There’s one area where there’s been huge growth in the U.S. — the gap between the rich and poor.
Professor Philip Alston, the United Nations special rapporteur on extreme poverty and human rights, released a report Friday, heaping scorn on what he described as the Trump administration’s “dramatic change of direction in U.S. policies relating to inequality and extreme poverty.” He cited the administration’s current tax proposals and “dramatic cuts in welfare.”
Alston spent two weeks traveling through California, Alabama, Georgia, Puerto Rico, West Virginia, and Washington D.C. and spoke with dozens of experts and civil society groups, met with senior state and federal government officials and talked with many people who are homeless or living in deep poverty. Contrasts between private wealth and public squalor abound, he said.
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“The proposed tax reform package stakes out America’s bid to become the most unequal society in the world, and will greatly increase the already high levels of wealth and income inequality between the richest 1% and the poorest 50% of Americans,” Alston said. More should be done to address the 40 million people who continue to live in poverty, he added.
Among his list of criticisms:
• U.S. infant mortality rates are among the highest in the developed world, but have fallen 15% in the last decade.
• Health care expenditure per capita is double the average of the 35-member Organization for Economic Cooperation and Development, but fewer doctors and hospital beds per person.
• The U.S. has the highest incarceration rate in the world, ahead of Turkmenistan, El Salvador, Cuba, Thailand and the Russian Federation, nearly 5 times the rate of OECD members.
• Child poverty rates in the U.S. are the highest amongst the six richest countries — Canada, the U.K., Ireland, Sweden and Norway.
• Neglected tropical diseases, including Zika, are increasingly common in the U.S.
• The US has the highest prevalence of obesity in the developed world.
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“Successive administrations, including the present one, have determinedly rejected the idea that economic and social rights are full-fledged human rights, despite their clear recognition not only in key treaties that the U.S. has ratified, and in the Universal Declaration of Human Rights which the U.S. has long insisted other countries must respect,” Alston wrote.
On the upside, he said most children living in poverty have medical insurance. Due to the expansion of Medicaid and the creation of the Children’s Health Insurance Program in 1997, 95% of children had health insurance last year. Medicaid and CHIP have lowered the rate of children without health coverage to 5.3% in 2015 from 14% in 1997. The latter program, however, is under threat.
A separate report also cites ‘extreme’ gap between rich and poor
The divergence in the levels of inequality has been “extreme” between Western Europe and the U.S., according to a separate report, released this week by the World Inequality Lab, a research project in over 70 countries based at the Paris School of Economics, and co-authored by the French economist Thomas Piketty. “The global middle class has been squeezed,” it said.
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In 1980, the U.S. and Western Europe had similar levels of inequality. And today? Not so much. While the top 1% of earners made up just 10% in both regions in 1980, it increased slightly to 12% in 2016 in Western Europe, but doubled to 20% in the U.S. “Since 1980, income inequality has increased rapidly in North America, China, India, and Russia,” it said.
“The income-inequality trajectory observed in the U.S. is largely due to massive educational inequalities, combined with a tax system that grew less progressive despite a surge in top labor compensation since the 1980s,” it found. In Europe, tax and wage inequality was moderated by educational and wage-setting policies that were more favorable to low and middle-income groups.
In the U.S., out of 100 children whose parents are among the bottom 10% of income earners, only 20 to 30 of them actually go to college. However, closer to 90 out of 100 children go to college if their parents are within the top 10% earners. What’s more, research has shown that when elite colleges open their doors to students from poor backgrounds, academic performance at the institution doesn’t decline.
Income inequality varies greatly around the world. It is lowest in Europe and highest in the Middle East. In 2016, the top 10% of earners made up 37% of all income in Europe, 41% in China, 46% in Russia, 47% in the U.S. and Canada, and around 55% in sub-Saharan Africa, Brazil, and India. In the Middle East, however, the top 10% capture 61% of national income.
“In China and Russia there have been unusually large increases in private wealth; following their transitions from communist to capitalist-oriented economies, they saw it quadruple and triple, respectively,” the researchers wrote. “Private wealth–income ratios in these countries are approaching levels observed in France, the U.K., and the U.S.”
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“The poorest half of the global population has seen its income grow significantly thanks to high growth in Asia, particularly in China and India,” the World Inequality Report concluded. “However, because of high and rising inequality within countries, the top 1% richest individuals in the world captured twice as much growth as the bottom 50% individuals since 1980.”
Looking at private income, such as earnings and dividends, and government benefits like Social Security, the income of families near the top increased roughly 90% from 1963 to 2016, while the income of families at the bottom rose less than 10%, according to a separate report released last month by the Urban Institute, a nonprofit policy group based in Washington, D.C.