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5.28
General Social Trend #5:
  
  The growing gap between the very rich and lower-middle income earners  
  The global economy has grown sevenfold since 1950. Meanwhile, the disparity in per capita gross domestic product between the 20 richest and 20 poorest nations more than doubled between 1960 and 1995.  
   
  Of all high-income nations, the United States has the most unequal distribution of income. In America, the wealthiest 20 percent of households in 1973 accounted for 44 percent of total U.S. income, according to the Census Bureau. Their share jumped to 50 percent in 2002, while everyone else's fell. For the bottom fifth, the share dropped from 4.2 percent to 3.5 percent.  
   
5.28.1 Are the rich really getting richer?- fact vs smokescreen gobblygook  
  Some may be surprised to learn that while 99.9% of the population know with their own eyes that the rich are getting richer, that few politicians in developed and developing countries are prepared to admit this undeniable fact.  
  Some, most notably those in the United States are even confident to deny the facts by quoting gobblygook “reports” and surveys” that compare real wages, buying power and all sorts of other distractions to claim the wages of the poorest have never been better.  
  Even more suprising is that these smokescreen antics not only get printed, they largely hide this trend from media scrutiny for several years at a time, until the next undeniable report is published and promptly attacked.  
  As a result, few nations have even commissioned any kind of series investigation into what factors are causing the undeniable shift of proportion of wealth and assets to the already rich at the expense of the poor and middle class of society.  
5.28.2 Don’t panic, its perfectly normal, it will be over soon  
  Arguably one of the most cynical and most over used excuses by leaders of developed and developing nations when finally corned on the truth that the rich are getting richer is the excuse that it is a “perfectly normal” economic phenomena and that the trend will soon change.  
  This excuse has been trotted out every few years for now close to thirty years when trends started to clearly show an alarming gap in the distribution of wealth in developed democratic nations. Even today, the excuse is still used even though the fastest growth in the gap has been in the last five to ten years.  
  The principle argument used by politicians under the advice of “expert” economists is that as the economy adjusts from uncompetitive industries (where jobs are sent offshore) and firms become more competitive, they hire more staff and wages increase.  
  In fact, wages in many industries within developed countries have remained static with working conditions actually going backwards under industrial reforms designed to make firms “more competitive”- the result is higher profits, the right getting richer and workers getting less in their pockets.  
5.28.3 Why is the gap happening?  
  Several features have conspired against the poor to middle income earners in most developed nations over the past 10 years, in contrast to the improved conditions of the very rich.  
  The first is the growing inequality of effective taxes and fines. While the effective tax burden of the very rich has decreased, the effective tax and fine burden of the poor and middle classes has increased due to the growth in taxes, parking fines and all sorts of costs from local and state governments. When federal governments point to the lowering of tax rates for the lowest and middle income earners, they frequently fail to include the rising costs of rates, fines, and assorted local and state government revenue raising.  
  The second is the static nature of real wages. While high income earners have been able to take advantage of bonuses and other incentives, lower and middle income earners now have to compete for jobs with cheaper overseas suppliers. The result has been a trade off for those who still have jobs in being more productive while keeping a job vs firms who shift their manufacturing/service centres completely off-shore.  
  The third is the higher cost of purchasing and maintaining primary assets such as a home and a motor vehicle and the depreciation or slow growth of such assets versus those of the very rich. In many countries, the growth in values of real estate of the most expensive properties is ten to twenty times that of the cheapest property. It means many poor to middle income earners have engaged in high personal debt with assets that are either static in value or losing money.  
5.28.4 The future impact  
  The world has seen great gaps between the very rich and poor many times in the past. In fact, most of the history of the world has seen great inequality of assets between the richest and poorest of society.  
  Periodically however, the poor have risen up and challenged the rich, sometimes overthrowing such unjust regimes, taking the assets of wealthy under the leadership of champions of revolution. Often, all that effectively happens is that people who were once rich are murdered, imprisoned and stripped of their assets and another band suddenly become very rich and powerful.  
  Certainly, the time is fast approaching, thanks to denials and inaction in developed nations, that the seeds of revolt have been sown. Only time till tell when the poor will rise up and what will happen.  
     
 
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