Over the coming year, Common Cause is going to be directly addressing the issue of poverty and inequality and how certain features of our democratic system create an environment which produces public policies that fail to reflect the needs of the poor and increasingly insecure middle class.
The U.S. has a high level of inequality as compared to other countries around the world. If ranked by Gini coefficient, the United States would rank 71st in the world, tied with Turkmenistan and Ghana, according to the
2007/2008 United Nations Human Development Report. The report estimates that the income of the richest 20 percent in the U.S. is 8.4 times that of the poorest 20 percent, compared to ratios of 6.7 in Malawi, 4.9 in Bangladesh and 4.3 in Pakistan.
As part of the American Political Science Association's (APSA)
Task Force on Inequality and American Democracy, Jacob Hacker of Yale University with several other scholars documented several trends in policy development in the U.S. over the past three decades that could help explain our exceptional levels of inequality as compared to other rich nations. Hacker et al. point to the scaling back of a variety of welfare state policies that most affect the lower- and middle-income groups:
In constant 2002 dollars, the value of the minimum wage fell from $8.28 per hour in 1968 to $5.15 presently. The real value of unemployment insurance benefits descended from high levels of $240 or more for weekly average benefits in the early 1970s to around $220 throughout most of the 1990s. Average individual benefits for Food Stamps, also in real terms, declined from $144 per month in 1981 to $91 in 2000. Finally, individual benefits under Aid to Families with Dependent Children lost one-third of their value between 1970 and the mid-1990s.
According to APSA, only 12 percent of American households had incomes over $100,000 in 2000, but 95 percent of the donors who made substantial contributions were from these wealthiest households.
Coincidence?
