By Victor Ochieng
One of the most difficult things is rising to the point of joining the league that controls the American wealth. Why? Because those who are already there are few and they’re in full control of almost each and every sector. This makes it easy for them to buy every rising startup, buy and invest in new ideas and ensure everything remains under their control.
Years ago, every hardworking American was sure of rising through the economic ladder. It would start from working and earning a decent salary, getting to the point of buying a home and having retirement insurance among other savings. The pay was good and there weren’t too many life pressures to consume it, meaning it was easier to grow and live comfortably even as you wait for that fitting employer pension.
However, that’s not what most Americans are facing in 2017. There are high bills to take care of and high taxes to pay, among other life pressures. One of the biggest challenges the country is facing is the distribution of wealth, which affects a majority of the American citizenry. This is quite different from the situation in 1980.
While the United States remains the richest nation in the world, the wealth distribution is a serious problem. In just a matter of a few years, China will overtake the U.S. and become the world’s biggest economy. During the financial crisis, for example, only a few Americans were able to go through it and emerge with no serious damage to their net worth. For a majority, it messed them up. In fact, there is a good number that hasn’t recovered to date. Their salaries and net worth aren’t any better.
According to a research report released by the University of California Berkeley economists, the top 0.001% earners in America have seen their income rise by 636% for the 34 years between 1980 and 2014. In spite of the fact that the cost of living has gone up over the period, wages of the bottom 50% remained the same over the period.
America’s richest 10% is worth $51 trillion, which is equal to 75% of the combined total household wealth of all Americans. Also worth mentioning is that the US GDP for 2016 stood at $18.5 trillion.
In 1980, the top wealthiest 1% had control over 12% of income. That has gone up to 20% in 2014. In the same year, the top 1% were earning 81 times what the bottom 50% were earning, having gone up from 27 times back in 1980.
This isn’t something good for the U.S. economy. Whenever such things happen, the middle class grows smaller and is easily shaken whenever a crisis like that of 2008 takes place, making it difficult for them to recover, pushing them further down the economic ladder.