The Inequality to Be Suffered by Our Children

Paul Buchheit

Paul Buchheit Author, editor, expert on income inequality

The Inequality to be Suffered by Our Children 

The fortunate ones will not be suffering. In the past eight years, the richest 5% of Americans have increased their wealth by $30 trillion -- almost a third of total U.S. wealth -- while the poorest 50% have seen their average wealth drop from $11,500 to $9,500. There is ample evidence for a nation soon to be made even more unequal by the transfer of wealth from rich baby boomers to their children and grandchildren, who will have done little if anything to earn it. The middle class will be further crippled by the ongoing growth in inequality. Unless progressive policies are demanded by American voters, most of our children and grandchildren will suffer from the continuing expansion of a Great-Depression-like wealth gap that already "dwarfs" the rest of the developed world. 

Nearly a Third of U.S. Wealth will be Handed Down, Mostly to Rich Kids 

Total U.S. wealth is about $98 trillion. According to an Accenture study, $30 trillion in financial and non-financial assets will be inherited by the children of Baby Boomers in the next thirty to forty years. A Boston College study predicts an overall transfer twice that size, at $59 trillion, with $36 trillion going to heirs. Deloitte predicts a $24 trillion transfer of wealth (to and from all generations) in the next fifteen years. America's richest 20% own nearly nine-tenths of this impending windfall (Table 6-5)

Some sources question the claims for massive impending wealth transfers, saying that Boomers may spend most of their money, or that the newly rich young beneficiaries will mismanage their portfolios. Apparently it's difficult for some of us to accept the reality of a worsening disparity in U.S. wealth. 

The Rich Kids will have Learned How to Avoid the Public Good 

Skipping out on tax obligations will start right away, as over 99.8 percent of estates are not currently required to pay any estate tax. 

Here's another way for the young heirs to skip out on taxes: Offshore hoarding of private American wealth is estimated to be $3.3 trillion (4% of U.S. $82 trillion financial wealth).

And yet another way: Make a fortune, then move out of the country and renounce U.S. citizenship to avoid taxes. Most infamous for this strategy was Facebook co-founder Eduardo Saverin, who turned decades of American technology research into a billion-dollar fortune before bolting to Singapore and giving up his U.S. citizenship. There are more of these tax avoiders every year. Tech billionaires are building their doomsday bunkers in relatively safe faraway places like New Zealand, the home of the world’s most unaffordable house prices. 

Still another way to shirk responsibility, while looking altruistic: Set up a donor-advised fund with a charitable-sounding name. Rich donors can get immediate tax deductions, while the recipients of their largesse don't actually have to use the money for charitable causes, and the fund directors can pay themselves handsome undisclosed salaries. 

The Rich Kids will have Private Doctors, Police, and Firefighters 

The kids will never have to worry about health care. They'll continue their parents' trend of paying 'concierge' doctors to visit their mansions or yachts, where emergency rooms are equipped with heart monitors, ultrasounds, x-ray machines, and blood analyzers. If a hospital stay is required, they might look into a $2,400 per day penthouse hospital suite complete with butler and grand piano. 

In case of fire, they can follow the example of Kanye and Kim and hire a private firefighting service. 

For security, the already proliferating private police forces are certain to fill the protection needs of the kids with newly-acquired estates. But private officers tend to be undertrained compared to public police; their acts of aggression are rarely reported; and in some states private forces are not even subject to investigation through the Freedom of Information Act. 

The Growing Number of Poor Kids 

The expected growth in inequality is shown dramatically in a 2017 report by the Institute for Policy Studies, which predicts ZERO median Black household wealth by the year 2053, if current trends continue. Median Latino household wealth would hit zero twenty years later. Right now the poverty rates for Black and Hispanic kids are 30 and 26 percent, respectively. Overall, for all demographic groups, income instability and debt are diminishing the quality of life for middle- and lower-class families with children. It's frightening to anticipate a worsening poverty rate for children already largely ignored by the privileged members of society. 

Democrats have not been the answer to all this. Both Barack Obama and Bill Clinton were buddies with Wall Street; Obama spent public money on drone warsClinton decimated the safety net and increased mass incarceration. 

Greater equality of wealth and opportunity can only be achieved through progressive policies, now and in 2020. That is the hope of people who care about the needs of society rather than one's position on a billionaire list.

***

Reposted from Common Dreams

Paul Buchheit teaches economic inequality at DePaul University. He is the founder and developer of the Web sites UsAgainstGreed.org, PayUpNow.org and RappingHistory.org, and the editor and main author of “American Wars: Illusions and Realities” (Clarity Press). He can be reached at paul@UsAgainstGreed.org.

Posted In: Allied Approaches

Union Matters

Get to Know AFL-CIO's Affiliates: National Association of Letter Carriers

From the AFL-CIO

Next up in our series that takes a deeper look at each of our affiliates is the National Association of Letter Carriers.

Name of Union: National Association of Letter Carriers (NALC)

Mission: To unite fraternally all city letter carriers employed by the U.S. Postal Service for their mutual benefit; to obtain and secure rights as employees of the USPS and to strive at all times to promote the safety and the welfare of every member; to strive for the constant improvement of the Postal Service; and for other purposes. NALC is a single-craft union and is the sole collective-bargaining agent for city letter carriers.

Current Leadership of Union: Fredric V. Rolando serves as president of NALC, after being sworn in as the union's 18th president in 2009. Rolando began his career as a letter carrier in 1978 in South Miami before moving to Sarasota in 1984. He was elected president of Branch 2148 in 1988 and served in that role until 1999. In the ensuing years, he worked in various roles for NALC before winning his election as a national officer in 2002, when he was elected director of city delivery. In 2006, he won election as executive vice president. Rolando was re-elected as NALC president in 2010, 2014 and 2018.

Brian Renfroe serves as executive vice president, Lew Drass as vice president, Nicole Rhine as secretary-treasurer, Paul Barner as assistant secretary-treasurer, Christopher Jackson as director of city delivery, Manuel L. Peralta Jr. as director of safety and health, Dan Toth as director of retired members, Stephanie Stewart as director of the Health Benefit Plan and James W. “Jim” Yates as director of life insurance.

Number of Members: 291,000 active and retired letter carriers.

Members Work As: City letter carriers.

Industries Represented: The United States Postal Service.

History: In 1794, the first letter carriers were appointed by Congress as the implementation of the new U.S. Constitution was being put into effect. By the time of the Civil War, free delivery of city mail was established and letter carriers successfully concluded a campaign for the eight-hour workday in 1888. The next year, letter carriers came together in Milwaukee and the National Association of Letter Carriers was formed.

More ...

There is Dignity in All Work

There is Dignity in All Work