Sunday, June 2, 2013

Two Different Americas ...

In the tumultuous year of 1967, society had created divisions among Americans to the point of massive protesting, and in some instances, urban rioting. To determine the root causes of the unrest, President Lyndon Johnson formed the Kerner Commission. The commission's goals included determining why major rioting took place and how to best prevent this type of violence from reoccurring.
When the Kerner Commission completed its 426 page report, one line seemed to accurately surmise the problem in the United States: "Our nation is moving toward two societies, one black, one white—separate and unequal." Sadly, the Kerner Report's suggestions met with resistance and in most instances, were ignored by the federal government. Implementation of the Kerner Report might have lessened racial tension throughout the next 30 years.
Although racism still exists in the United States, the nation lives with more peace between black and white Americans with a higher level of equality than ever before. However, today a new divider separates Americans into two classes. Strangely, the suggestions made by the Kerner Report could be used as a blueprint to solve this problem.

Race no longer exists as the primary division among Americans. In the modern America, socioeconomic class divides citizens. Most Americans like to believe the nation has an upper class, a lower class, both supported by a strong middle class. While that format represented society before, that model appears to be slowly disintegrating into 'haves' and 'have-nots'.
In the aftermath of the Housing Crisis and subsequent 'Great Recession' of 2008, studies investigated the gains or losses of Americans from 2009-2011.
Pew Research measured the top 7% of Americans (in terms of net wealth) against the lower 93%. Their findings included that top bracket seeing a gain in their net wealth by an astonishing 28.%. Households earning less than that sum reported a 4% loss on their net wealth.
One of the primary factors in this uneven recovery stems from the fact that more affluent families keep the bulk of their wealth in some form of stocks or bonds, while most Americans' wealth pertains to the value of their home.
The Housing Crisis of 2008 hurt the lower 93% of Americans by causing thousands of citizens to face foreclosure, and then in the midst of a 'recovery', the housing market remained flat while the stock market increased. The wealthy become wealthier -- and well, you know how the rest of that goes. This fact shouldn't be misconstrued to disparage the upper echelon of wealthy Americans, but the failure of the rest of the nation to recover should be concerning to everyone.
The nation should also take into consideration a statistic called the Gini Coefficient (GC), a numerical value ascribed to every nation that measures income inequality. Based on income, wealth and other demographic information, every nation receives a number between 0 and 1. A rating of '0' means a nation's citizens have an equal income, whereas a rating of '1' demonstrates complete inequality where wealth is essentially concentrated into the hands of one individual. The GC for the United States has been among the highest in the world throughout the 2000s, and increased each year from 2007-2011.
The gap widened since it became the standard of measuring income inequality. The United States received a GC of 0.386 in 1968 (somewhat ironically), and the number in 2011 increased to 0.477 -- respectively representing the lowest and highest scores the nation has received. Our current GC places us on par with China, Ecuador, and Madagascar for income inequality.
So, what danger exists because of income inequality? Why should anyone care? In a place like the United States, shouldn't people be accountable for their own success or failure? Certainly, but when the wealthy succeed, they need to see to the success of the other 93% of Americans.
One example fresh in the minds of citizens -- the Occupy Wall Street (OWS) movement that began in the fall of 2011. The movement consisted of thousands of unemployed citizens 'occupying' major urban centers to display their displeasure for the economic situation of the nation, including the disparity between the rich and the poor. OWS represents a very small taste of what individuals like Karl Marx theorized could happen -- that a conflict between two social classes could erupt when the balance of wealth tipped too far to one side.
The OWS concept has largely dissipated over the last two years, but to ignore this movement would be unwise. The backers of OWS had little organization and did not foresee the massive number of Americans who would participate. The OWS concept was also largely unorganized, and despite its flaws, managed to disrupt and irritate the status quo. The next uprising among disgruntled citizens may not be as peaceful or easy to ignore. Americans should treat OWS as a Shay's Rebellion of the 21st century. Even if income inequality does not induce protest or Marxian-like violence, its negative side effects create underlying problems for the nation.
British scientist Michael Marmot studies income inequality among nations and postulates that a larger discrepancy between socioeconomic classes leads to poor health among citizens, and that ultimately translates to unhappy, stressed, and less productive workers. Marmot's work includes findings detailing the direct relationship between the gross national product (GNP) of a nation and the life expectancy of its people. Marmot also concluded the following about infant mortality within the United States:

The high-income group, with average household income greater than $70,000, is the standard to which all others are compared. The low-income group, with household income below $15,000, had 3.9 times the mortality rate of the best-off, but there is a gradient: The higher the income, the lower the mortality. Although the bottom group has particularly high mortality, it accounts for about 7 percent of the population. This means that its members make a relatively modest contribution to all of the deaths that can be attributed to having an income below the highest level. More of the excess deaths will come from the 30 percent of the population in the $30,001–$50,000 range, who have 59 percent more mortality than is true of the richest group.

Clearly, the gap inequality of wealth must be addressed. What ought we to do? I believe we should look to the past -- to the Kerner Report.
The Kerner Commission identified the following 12 grievances to be among the most deeply rooted in dividing the nation racially. The level of frustration among Americans increases with each complaint. I have taken the liberty of striking out four of the problem areas identified by the Kerner Report because they appear to be minor with respect to income inequality. However, the remaining eight areas can be regarded as being significantly different experiences for wealthy and poor Americans.
1. Police practices
2. Unemployment and underemployment
3. Inadequate housing
4. Inadequate education
5. Poor recreation facilities and programs
6. Ineffectiveness of the political structure and grievance mechanisms
7. Disrespectful white attitudes
8. Discriminatory administration of justice
9. Inadequacy of federal programs
10. Inadequacy of municipal services
11. Discriminatory consumer and credit practices
12. Inadequate welfare programs
What should America do to correct these unequal policy areas? I would like to hear your thoughts on the eight problem areas listed above and what should be done to assist in creating a lower income gap.

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