In America, are the rich getting richer, and the poor getting poorer?

Question

If true, some people blame tax cuts for the rich and the diminishing power of labor unions. What do you think?

Answer 1

yeah not just america... its globally

Answer 2

You have it half right
The rich are indeed getting richer, but the poor are also getting richer, just not nearly as fast.

I can give you statistics to back this up like the fact that US consumer spending has more than doubled since WW2, but I want to focus more on why this is the case and also why it seems that the poor are still poor. (and they are).

The bottom line with wealth is that capital generates more capital. The riches of the rich dont have to work because their money earns money for them far faster than they themselves could earn it by actually getting a job. Think of it this way, a rich man with 10 million dollars who keeps his money is a 5% interest bearing bank account will still make $500,000 a year without lifting a finger. In fact most of the US stockmarket is owned by these very rich people. So when companies do well, their wealth increases proportionately. So as the economy expands, the rich who after all own most of the economy in the form of stock, benefit the greatest from the exapnsion. The poor (not talking middle class here) on the other hand do not own stock, or really any sort of investment capital (thats why they are poor after all). So when the economy expands, they get no direct benefit from the expansion. The effect for the poor is strictly secondary. Higher efficiency in production of consumer goods allows the poor to purchase more consumer goods realtive to the meager income they might be generating, this makes the poor better off because although they are still making very little money, they are able to purchase more with the little income they do make.

If you dont believe that this is the way things work, think of the american middle class for a minute. Back in 1950 the average american family had perhaps one familiy car, perhaps a color TV (if they were lucky) and maybe 1 if 10 was college educated. Today the average american family has 2+ cars, 3+ TV's in every home, 27% are college educated and the homes of the american middle class have only continued to expand. Where in 1950 a home with 1,500 sq ft was considered standard, todays new homes are selling with 2,500 sq ft standard. The american middle class litteraly needs more home so that they can fit in all the exercise machines, TVs, cars and other junk they have been buying. Why has all this hapened? Because americans have become better off. Efficiency has allowed us to produce ever greater amounts of consumer goods at ever decreasing prices. Companies like Walmart have allowed the poor and working classes to benefit likewise.

So the poor are getting somewhat richer (in temrs of the stuff they have), but the rich are getting exponentially richer, so the gap between the rich and poor is ever increasing.
The only way to close that gap, is to ridistribute income using taxation, however that seems unlikely considering that we are currently moving in the opposite direction, trying to do away with the estate tax (called in the media the "death" tax) which would only increase that gap.

As for labor unions, its no doubt that they are in decline, but labor unions were never representatives of the poor. Labor unons were what gave birth to the middle class at the turn of the last century. Labor unions workers at least traditionally (think GM employyes) have done extremely well financially ($60K+ for assembling cars). The poor are not part of unons, if they were they would not be poor. Now it is true that there is a decline in labor unions and that people that would have traditionally joined a union and recieved a good wage are now poor because such opportunities are gone, but that would be missing the point. Labor unions as I states were always representatives of the middle class, not the poor, as structural changes in the economy have shifted our economy from manufacturing to services, the children of those manufacturing employees wnet on to get a college education and join the white collar middle class. So yes those jobs are gone, but the children of those workers are now working as middle management of the many service/computer comapnies have were born in the 1980s and 90s.

Answer 3

I do not believe there are any statistical study on this subject.

I see some rich people getting richer while other rich people getting less rich. Some poor people get poorer, while some poor people get self-sufficient. In the mean time, some poor people has gone rich.

I do believe, because some rich people are getting richer, and some poor people are getting poorer, the difference between the poorest and richest are getting wider. But that does not mean there aren't cases that are more "fluid" in the middle.

Answer 4

What is your definition of rich though? I make good money, twice what a lot of people in this area make... yet due to taxes I really don't bring home that much more than the guys that make half what I do and since I make enough not to qualify for any kind of govt. assistance, they probably live easier than we do anyway... I know the govt. health care service is better. My company health coverage costs me out the *** and covers nothing but well visits on co-pay. Everything else is out of pocket up to the first $4000 for our family. If anyone is getting rich it's the govt., not the American citizen.

Answer 5

If you were to really think about it, everyone milks the pocket of the middle class hard worker....and unfortunately they never get anywhere because they are supporting the programs for the poor and the rich. The poor use the tax dollars for community programs that the middle class would not qualify for, and cannot afford. The rich get to take advantage of all and tax benefits.

