The Redistribution of America's Wealth
Did you know that 84% of our countries wealth is controlled by the richest 20% of Americans? Some estimate that the concentration of wealth is even worse at the top levels with studies showing that the richest 1% own 50% of America's wealth. Economists say that the concentration of wealth has not reached this level until just before the great depression. It is said that a consumer driven economy like ours cannot function if most the wealth is hoarded by a small fraction of the population. For more information wealth concentration see Americans Vastly Underestimate Wealth Inequality, Support 'More Equal Distribution Of Wealth': Study and Wealth Disparities in U.S. Approaching 1920s Levels.
Our feeble employment laws share some of the blame for the concentration of wealth. For example, look at the anemic Fair Labor Standards Act which is supposed to require the payment of overtime and minimum wage to workers. A recent study of 4,387 low wage workers in New York, Los Angeles and Chicago found that 76 percent of them were not provided with overtime pay and 25 percent were not minimum wage. It is estimated that workers in these three cities lose $56.4 million in lost wages every week. See Working Without Laws. Guess who keeps that $56.4 million?
When it comes to paying our workers, the wealthy business owners are breaking the law and keeping money owed to workers. This contributes to the concentration of wealth. Companies know they can withhold overtime pay until they are sued. They also know that the odds of getting caught are slim and even if they are caught, they just have to pay the wages at that point and often only a fraction of what is due.
The Obama administration enhanced the federal Department of Labor's budget to step up the enforcement of wage theft laws. But Obama is spending more to invade Afghanistan or save some mega bank from its own stupidity. More is needed to turn the tide here at home and transfer wealth back to consumers so they spend money and invigorate the economy.
In my skeptical view, the small fraction of the population that controls the wealth is using that wealth to effectively control the political process to serve their narrow interests. A political solution is not likely. Maybe another great depression is needed to change the status quo because the hoarders of wealth will not let it go any other way.
