INCOME DIFFERENCES: AT LEAST ONE ‘OCCUPY’ GRIPE IS REAL

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, NOVEMBER 22, 2011, OR THEREAFTER

BY THOMAS D. ELIAS

“INCOME DIFFERENCES: AT LEAST ONE ‘OCCUPY’ GRIPE IS REAL”

It’s easy to dismiss the “Occupy” movement that quickly spread from Wall Street in New York to California points like Los Angeles, Oakland, Sacramento and San Francisco as mainly an activity for the homeless and a bunch of anarchists. The movement prides itself on having no formal leadership, no structure and has rarely been able to articulate any aims.

But a new report from the non-partisan, non-profit California Budget Project (http://www.cbp.org/pdfs/2011/111101_A_Generation_of_Widening_Inequality.pdf) gives some decent indications of why this phenomenon found fertile ground in California and why its protests did not quickly fade away.

The budget project’s analysts found that disparities in wealth – already wide in this state 20 years ago – have expanded into a chasm. Essentially, the rich have gotten much richer, while the poor and the middle class received fewer and fewer crumbs.

When this column noted the wide income disparities in the late 1980s, it concluded that if the gulf became wider or began to seem permanent and implacable, it would form an open invitation to class warfare on a scale unprecedented in America.

But the gap did grow steadily wider, as tax benefits and loopholes for the wealthy and outsourcing of jobs to cheap-labor foreign countries forced lower- and middle-class incomes and benefits ever downward during the last two decades, while corporate owners, managers and some investors piled up wealth -- much of which still lies unspent.

It’s far from certain that the Occupy movement marks the beginning of outright violence based on economic class, any more than the riots spurred by the Rodney King verdict in 1992 marked the start of perpetual race warfare, as some predicted they would. In fact, racial harmony appears to have improved over the 10 years since the terrorism of 9-11, perhaps because a sense of national unity ensued, at least for several months.

But the causes of Occupy’s wide appeal and endurance show no sign of abating. Rather, the trend is toward ever-wider income disparity.

The new report shows that more than one-third of all income gains in California between 1987 and 2009 went to the wealthiest 1 percent of the populace. Almost three-fourths of all income gains during that time went to the top 10 percent, while the other 90 percent of Californians received just one-fourth of all new income. With unemployment up several percent since 2009, it doesn’t take a genius to realize that differences in income growth have become even wider.

Putting this in real numbers, the average income of the top 1 percent of Californians rose from $778,000 to $1.2 million per year, while the average income of people in the bottom 80 percent actually fell. These figures include corporate kingpins paid in the tens of millions of dollars, but CEOs are few even within the wealthy upper crust.

Does anyone believe this has gone unnoticed by the tens of thousands of recent college graduates who can’t find work on the level for which they’ve assiduously prepared? Those young people, of course, are well represented among the Occupy demonstrators.

There’s nothing really unique about the income gap in California, which continues a national trend that sees the top 10 percent of American households receiving half of all the nation’s income and the top 1 percent getting nearly one-quarter of total income.

All this means the average income of California’s top 1 percent was 33 times the average for the middle 20 percent.

Robert Reich, the former U.S. Secretary of Labor who now teaches at UC Berkeley, sees this as one cause of the longstanding recession. “The economy is in trouble because so much income and wealth have been going to the top that the rest of us no longer have the purchasing power to buy…goods and services.”

All this suggests that even when the Occupy demonstrations die down or are forcibly dispersed, the causes of the protestors’ resentment will remain, along with the anger that’s fueled the movement.

This, in turn, indicates there will likely be more to follow. For the more people feel they have nothing to lose, the more they will act up.

One other statistic: California millionaires, just 0.2 percent of taxpayers, took in $104 billion in 2009, roughly 11 times what it would take to make sure no more Californians live in poverty.

Yet, the wealthy and their representatives in Sacramento and Washington, D.C., constantly work to assure their taxes do not rise above levels to which they were reduced in the early 2000s. They even seek further cuts, claiming this will lead to many thousands of new jobs.

But the Occupy demonstrators suspect lower taxes on the rich don’t produce more jobs. They know for sure it hasn’t worked that way for them, which means the feelings that produced their protests will remain strong no matter how their current activity ends.

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Elias is author of the current book "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government's Campaign to Squelch It," now available in an updated third printing. His email address is tdelias@aol.com