Trends

Trends

In its publications, policies and programs, the Foundation articulates the view that America's leaders and media give insufficient attention to many negative trends. Here are some examples:

Child poverty

During the 1980's, child poverty increased by 23%. Today, over 20% of all American children age 5 and under are living in poverty and 42 % live in low income families, in spite of "welfare reform", according to the National Center for Children and Poverty at Columbia University.1 By comparison, the corresponding child poverty rate is about 15% in Canada, 12% in Japan, 7% in France, 4% in Belgium and 2% in Finland.2 Five years into the new millennium, we have phenomenal prosperity in the United States. Yet the poor are barely better off than in the 1980s, in spite of the economic boom of the 1990s. And the extremely poor are worse off.3

Unemployment and Underemployment

The federal government currently claims an unemployment rate of about 5%. Yet the Economic Policy Institute in Washington, DC estimates that the rate of underemployment is about 8.9% when one takes into account official unemployment rates, the number of people who have stopped trying to find jobs and who therefore are not counted, and persons working part-time who want to work full time. (Much of this under-employment is associated with temporary jobs that offer few, if any, benefits.) The United States Department of Labor has concluded, "The employment rate for out-of-school youth in high-poverty areas typically is less than 50 percent." The Center for Community Change in Washington, DC has estimated that the "job gaps" is about 4.4 million jobs nationally. Of that, perhaps half of the jobs needed are in the inner city.4

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Income inequality: The 1980s

During the trickle-down, supply-side economics that dominated the 1980s in America, the rich got richer and the poor got poorer, according to conservative author Kevin Phillips and many others. The working class also got poorer. The middle class stayed about the same, so it lost ground to the rich.5

Income inequality: The 1990s

In the 1990s, the large income gaps of the 1980s actually widened. The incomes of the best-off Americans rose twice as fast as those of middle-income Americans, according to the Congressional Budget Office. The gap between rich and working-income Americans rose even more. Income differences between the haves and the have-nots are growing faster in America than in any industrialized democracy. In countries where reliable information exists, the United States is second only to Russia in having the smallest middle class and the highest poverty rates.6

Income inequality: The new millennium

Income inequality continues to increase to the point that in 2004, the top 20 percent earned more than the bottom 80 percent combined.  The next year, 2004-2005, the poorest fifth saw their gross income increase .6 percent, the middle class saw their gross income increase .9 percent and the richest 5 percent saw their gross income increase by 3.1 percent.  However, when one takes into consideration the rate of inflation, real household income declined 2.7 percent between 2000 and 2005.  For the non-elderly, the loss was 5.4 percent. Also, the minimum wage is now at its lowest level in 56 years.6b

Wealth inequality

The increase in wealth inequality during the 1980s was virtually unprecedented. The only comparable period in America in the twentieth century was 1922-1929, before the Great Depression. During the 1980s, 99% of the wealth gained went to the top 20% of wealth holders in America -- and the top 10% gained 62% of that. The median wealth of nonwhite American citizens actually fell during the 1980s. The average level of wealth of an African-American family in America today is about one-tenth of an average white family. Wealth inequality is much worse in the United States than in countries traditionally thought of as "class ridden," like the United Kingdom.7

CEO-worker inequality

In 1980, the average corporate CEO earned 42 times as much as the average worker. In 1998, the average corporate CEO earned 419 times as much as the average worker. Today, the average Fortune 500 CEO earns 443 times as much as Hourly workers in their companies.  Typical of this pattern of disparity is the CEO of Wal-Mart, who earns 871 times as much as the average U.S. Wal-Mart worker. These figures do not include benefits, such as health care and pensions, which represent an increasingly large share of compensation, but are often not offered to employees. The burden of healthcare for these employees is then born by the taxpayers, who subsidize each Wal-Mart employee by over $2100 per year. 8

Resegregation

According to Professor Gary Orfield and his colleagues at the Harvard School of Education, America is resegregating in its neighborhoods and schools. Over two-thirds of all African-American and Hispanic students in urban areas attend predominantly segregated schools. Over two-thirds of those cannot achieve minimally acceptable scores on standardized tests.9

Prison building instead of higher education

Today, the states spend more on prison building than on higher education construction, whereas ten years ago, the opposite was true.10

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Prison building as America's housing policy for the poor

In the 1980s, prison building became our national housing policy for the poor. We more than quadrupled the number of prison cells, and at the same time we reduced appropriations for housing the poor at the federal level by over 80%. Today, 2.1 million people are incarcerated in America.11

Prison building and race discrimination

In the early 1990s, one out of every four young African-American men in America was in prison, on probation or on parole at any one time, according to the Sentencing Project in Washington, DC. Yet today, and after a Presidential Commission on Race, one out of every three young African-American men is in prison, on probation or on parole at any one time in America. In big cities, the number is one out of every two.12 Similarly, we know from Professor Milton Friedman, the conservative economist, that the rate of incarceration of African-American men in America today is four times greater than the rate of incarceration of black men in pre-Mandela apartheid South Africa. Nonetheless, the fastest growing group of male prison inmates consists of Latinos.13

Sentencing and race discrimination

There is deep racial bias in our juvenile justice and criminal justice system, especially in our mandatory minimum sentences when it comes to drugs. For example, sentences for crack cocaine, used disproportionately by minorities, are greater than sentences for powder cocaine, used disproportionately by whites. As a result of these and related practices, America's prisons are disproportionately populated by minorities.14

Race discrimination and the prison-industrial complex

At the same time, prison building has become a job generating, economic development policy for rural white Americans, who now send lobbyists with six-figure incomes to Washington to fight for still more prisons, as part of the emerging prison-industrial complex.15

Criminal justice policy is just "running in place"