Answer 6

I think when America lost the ability to have one adult stay home and still make a livable income, America began to lose the middle class(rich getting righer, and poor getting poorer). I don't think that tax cost for the rich to blame, I believe it is the opening of the world economy, and Americas Money is not staying in America. Not just losing jobs at good paying manufaturing locations in America to foreign locations, but also to Foreign money coming into America and investing into American companies. Thus when investing into something the idea is to make money for yourself.
That is just what I think.

Answer 7

I would say things are changing.There is widening income inequality especially in the Middle Class. There is also a great deal of outsourcing, and while the number of people receiving unemployment was lessening, many of the new jobs do not offer benefits, ergo health care is a problem.

However it is also easier to start up a sole proprietership, especially online.

Answer 8

HI THERE WELL I LIVE IN NEW YORK CITY IN WHICH IT'S REALLY RICH YES IT'S TRUE TO MANY OF US HERE . IF YOUR GOING OR THINKING TO MOVE TO NEW YORK CITY THINK 2X CAUSE THE RENT IS MORE THAN 500 A MONTH THE 99C STORES ARE NO LONGER 99C PRODUCTS BUT SOME ITEMS. FOOD AND COHERING YOU BETTER OFF GOING TO THE RACK AND GET THE CHEAPO ON THAT RANK FROM FOODS TO COTHING YOU CAN FIND 10.00 DOLLAR ITEMS ONLY IF YOUR A SIZE SMALL TO MED LARGE XLARGE MMMMMM HIGH PRICE . THE HOMES THEY ARE BUILDING IS LIKE A MATCH BOX ALL PUSH TOGETHER . ONLY IF YOU LIVE IN NEW YORK CITY HOUSING BUILDINGS CAN YOU PAID YOUR RENT BUT WAIT ALL THAT WILL SOON BE GONE CAUSE EVEN THOSE HOMES APARTMENTS WILL BE TURN INTO COOP UPS I ASK MYSELF WHERE WE LIVE IN TWO YEARS WITH THE RENT GOING AS HIGH AS 2000 A MONTH THE ISLANDS I WOULD NOT LIVE CAUSE THEY TOO WILL BE GONE WITH THIS OZONE LAYER THE OCEAN IS GETTING HIGHER WHY ARE THEIR SO MANY ROCKET SHIPS AND PEOPLE PAYING TO SEE SPACE CAUSE SOONER THAN EXPECTED LIFE IS OUT IN OUTER SPACE JUST NOT FOR US POOR WHO WORK FROM 9 TO 5 BUT FOR THOSE WITH A INCOME OF MILLION OR HIGHER SO IF YOU HAVE A NICE APARTMENT OR A HOME STAY WITH IT CAUSE HERE IN NEW YORK CITY PEOPLE ARE BEING PUSH IN AS ROACHES I N SMALL ROOMS. THE RICH ONLY TAKE CARE OF THEMSELFS AND THE POOR TAKES CARE OF THE POOR WE HELP ONE ANOTHER NO MATTER WANT HAPPENDS YOU NEVER GO HUNGRY IN A POOR PERSON HOME

BE WELL BE SAFE GOD BLESS

Answer 9

no i do not think this is the case. I find those with wealth now suffer much more today than any time before this is due to media knowing also broadcasting all and any thing about you!
to the point where I would think would make one miserable also second guessing very important decisions needed for constant
wealth to be possible.
The poor i find at much more at ease making way, happy with very little and always at some type of acceptance full of spirituality , never needing much of material.
So I begin to see that those with less "Wealth" materially is truely those of whom are Richer!

Answer 10

My mother grew up in house without electricity. She picked cotton BY HAND all day. She shared beds with her siblings.

My father had a pet raccoon because they couldn't afford a dog.

Yep. The poor in 2007 have it rough. They are poorer than that.
.

Answer 11

From my position, it seems so. I'm middle class and the squeeze is really on with higher prices and not higher income. I refuse to work myself sick with two jobs and overtime. I know too many people who work hard to "keep up with the Jones'" only to end up with high medical bills due to stress and heart trouble.

I'd rather be poor and healthy than rich and sickly as so many rich people are. Work hard all your life to keep up with society and lose it all on medical bills when you're 45...WOW! It seems its the American Dream.

I LOVE hard work and good sleep from the result of it but I hate stress and worry. I'd rather live in my car happy than live in a mansion all stressed out and worried. The squeeze certainly seems to be on the middle class from where I'm looking.