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economic inequality
The Best Black Economy in Generations Isn’t Enough
To overcome centuries of inequality, we’ll need dedicated public policy such as Investment in quality education, access to affordable healthcare, affordable housing, job creation, and Baby Bonds.
Sep 04, 2024
As the country moves rapidly toward the 2024 elections, Black Americans are experiencing the best economic conditions they’ve had in generations. Record low unemployment rates, record low poverty rates, and record high levels of income and wealth paint a picture of Black prosperity.
Yet African Americans remain mired in great economic insecurity, reflected in their low opinion of the economy, widespread asset poverty, and ongoing economic inequality between Black and white households.
The best Black economy in generations, in short, isn’t enough. To overcome centuries of inequality, we’ll need dedicated public policy.
Black median income today is still nearly $30,000 lower than the white median—it’s not even caught up with the white median income of 1972.
Let’s look at some numbers from a new report we put out for the Joint Center and the Center for Economic and Policy Research.
From 1972 to 2022, the annual Black unemployment rate averaged 11.6%. Last year, it averaged 5.5%, a historic low. That’s good news, but it’s barely put a dent in the gap between Black and white employment.
We calculate that Black America would need an additional 1.4 million jobs for Black people to be employed at the same rate as white people. This employment gap cost Black Americans roughly $60 billion last year compared to what they’d have made if those jobless individuals were working.
So for African Americans, the racial employment divide remains quite costly. Other indicators tell a similar story.
For example, Black median household income is also at its highest point in a generation, growing from about $41,000 in 2011 to nearly $53,000 in 2022—a nearly 30% increase. That same year, median Black wealth also reached a new high of nearly $45,000, more than double the post-Great Recession low of about $17,000.
Still, Black median income today is still nearly $30,000 lower than the white median—it’s not even caught up with the white median income of 1972. And the average Black median wealth of about $45,000 means the vast majority of African Americans fall well short of the $190,000 to $570,000 estimated as necessary to reach middle-class status.
Will these disparities correct themselves on their own? Not likely.
As the Institute for Policy Studies and the National Community Reinvestment Coalition found in their 2023 “Still A Dream” report, the nation is still moving at a glacial pace when it comes to bridging Black/white economic inequality. If the country continues at the rate it’s been moving since the 1960s, it will take over 500 years to bridge the racial income gap—and nearly 800 years to bridge the racial wealth gap.
So while Black Americans are experiencing significant economic gains, these advances are insufficient to overcome entrenched inequalities. The economic progress we see today is a foundation, not a finish line. It speaks to the need for comprehensive policies that address ongoing barriers to economic security and wealth-building.
Investment in quality education, access to affordable healthcare, affordable housing, job creation targeted to high-unemployment communities, and new publicly financed asset building opportunities like Baby Bonds are essential. These measures can help ensure that the economic gains of today translate into sustained prosperity and security for future generations.
As we approach the presidential election, let’s not make this election a contest between individuals but of policies that can heal our deep wounds of racial and economic inequality.
Addressing these issues with urgency and commitment will not only improve the economic outlook for Black Americans—it will create the basis for a more united country.
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A Note on Noam Chomsky and Climate Collapse
As Noam once said, “if you assume there is no hope, you guarantee there will be no hope.”
Aug 11, 2024
In many of his recent writings, Noam Chomsky has warned that humanity has reached a very dangerous point because we are now living in a world of cascading crises. Indeed, when we look around us, we see a global web of crises. Economic inequality is destabilizing democracies and making a mockery of the vision of a decent society; armed conflicts continue to mark human existence; and nuclear weapons and global warming threaten humanity’s survival. Meanwhile, we must feel aghast over the fact that cynicism and irrationality continue to define the mindset of the powers that be. This is precisely the reason why Chomsky has always seen activism as our only hope.
What’s happening in Gaza is an abomination, one that the leaders of this world are watching coldly from a distance. The same can be said about climate collapse, which is as real as the daily slaughtering of scores of innocent women and children in Gaza by Israel’s military. Our global institutions are incapable of doing anything meaningful about these crises. Real power is in the hands of the most powerful nation-states and their leaders have opted to turn a blind eye to both disasters so as not to disrupt business as usual. Profits and geostrategic interests take priority over human lives and the environment. This is as clear as day, and it has always been so since at least the emergence of capitalism and the rise of the nation-state.
The current conflict in Ukraine began on February 24, 2022, and peace remains as elusive as ever. The U.S. wants peace in Ukraine as much as Netanyahu wants to see a ceasefire deal in Gaza. The continuation of the war in Gaza is vital to the continuation of Netanyahu's political career. In fact, Netanyahu will most likely celebrate by uncorking a bottle of champagne if an all-out war exploded in the Middle East. He knows he can’t possibly lose with the U.S. backing Israel. The cost of an all-out war in terms of human lives, either Israeli or Iranian or Arab lives, is simply irrelevant to him--or to Washington. Or what another war might do to the environment. The war in Gaza is also a war on the environment; in fact, it is “a widespread and deliberate act of ecocide,” according to a study by Forensic Architecture.
