 12th April 07 - Joel S. Hirschhorn, The Progress ReportAmericans have always accepted a certain level of economic inequality as the inevitable consequence of an open capitalist society where some people through their own efforts do better than others. The presumption is that there is fairness in the marketplace and economic system. What a quaint, outdated belief.
Do most Americans really believe that the game is not rigged by rich powerful elites to preferentially benefit them? As certain as the law of gravity, the game IS rigged, and more than ever. |
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 3rd April 07 - David R. Francis, The Christian Science Monitor The United States could dramatically reduce poverty – if it really wanted to. Instead, the number of American households in severe poverty (those with incomes less than half that of the official poverty level) has been growing, not shrinking. “Poverty persists, not because we lack effective antipoverty policy options, but because we lack the political will to expand our policies,” says Sheldon Danziger of the National Poverty Center, University of Michigan, Ann Arbor. In 1964, President Lyndon Johnson launched the War on Poverty with the goal of lifting the “forgotten fifth” of the nation above the official poverty line. His economists predicted success by 1980 as the benefits of economic growth were shared over the years. |
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 2nd April 07 - David Cay Johnston, New York times Income inequality grew significantly in 2005, with the top 1 percent of Americans - those with incomes that year of more than $348,000 - receiving their largest share of national income since 1928, analysis of newly released tax data shows.The top 10 percent, roughly those earning more than $100,000, also reached a level of income share not seen since before the Depression. While total reported income in the United States increased almost 9 percent in 2005, the most recent year for which such data is available, average incomes for those in the bottom 90 percent dipped slightly compared with the year before, dropping $172, or 0.6 percent. The gains went largely to the top 1 percent, whose incomes rose to an average of more than $1.1 million each, an increase of more than $139,000, or about 14 percent. |
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 28th March 07 - David Cronin, Inter Press Service The 50th anniversary of the European Union has been marked by a declaration committing the 27-country bloc to "drive back poverty, hunger and disease" throughout the world.
But will this statement in the two-page Berlin Declaration, signed by German Chancellor and head of the Union's rotating presidency Angela Merkel, usher in a set of new EU policies that displays a genuine desire to further the interests of the poor?
The 1957 Treaty of Rome, which led to the EU's foundation, was drawn up at a time when Europe's colonial powers faced a changing relationship with the territories they controlled. Some 23 countries in sub-Saharan Africa won independence in 1956-60. |
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23rd March 07 - Christian Lehmann, The UC Atlas of Global Inequality Basu makes three main points in this article. First, he gives a brief historical overview of global inequality. Second, he describes the channels to which income inequality increases due to globalization. Last, he proposes the bottom quintile income of a poor country as a focus for policy makers and calls for a new international organization that helps coordinate inter-country anti-inequality policies On the one hand, the world has become more globalized and much more prosperous in the last 5 centuries. On the other hand, inter-regional inequality has grown. If one tracks per capita GDP of the large regions of the world, the growing disparity is obvious; The richest region was 1.8 times richer than the poorest half a millennium ago, whereas, currently, the richest region has a per capita income that is 20 times the income of the poorest region. Basu uses the Gini Coefficientto explore income inequality. He finds different results depending on the way the Gini is computed; if we compare per capita income the Gini increased over the last decades. If we compare the income of countries as whole the Gini has been declining almost monotonically since the late 1960s. The latter is driven in large measure by the strong economic growth in China since the late seventies and India since the early nineties. Basu states that one of the biggest problems of rapid globalization is that the wages of unskilled labor in poor countries will lag behind the wages of skilled labor. Therefore, income inequality within poor nations increases as a consequence of globalization. He criticizes the traditional objective of policymakers to maximize each country’s per capita income. He proposes another normative criteria which he calls the ‘quintile axiom’. That is, policy makers should be concerned about the income of the poorest 20% of the population. Evaluating an economy using the bottom quintile income makes a large difference in absolute numbers and changes rankings of countries sharply (table below). The first column shows the annual per capita income. The third column shows the annual per capita income of the poorest 20% of the country. For example, using per capita income yields a similar picture for Norway and the US. But the bottom quintile income of the US is almost half that of Norway indicating that the poor in Norway are better off than the poor in the 
His defense against critics that this measure, unlike the UNDP the Human Development Index, does not consider the non-income aspects of development is that, in general, quintile incomes will have a closer relation to other wellbeing-indicators, like infant mortality, life expectancy and so on, than per capita incomes. Basu is interested in suggesting a measure that is simple and easy to understand. Basu urges the need for a new international organization or a division of an existing international organization that helps coordinate inter-country anti-inequality policies. Achieving greater global equality may require the use of policy interventions that are coordinated across countries. “Unilateral effort by a country is likely to cause flight of capital and skilled labor from the country and impoverish those who stay behind”. Economic Game Theory calls this a ‘Prisoner’s Dilemma’. That is, for each country it is individually rational to stay away from actions to reduce global inequality, although the world as a whole would benefit. WTO, ILO, UNEP are agencies designed to reduce such coordination problems. But there is no such agency for anti-poverty and anti-inequality issues. Kaushik Basu (2006), ‘Globalization, Poverty and Inequality: What is the relationship? What can be done?’ World Development, vol. 34 . Summary by Christian Lehmann Link to original source |
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James Petras examines the recent proliferation of billionaires and argues that countries of ‘surging billionaires’ produce burgeoning poverty, submerging living standards, and that the making of billionaires means the unmaking of civil society – the weakening of social solidarity, protective social legislation, pensions, vacations, public health programs and education.
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 15th March 07 - Jennie Daley, The Ithica Journal
One Cornell University professor’s research shows that each American has a 50 percent chance of living in poverty for at least a year. Tom Hirschl, a professor in the Department of Sociology, did a statistical analysis in 2001 of people 25 to 75 years old and found there was an equal chance that anyone could experience a year in poverty or a year of affluence over the course of their lives. "America is a dream and a nightmare at the same time," Hirschl said. Whether we require services or help pay for them, all of us are affected. The Ithaca Journal will explore the impact of poverty in Tompkins County throughout 2007. A special report will be published on Saturday in The Ithaca Journal and online at www.ithacajournal.com. |
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