the summary:
This report shows that neighborhoods play an important role in determining a family’s prospects of moving up the economic ladder. Metropolitan areas where the wealthy and poor live apart have lower mobility than areas where residents are more economically integrated.
See also:
Press Release

The State of the Bank Employee on Wall Street

Source: Committee for Better Banks, 2013

From the summary:
The findings of this report raise major concerns that this is the tale of two banking industries – one of high paid executives and the other of struggling regular workers. Following are some key findings:
– While average wages have steadily declined on Wall Street since the financial crisis of 2008, the top fifty financial CEOs’ compensation collectively rose by 26% in 2010 and by 20.4% in 2011.
– Bank worker wages are so low that almost 1/3 of bank tellers receive some sort of public assistance nationwide.
– There are now 19,800 fewer people employed in the financial industry in New York City than before 2008.
– The Office of the State Comptroller estimates that every financial services position lost means two more in other industries are shed in New York City and that one job is lost
elsewhere in the state.

Low bank wages costing the public millions, report says
Source: Danielle Douglas, Washington Post, December 3, 2013

A Third of Bank Tellers Rely on Government Assistance, Study Says
Source: Karen Weise, Bloomberg Businessweek, December 04, 2013

Workers of the (finance) world unite – and unionize
Source: E. Tammy Kim, Al Jazeera America, December 3, 2013
New effort to organize low-wage bank workers in US targets entire industry

One New York for All of Us: Leveraging New York’s financial Power to Combat Inequality
Source: New Day New York Coalition, 2013

Key findings:
– The city and associated entities pay $160 million a year for bad deals with banks.
– The city, its pension funds, and the MTA pay $563 million in base Wall Street fees each year.
– New York City and State give banks subsidies worth about $300 million a year, without ensuring that New York City communities will benefit.
– Because their wages are so low, 39% of bank tellers and their family members rely on at least one public assistance program, at a total government cost of $112 million.
– During the past 5 years, foreclosures have cost New York City $1.9 billion in expenses and lost revenue.
Source: New Day New York Coalition, December 2013

America the Unequal: Origins and Impacts of a Policy Revolution

Source: Josh Bivens, Dēmos, 2013

This paper reassesses the origins and effects of the neoliberal policy revolution launched in the late 1970s. … This paper argues that growing inequality is not just the most salient economic fact of life for the vast majority of American families over the past generation; it is also a direct consequence of profound changes in economic policy, with systematic distributional implication. We begin by charting out the changes in policy that were undertaken, and then provide an examination of why these changes were proposed and (more importantly) what led to their adoption. The paper concludes by assessing what can be learned about policy impacts on the distribution of economic rewards, and by identifying the challenges and opportunities inherent in undertaking a political campaign to brake or reverse the rise in inequality …

The Economic Status of Women of Color: a Snapshot

Source: U.S. Department of Labor, Women’s Bureau, Fact Sheet, December 2013

Facts cannot completely describe the challenges faced by working women. But facts are important in painting a picture of the lives of working women and informing policies and actions needed. These fact sheets provide a picture of Black, Hispanic, and Asian working women in the United States in the following areas:

• women’s contribution to family income;
• unemployment and the effects of the recession;
• families in poverty;
• educational attainment and likelihood of unemployment;
• the impact of educational attainment on women’s pay;
• occupational distribution and impact on pay;
• the wage gap between men and women;
• the real cost of the wage gap; and
• the impact of the gender wage gap on the retirement income of older women. …