Profits and geostrategic interests take priority over human lives and the environment. This is as clear as day, and it has always been so since at least the emergence of capitalism and the rise of the nation-state.
As Chomsky has pointed out, “ history is all too rich in records of horrendous wars, indescribable torture, massacres and every imaginable abuse of fundamental rights.” But the great man has gone to great lengths to stress that the climate crisis is “unique in human history” and, like nuclear weapons, can destroy organized human life as we know it. Yet, humanity spends annually trillions of dollars on weapons and the military but finds it economically unrealistic to devote the necessary funds to protect the earth.
So much for rationality.
Indeed, consider the global implications of the melting of the Antarctica sea ice. It may be winter in the Southern Hemisphere, but the Antarctica is experiencing a major heat wave that has made temperatures rise 50 degrees Fahrenheit above normal. This is the second major heat wave in Antarctica in the last two years. The entire planet has experienced more than 1.5 Celsius of warming in the 12-month period between July 2023 and June 2024, but Antarctica warms twice faster than the rest of the world, according to latest observations. If all the ice vanished, sea levels might rise by more than 150 feet.
It is no longer an issue of if but when major coastal cities will go under.
We already know that the super-rich and powerful don’t care about the rest of us, but it seems they also don’t care about the future of their own children and grandchildren. As Chomsky has underscored in some of the email exchanges that we’ve had, their self-gratification is even greater now that they know that the climate crisis is speeding toward catastrophe.
Indeed, as Copernicus Climate Change Service Director Carlo Buontempo recently said in connection with the new record set for the daily global mean temperature “we are now in truly uncharted territory…”
We already know that the super-rich and powerful don’t care about the rest of us, but it seems they also don’t care about the future of their own children and grandchildren.
And this brings us to the question of activism, which, as already pointed out, Chomsky sees as our only hope to save the planet. It’s our only way to stop carnages; our only way to stop the criminal negligence of climate collapse. We need the greatest possible degree of public mobilization for the purpose of exerting influence on policymakers. But without thoughtless methods like destroying works of art that turn the public against climate activism.
Moreover, Chomsky believes that we have the knowledge, money, and technology to transition from fossil fuels to alternative sources of energy that are clean, affordable and sustainable. This is why he feels that the Green New Deal is exactly the right idea and finds the Global Green New Deal initiative laid out by the progressive economist Robert Pollin particularly attractive.
As far as the link between capitalism and the climate crisis goes, suffice to say that Chomsky understands better than most the forces behind environmental degradation and climate collapse. The economic system of capitalism, especially during its neoliberal phase, drives climate breakdown. Global temperatures started increasing at an alarming rate after neoliberalism became the dominant economic force. Nonetheless, Chomsky is also fully aware of the fact that time is running out and we cannot wait for the end of capitalism before the planet can be saved. This is why he finds it so vital that we find ways to get the world off fossil fuels quickly and fairly. We must reach carbon neutrality no later than 2050. And do so in a just manner. For Chomsky, a just transition is imperative to building the political power that would bring about a shift from the fossil-fuel economy to a regenerative economy. Because, again, social activism is our only hope, according to what many have described as the “ world’s conscience keeper for nearly half a century.”
And, no, hope is not an option. As Noam once said, “if you assume there is no hope, you guarantee there will be no hope.”
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Pillaging by the Super-Rich Will Continue Until the Working Class Revolts
American workers are not stupid. They're getting fleeced and they know it. But until we rebuild large scale working-class power, it’s going to be a very rough ride.
Jun 24, 2024
They'll stone you when you're at the breakfast table.
They'll stone you when you are young and able.
They'll stone you when you're tryin' to make a buck.
They'll stone you and then they'll say good luck.
—Bob Dylan, from “Rainy Day Women #12 and 35”
There comes a time in the history of a nation when extreme inequality turns into pillage. If economic power is concentrated so is political power, and the wealthy are able to do whatever they damn well please. They can lie, cheat, and steal because they know they won’t be held to account.
Have the super-rich now taken control of our political and economic systems? Some current news makes me worry.
Let’s start with the food industry, the food cartel that includes General Mills, PepsiCo, and Tyson, which has been jacking up prices non-stop since 2020. Why are food prices up 25 percent since then?
These giants blame supply chains, the rising costs of labor, and the rising prices of other inputs required to produce and distribute their products. It’s not their fault, they say. But the real culprit, upon closer examination, is stock buybacks, another word for stock manipulation. These firms are fleecing shoppers by raising prices and then using the cash to buy back their own stocks, thereby increasing the market value of each share. Stock buybacks do not increase the value of a company, but they move money effortlessly to the largest Wall Street shareowners and to a company's top executives, who receive most of their compensation via stock incentives.
Since the deregulation of Wall Street, corporations have been on a job killing spree.
As food prices shot up by 25 percent, “the ten largest grocery and restaurant brands have together returned or pledged to return more than $77 billion to shareholders,” reports Veronica Riccobene in her excellent article “Big Food, Big Profits, Big Lies.”
