By Sam Ross-Brown | Dec 02, 2015
Over the past few months, Bernie Sanders has repeatedly declared that the top one-tenth of 1 percent of U.S. earners own nearly as much wealth as the bottom 90 percent. That claim has drawn the skeptical scrutiny of PolitiFact, which attributed it to a study by Emmanuel Saez and Gabriel Zucman late last year. PolitiFact’s verdict: Mostly True.
But a new study released Wednesday by the Institute for Policy Studies shows that Sanders is spot on—and that he may even be underestimating the nation’s yawning wealth gap. Not only do the top one-tenth of 1 percent of Americans own more than most Americans put together, but the nation’s top 20 richest people own as much wealth as the entire bottom half of U.S. earners. That’s a sliver about 15,000 times smaller than the already superrich one-tenth of 1 percent.
Put another way, the 20 individuals who possess more wealth between them than 152 million Americans can fit together comfortably inside one Gulfstream G650 luxury jet. And just who are these 20? Not surprisingly, the list includes the likes of Microsoft co-founder Bill Gates; billionaire industrialists Charles and David Koch; casino magnate Sheldon Adelson, and Berkshire Hathaway CEO Warren Buffett.
A Gulfstream G650 about to land.
“It’s a stunner,” says the study’s coauthor Chuck Collins, a senior scholar at the Institute for Policy Studies, a progressive think tank. “I think people haven’t fully connected the dots until now.”
While previous studies, like the Saez-Zucman paper that bolsters Sanders’ claims, have used Federal Reserve data on household wealth to explore stratification, Wednesday’s report for the first time compares those figures with a much smaller group, namely the Fortune 400 annual list of the wealthiest Americans. That group has a combined net worth of $2.34 trillion, the study found, more than a full 62 percent of Americans—more also than the nation’s entire black population.
But staggering as they are, these figures still don’t paint the full picture, says Collins. That’s because they only represent taxable wealth that is not held in offshore accounts or siphoned through complex tax loopholes. According to a separate study published earlier this year by the Boston Consulting Group, offshore tax havens represent as much as $10 trillion globally, with as much as one quarter of that held by individual Americans. That pool of secret wealth accounts for $200 billion in lost tax revenue every year, while another $100 billion is lost through such complex loopholes as the Grantor Retained Annuity Trust, a financial instrument that allows wealthy families to avoid gift taxes on large estates.
“It may be that we’re only seeing half the wealth,” says Collins. Moreover, he adds, publicly disclosed wealth is shrinking while undisclosed offshore assets expand: “Going forward, more of this wealth is going to vanish into these tax havens and trusts beyond the reach of any kind of reporting.”
Part of the study’s purpose, says Collins, is to put the debate over wealth inequality into a larger context. While such issues as the minimum wage and student debt tend to dominate the debate, other more arcane forces that concentrate wealth, such as tax avoidance and antitrust policies, draw less notice.
“It’s harder for the media to talk about those issues,” says Collins. “Part of our motivation for this study is to say we can raise the floor but we have to tackle these concentrations of wealth or they will continue to distort the democratic process.”
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By Sam Ross-Brown | Nov 05, 2015
The United States Trade Representative released the full text of the Trans-Pacific Partnership today, one month after negotiators finalized the massive 12-nation pact in Atlanta. The release kicks off a 90-day window before President Obama can sign the deal and turn it over to Congress for approval.
In a statement released today on Medium, Obama said the deal “puts American workers first,” and claims it represents “the strongest labor standards in history” and “the strongest environmental standards in history.” Supporters like Tom Malinowski, assistant secretary of state for democracy, human rights, and labor, have pointed to provisions like the bilateral labor rights agreement between the U.S. and Vietnam as proof that TPP puts workers first. The agreement would purportedly ensure basic workplace standards and organizing rights among Vietnamese workers.
But experts and activists on the left have had a somewhat different first impression. Within hours of the text’s release, leading environmental, labor, and civil liberties groups blasted the deal for its lackluster provisions on workers rights, climate change, and human rights.
“We now have concrete evidence that the Trans-Pacific Partnership threatens our families, our communities, and our environment,” said Sierra Club President Michael Brune in a statement released today. In its initial review of the pact, the Sierra Club pointed to the pact’s failure to outlaw illegal trade in plants and animals, illegal fishing, or commercial whaling, all of which remain critical conservation issues for TPP signatories Peru, Vietnam, Japan, and Singapore. At the same time, the TPP gives corporations the power to roll back existing environmental regulations through the investor-state dispute settlement (ISDS) process, the group added. The statement from Sierra also noted that, amazingly, the final text does not once mention climate change.
Jason Kowalski, policy director at 350.org, went further. “The TPP is an act of climate denial,” he said today in a statement. “While institutions across the planet are divesting from fossil fuels, the TPP would double down on the industry’s destructive business model.” Like Sierra, 350.org also expressed alarm at what an expanded ISDS system could do to local environmental regulations. “In short, these rules undermine countries’ ability to do what scientists say is the single most important thing we can do to combat the climate crisis: keep fossil fuels in the ground,” Kowalski said.
Experts like Human Rights Watch’s John Sifton have also cast doubt on provisions like the labor rights agreement with Vietnam. “It is not enforceable in practice,” he told The New York Times today. Sifton pointed out that, unlike corporations, workers in Vietnam will have no rights to bring complaints against countries or companies to the newly-empowered investor-state dispute bodies. He also alluded to the U.S. Trade Representative’s poor record on workers’ rights in previous trade pacts.
The view from the American labor movement has been no rosier. The Communications Workers of America, one of the first major unions to respond publicly to the deal, expressed concern today about what the ISDS process could mean for labor and environmental laws in the U.S. The CWA also noted that while hundreds of official trade advisers—mostly representing business—had a direct hand in the TPP’s six-year negotiation, the public is given just a 90-day review.
On Twitter, the International Brotherhood of Teamsters noted that the TPP includes no penalties for human trafficking, while also pointing out that Vietnam has a full five years to implement its much-touted labor policies, and that enforcement will likely be minimal.
This sentiment was echoed by AFL-CIO President Richard Trumka, who also lamented the “expansive new legal rights and powers” corporations may soon use to challenge existing workplace, environmental, and financial protections. Trumka also noted that as the TPP was being negotiated, “our policy recommendations and those of our trade reform allies in the environmental, consumer, public health, global development, and business sectors were largely ignored.”
As The Washington Post has reported, the TPP’s negotiation process has long been heavily lopsided toward major corporations and away from labor, environmental, and citizen’s groups. Out of 566 official trade advisers, 480 have represented corporations and trade groups while less than 30 have represented organized labor. Over the past six years, the AFL-CIO alone has requested more than 100 specific changes in the TPP’s wording, but has little to show for it. As the AFL-CIO put it in a 2014 statement, “because the U.S. government treats trade deals differently than all other policies—it is allowed to negotiate rules that affect our lives in these areas behind closed doors. This is undemocratic.”
All that being said, TPP is far from a done deal. With the pact headed to Congress it will face an uphill battle from populist wings in both parties. At the same time, the TPP has also faced strong criticism from leading White House contenders Hillary Clinton, Bernie Sanders, and Donald Trump, who may help shape the conversation as Congress prepares to vote.