Yet we know, based on the most prestigious American study of prison building to dateby the National Academy of Science, that the criminal justice response to crime is, at most, "running in place".16

Crime and justice

The final report of the National Violence Commission of 1969 was titled (from the Constitution) To Establish Justice, To Insure Domestic Tranquility. Yet, since that report, racial injustice in the criminal justice system has increased. Income, wage and wealth inequality and injustice also have increased. As for domestic tranquility, in spite of a (welcome) reduction in violent crime of the 1990s, present violent crime and fear are roughly at the same levels as in the late 1960s, even though America has had a seven-fold increase in incarceration.17

Notes and sources

1. National Center for Children in Poverty. Columbia University. Young Children in Poverty, March, 1998.

2. Jeff Faux, "Lifting All Boats," chapter prepared for To Establish Justice, To Insure Domestic Tranquility: (Washington, DC: The Milton S. Eisenhower Foundation, 1999.)

3. Peter Edelman, "Who Is Worrying About the Children?" Washington Post, August 11, 1999, p. A18.

4. Center for Community Change, Newsletter (Issue 19, Fall 1997); Federal Register, Volume 64, Number 105, Wednesday June 2, 1999, p. 29672; Alan Okagaki, Developing a Public Policy Agenda on Jobs (Washington, D.C.: Center for Community Change, 1997). Jerry Jones, Federal Revenue Policies That Work: A Blueprint for Job Creation to Support Welfare Reform (Washington, D.C.: Center for Community Change, 1997). William Julius Wilson, When Work Disappears: The World of the New Urban Poor (New York: Knopf, 1996). Lawence Mishel, Jared Beunstein and John Schmitt, The State of Working America (CornellUniversity Press, 2000).

5. Kevin Phillips, The Politics and Rich and Poor (New York: Random House, 1990). Jason DeParle, "Richer Rich, Poorer Poor, and a Fatter Green Book," New York Times, May 26, 1991; Alan Curtis, Family, Employment and Reconstruction (Milwaukee: Family Service America, 1995); U.S. Census, Historical Poverty Tables (Washington, D.C.: U.S. Census, 1997); Children&'s Defense Fund, The State of America&'s Children (Washington, D.C.: Children&'s Defense Fund, 1994); Felicity Baringer, "Rich-Poor Gulf Widens among Blacks, New York Times, Sept. 25, 1992.

6. Doug Henwood, "The Nation Indicators," Nation, March 29, 1999, p. 10. Alan Wolfe, "The New Politics of Inequality," New York Times, September 22, 1999, p. A27.

6b. Lawrence Mishel, Jared Bernstein and Sylvia Allegretto, The State of Working America, 2006/2007 (Washington, DC: Economic Policy Institute, 2006).

7. Keith Bradsher, "Gap in Wealth in U.S. Called Widest in West," New York Times, April 17, 1995; Edward N. Wolff, Top Heavy (New York: The New Press, 1995); Editorial "The Tide Is Not Lifting Everyone," New York Times, September 30, 1997; and Glenn C. Loury, "Unequalized," New Republic, April 6, 1998.

8. Alan Wolfe, "The New Politics of Inequality," New York Times, September 27, 1999, p. A27. Wal-Mart's Pay Gap, (Washington, DC: Institute for Policy Studies, 2005).

9. Gary Orfield, "Segregated Housing and School Desegregation," in Gary Orfield, Susan E. Eaton and the Harvard Project on School Desegregation, Dismantling Desegregation: The Quiet Reversal of Brown vs. Board of Education (New York: New Press, 1996).

10. Robert Suro, "More Is Spent on New Prisons Than Colleges,"Washington Post, February 24, 1997; and Beatrix Hamburg, "President&'s Report," Annual Report, 1996 (New York: William T. Grant Foundation, 1997).

11. John Atlas and Peter Drier, A National Housing Agenda for the 1990s, (Washington, D.C.: National Housing Institute, 1992); Alan Curtis, Family, Employment and Reconstruction; and Sentencing Project, Crime Rates and Incarceration: Are We Any Safer? (Washington, D.C.: Sentencing Project, l992).

12. Mark Mauer, Young Black Men and the Criminal Justice System (Washington, D.C.: Sentencing Project, 1990); Mark Mauer, Intended and Unintended Consequences: State Racial Disparities in Imprisonment (Washington, D.C.: Sentencing Project, 1997); Vivien Stern, The Future of A Sin (Boston; Northeastern University Press, 1998); Marc Mauer, Race to Incarcerate (New York: The Free Press, 1999); and David Cole, No Equal Justice (New York: The New Press, 1999).

13. Milton Friedman, "There&'s No Justice in the War on Drugs,"The New York Times, January 11, 1998.

14. Elliott Currie, Crime and Punishment in America (New York: Metropolitan Books, 1998); Editorial, "Crack Sentences Revisited," Washington Post, May 5, 1997. Fox Butterfield, "Racial Desparities See As Pervasive in Juvenile Justice", The New York Times, April 26, 2000.

15. James Brooke, "Prisons: Growth Industry for Some," New York Times, November 2, 1997. Also see Steven R. Donziger, The Real War on Crime: Report of the National Criminal Justice Commission (New York: Harper Collins, 1996).

16. Jeffrey A. Roth, "Understanding and Preventing Violence," in Research in Brief (Washington, D.C.: National Institute of Justice, 1994); and Richard A. Mendel, Prevention or Pork? A Hard Look at Youth-Oriented Anti-Crime Programs (Washington, D.C.: American Youth Policy Forum, 1995).

17. The Milton S. Eisenhower Foundation, To Establish Justice, to Insure Domestic Tranquility. A Thirty Year Update of the National Commission on the Causes and Prevention of Violence. (Washington, DC: The Milton S. Eisenhower Foundation, 1999.)

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