Concentration Of Wealth In Fewer Hands

Let’s use this newspaper as an object lesson.

First, grab a pen or pencil. Write somewhere in the white space of this page your answer to a question: “What percentage of wealth in America is owned by the poorest 40 percent?”

First, let’s define wealth.

Wealth is the value of everything a family owns, minus any debts. Now, write down your answer: I estimate “X” percent of wealth belongs to the bottom 40 percent of Americans.

Now let’s create a newspaper graph to illustrate the distribution of wealth in America.

Let your mind see this half-sheet of newspaper as if it were a bar-graph, from left margin to right margin, six columns wide.

Let’s divide the page into five sections that represent the distribution of wealth inour nation.

Start at the left margin.

The amount of wealth owned by the bottom fifth of Americans would be a sliver of the page, just over one-tenth of an inch wide - about the width of two letters in a single word. The amount of wealth owned by the next fifth is about twice that amount - about the width of four letters.

So the wealth of the lower 40 percent of Americans’ doesn’t quite get you past the newspaper margin - 0.3 percent of the nation’s total wealth.

(Now, check your answer to the question at thebeginning of this column.

What percentage of wealth in America is owned by the poorest 40 percent?

Answer: 0.3 percent - not quite one-third of 1 percent.

How close did you come?)

The middle 20 percent of Americans have claim to 4 percent of our wealth.

That takes the newspaper graph about one or two letters into the first column.

Americans in the 60 percent to 80 percent bracket have 11 percent of our wealth, which is close to two-thirds of a single newspaper column.

The top-fifth claims 84 percent of America’s wealth. Start about twothirds into the first column, and give the rest of the page to the top 20 percent. That’s a picture of American wealth distribution.

Actually, wealth is a lot more concentrated than that. The top 1 percent dominates the income and wealth of the top10 percent. The top tenth of the 1 percent dwarfs the 1 percent. And they pay a lower tax rate.

Wealth and income has become more concentrated in fewer hands.

It didn’t used to be this way. During the 1950s and 1960s, the income (not wealth, but income) of the bottom 90 percent grew at twice the rate of those at the top. Since then growth for the 90 percent has been flat for decades.

For the last 30 years, income growth has been heavily weighted to benefit the top tenth of 1 percent.

They’ve exercised their power to create laws and regulations tilting policies to benefit the wealthy and super-wealthy - favorable inheritance taxes, overseas havens, low capital gains tax rates, financial deregulation, lower marginal tax rates.

Much of the energy behind the Occupy WallStreet movement is an instinctive American reaction against the concentration of wealth and power that has happened since the Reagan administration.

A recent survey by two behavioral scientists reaffirmed what most of us instinctively know: Americans are fundamentally fair.

Michael Norton of Harvard and Dan Ariely of Duke asked Americans to construct distributions of wealth that we would deem just. They showed participants three unlabeled pie charts.

One pie had five equal pieces - equal distribution of wealth from the richest to the poorest quintile.

Another pie illustrated the distribution wealth in the U.S. (though it was unlabeled). A third pie was between the two. (It actually represented the distribution of wealth inSweden. In Sweden the wealth from top fifth to bottom fifth is 18 percent, 36 percent, 15 percent, 21 percent, 11 percent.)

Ninety-two percent of the respondents preferred the Swedish pie over the American pie.

Responses were similar from Republicans and Democrats, rich and poor, young and old, male and female.

Wealth, income and power in America are fundamentally unfair right now. It’s time to change our tax and regulation polices to correct a 30-year trend that has favored the rich and the super-rich.

When 40 percent of our people only have 0.3 percent of our wealth and 1 percent of us have 35 percent, the system just isn’t working.

LOWELL GRISHAM IS AN EPISCOPAL PRIEST WHO LIVES IN FAYETTEVILLE.