In related news, California fast-good giants have claimed that the state’s 2023 minimum wage law, which raised wages from $16 to $20 per hour, killed 10,000 jobs. A closer look, picked up by the Los Angeles Times, showed that the industry cooked the numbers by comparing employment in September with December. But every year, September is within the peak dining out season, and in December people dine out least. When adjusted for seasonal variation or compared with the employment levels exactly one year earlier (both standard ways of measuring employment levels) the number of jobs actually increased by 7,000 after the minimum wage law was enacted.
Boeing recently crashed into the news again, when company CEO Dave Calhoun was roasted by a couple of congressional committees about its shoddy production processes. There were plenty of outraged performances, but none of the oh-so-self-righteous lawmakers had the cajónes to ask about the impact on safety of Boeing’s $61 billion in stock buybacks or about how about Calhoun hauled in $30 million in stock incentives while Boeing lost $1.6 billion in 2023. Is it possible that maybe, just maybe, Boeing financed those buybacks by laying off workers, moving work to lower-wage sub-contractors, and cutting safety corners? Radio silence from Congress. (See “Did Stock Buybacks Knock the Bolts Out of Boeing?”)
Then there’s the way Wall Street squeezes out new home buyers by gobbling up houses and turning them into rentals. (See “Wall Street to Working-Class Homebuyers: Fuggeddaboutdit!”)
Let’s not forget that John Deere recently announced moving jobs from the U.S. to Mexico while feasting on government contracts and, of course, using job cuts to finance stock buybacks.
There is no organized mass of working-class folks with enough power to stop corporate looting.
Do we have to even mention how Big Pharma is charging us more than it does Canadians, or how health insurance companies collude to fix prices, or how giant hospital chains over-charge us with impunity?
They rip us off to feed their profits, which then gets shipped to the richest of the rich via stock buybacks. Of the $3 trillion in after tax U.S. corporate profits in 2022, about $1.31 trillion went to stock buybacks. In 1980 there were 13 US billionaires. Now there are 748.
None of this is accidental. Stock buybacks were deregulated in 1982. That’s when Wall Street began its financial war on workers and got filthy rich. (See my new book for the gory details.)
Corporate Welfare
Just hearing that phrase makes me nauseous because it’s a stark reminder of how feeble we are. Progressives have been complaining about government giveaways to large corporations at least since the 1970s and the practice has only grown worse.
I’ll bet you already know how bad it is. We taxpayers give the oil industry about $20 billion a year in subsidies while BP, Shell, Chevron, Exxon Mobile and TotalEnergies plow $104 billion in dividends and stock buybacks into the pockets of their shareholders (2022). Wall Street may be getting as much as $800 million a day via the Federal Reserve, according to one report. I have yet to find a credible source that adds it all up. I’m guessing it’s well over a trillion dollars a year in direct subsidies, tax breaks, and financial market supports. To rub it in, the richest corporations have successfully lobbied for so many tax loopholes that they pay little or nothing at all. (See here and here.)
“But wait,” they tell us, “Tax cuts and subsidies create jobs.”
That’s the biggest and most painful lie of all. Since the deregulation of Wall Street, corporations have been on a job killing spree. Stock buybacks are financed with job cuts. More than 30 million of us have suffered through mass layoffs (defined as 50 or more workers let go at one time) since 1996. Kill the jobs, save some money, buy back your stocks, put the money in your pocket, rinse and repeat.
Working Class Revolt?
We’re nowhere near any kind of organized mass uprising. But American workers are not stupid. They may not be able to spell out in detail how they are getting ripped off, but they know it’s happening. Most importantly, they understand that the government works for the rich and not for them. That’s why so many are willing to support train-wrecking outsiders who attack the government, even when they are anti-worker billionaire buffoons. In 1964, 77 percent of Americans had trust in the federal government. Now it’s 16 percent.
We’re living with the results of the collapse of countervailing working-class power. In 1955, 35 percent of the private sector workers were in labor unions. Today it’s only 6 percent. That means there is no organized mass of working-class folks with enough power to stop corporate looting.
Somehow, somewhere, a new working-class movement has to emerge.
I hate to be alarmist, but we’re really in bad shape and it is likely to get worse. Power is so tilted towards the rich that more and more people are giving up on politics, leaving the field open to the modern-day robber barons. This corrupt environment is a petri dish for conspiracy theories and hate.
Somehow, somewhere, a new working-class movement has to emerge. I’ve been begging progressive labor leaders to start a new organization that would fight against mass layoffs and for workers who are not in unions. (How about Workers United for Justice?)
While labor unions must organize shop by shop, they should also acknowledge that labor law is so tilted against workers, that it will be very difficult to make major inroads into the 94 percent with no union protection. We need a new parallel path to connect with these workers that doesn’t involve years and years of costly combat within a rigged labor law system.
Victims of mass layoffs are everywhere. They need a voice. They need an organization that will fight for them. If leaders like Shawn Fain of the United Auto Workers (UAW) and Sara Nelson from the Association of Flight Attendants-CWA (AFA) reached out to non-union workers who are getting crushed by Wall Street stock buybacks, those workers just might come running.
Until we rebuild large scale working-class power, it’s going to be a very rough ride. If we have learned anything at all since 1980, it’s that greed begets greed. The super-rich always want more and they’re not shy about grabbing it, even if democracy crumbles all around them—and us.
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