According to a report out of the Pew Research Center, “During the first two years of the nation’s economic recovery, the mean net worth of households in the upper 7% of the wealth distribution rose by an estimated 28%, while the mean net worth of households in the lower 93% dropped by 4%.”
There’s are several reasons for this trend. One of the worst is that one to two plus million jobs are exported every year from the US, according to the Federal Reserve. The difference between the old wages and the new lower wages over there are redistributed from the job losers to rich shareholders via higher corporate earnings, increased dividends and rising share prices.
And that is precisely what has occurred, a massive redistribution of income, which has fueled a rise in share and bond prices (wealth). BTW, income is money coming in, such as weekly pay checks and corporate dividends, while wealth is composed of assets.
The people in the top 7 percent saw their total wealth increase $5.6 trillion, mostly in the form of stocks and bonds. The 93 percent and lower saw their wealth decrease by $0.6 trillion. Their wealth is mostly in their houses.
What happens when job get shipped overseas? Many people lose their houses. If enough jobs are shipped overseas, then local tax bases begin to shrink. Teachers, fire fighters, government lawyers and accountants; they lose their jobs, they lose their houses. But corporate share prices rise because labor costs are reduced. In other words, a massive redistribution of income results in a massive redistribution of wealth.
The 1 percent have stolen virtually all income growth during the last five years. They now steal over 30 percent of all yearly US income, up from about 8 percent thirty-three years ago. Free trade treaties have played a massive role in this.
According to Pew, “During the period under study, the S&P 500 rose by 34% (and has since risen by an additional 26%), while the S&P/Case-Shiller home price index fell by 5%, continuing a steep slide that began with the crash of the housing market in 2006. (Housing prices have slowly started to rebound in the past year but remain 29% below their 2006 peak.)”
The reason for the results of this study is massive corruption in the US government. Money is the reason why many congress persons and senators vote to redistribute income from the 99 to the 1 percent. All of this was easily predictable, and I did so in The Rigged Game.
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