Numerous commentators have written about the growing divide in the US between capitalists and workers (and other producers), although they eschew the terms “capitalists” and “workers”.
By 2012, the richest 1 percent of the population received a fifth of the national income, breaking the previous record, set in 1928. The bottom 80 percent, which includes workers, received about 11 percent, and the rest went to the 19 percent of small businesspeople, managers, professionals etc.
Disparity exists within the top 1 percent, too. In 2009, of income reported for tax purposes, the bottom half of the top 1 percent each received between $340,000 and $500,000. The top 0.1 percent received $5 million and up.
These are the incomes the rich admit to. If the real figures were readily available (they’re not), they would show incomes of hundreds of millions annually, according to the more honest economists.
While greater levels of inequality are evident in recent years, the longer term growth in inequality between the two classes began in the 1970s.
A 2011 study by the Congressional Budget Office found that, between 1979 and 2007, real household income after taxes grew by 62 percent on average for all classes. But the income of households in the top 1 percent grew by 275 percent, compared to 65 percent for the next 19 percent, just under 40 percent for the next 60 percent, and 18 percent for the bottom fifth of the population.
From 1947 to 1973, real median family income kept pace with the growth in labour productivity. Then it began to fall behind, and stagnated between 1999 and 2011.
The lion’s share of productivity growth went to the capitalists and their managers, professionals and hangers-on. The share received by the low and middle income households declined.
If we look at wealth (i.e. not simply income, but assets as well), the gap is also widening. In 1983, the bottom 80 percent of the population owned 18.7 percent of total wealth. By 2010, that had fallen to 11.1 percent.
Of financial wealth (stocks and bonds, holdings like money market funds, savings of various types, insurance plans and so forth), in the same period the share of the bottom 80 percent went from 8.7 percent to 4.7 percent.
We must keep in mind that all these figures come from official sources, and the rich have all kinds of ways to hide their real wealth, including offshore accounts and investments.
Also, many of these figures are averages, which obscure reality because of the great disparity of income and wealth under capitalism. An example: If 1,000 workers who make on average $50,000 a year each, are averaged in with 10 capitalists who “earn” $1 million each, the new average income jumps to about $60,000. If we average these 1,000 workers with one capitalist who takes in $100 million, the average jumps to $149,900.
I am in the bottom 80 percent, who owned 4.7 percent of total financial wealth in 2010. My financial wealth consists of pension funds and savings. My pension funds own stocks, bonds and the like.
But I have zero control over how those savings and stocks are invested. The big financial capitalists control them, and invest them to further increase their own wealth. Thus the very wealthy at the top, a tiny fraction of the 1 percent, control far more wealth than they nominally own.
Well over a century ago, Marx proved that the gap between the capitalists and the workers would grow over time. Capital would become ever more concentrated. Wages could not keep pace with the accumulation of capital.
This process is the fundamental cause of the increasing gap between the rich and the rest of us. But a countervailing trend arises when workers fight back by collectively organising in trade unions and political parties.
In the international capitalist long-term boom following World War II, workers made gains, especially in the US.
In the US, this development masked the growing internal weakness of the unions through increasing bureaucratisation. In this period, the class-collaborationist policies of the union bureaucracy could still yield gains for workers. There were strikes, of course, and important ones, but by and large the bureaucracy was able to win gains through bargaining with the capitalists, without much struggle. The capitalists could afford it.
When the long expansion began to come to an end around 1970, international capitalist competition intensified. The ruling class set out to attack the gains workers had won in previous struggles.
In this new situation, the class collaborationist policies of the bureaucracy could not stand up to the ruling class offensive. While there were rank and file rebellions in the 1970s against these policies, these struggles were ultimately unsuccessful.
By the 1980s, the bureaucracy’s policy in practice, and more and more openly stated, was worker concessions to capitalist demands.
The consequence of all this is the trend since 1970 of the increasing gap between the two main classes. It has gotten worse since the beginning of the Great Recession.
It will be turned around only when a new militancy takes hold in the working class. There are some signs in the new struggles of the lowest paid in fast food and Walmart, in movements to raise the minimum wage and the Chicago teachers’ strike, but these are still heat lightning.
Hundreds of Victorian Socialists volunteers have been staffing early voting polling booths since 14 November, building on the more than 150,000 doors knocked across the north and west of Melbourne during the state election campaign. They are bringing a new style of campaigning to the state election, and have found a constituency of voters fed up with the prevailing pro-corporate, mainstream politics.
The Australian Nursing Federation will proceed with a ballot of its West Australian members in defiance of an order by the Industrial Relations Commission. If nurses reject the McGowan state Labor government’s below inflation pay offer, they will resume a campaign of industrial action, which was suspended last week.
The latest figures from the Australian Bureau of Statistics confirm that real wages are falling at the fastest rate since the Great Depression, possibly even the 1890s, both period of massive unemployment.
Victorian Socialists—recognised by Beat magazine as “the most left-wing option Victorians have this election”, and by PEDESTRIAN.TV as “Fierce door knockers and grassroots campaigners”—is making a mammoth effort to push against the grain of history in the state election. The party has a chance of getting Jerome Small elected to the upper house in Northern Metro and Liz Walsh in Western Metro. If successful, it will be only the third time a socialist independent of the ALP has been elected to any Australian parliament.
The UN COP27 climate conference is taking place in Egypt, which is an apt choice for a climate conference—a military dictatorship propped up by oil money from Saudi Arabia. And it’s reflected in the outcome.
Socialist Alternative is the largest revolutionary group in Australia since the 1920s. We are the only socialist group with a national presence and an expanding membership. Founded by a few dozen people based overwhelmingly in Melbourne in the mid-1990s, the organisation has grown to nearly 500 activists spread across the country. While this is nowhere near what we ultimately need, it’s an important achievement in a context where the broader left has disintegrated.