Tag Archives: capitalism

Milwaukee Rep’s ‘Invisible Hand’ questions the morality of capitalism

Last year, the Milwaukee Rep announced a singular partnership with playwright Ayad Akhtar, a Milwaukee native who’d since made it big both on stage and in other written media. The four-year collaboration will see the Rep producing three of Akhtar’s plays, including his Pulitzer Prize-winner Disgraced, followed by a world premiere commission in the final year.

If the first of these plays, The Invisible Hand, is any indication, it’s going to be a great four years for Rep patrons. Akhtar’s thriller about an American banker kidnapped by militants in Pakistan is a gripping work in and of itself, but its true success comes from the way it challenges the assumed benevolence of capitalism using the language of the marketplace itself.

Technically, no economics primer is necessary before walking into this production — Akhtar places just the right amount of exposition in the mouth of captured American Nick Bright (Tom Coiner) to get even the most financially illiterate viewer through the show.

But it certainly can’t hurt to know in advance that the play’s title references the core belief that guides Nick and every mainstream Western economist and financier. The “invisible hand,” a term coined by 18th-century Scottish philosopher Adam Smith, is the moral justification for having a free market, capitalist system, like that of the United States and other Western nations. It argues that a free market tends toward benevolence because individuals will act in their own self-interest and counter others’ attempts to unfairly profit.

The problem, as the play quickly makes apparent, is that those who know how to play the game have an advantage over those who don’t. The militants who have captured Nick — Imam Saleem (Tony Mirrcandani), his lieutenant Bashir (Shalin Agarwai) and grunt Dar (Owais Ahmed) — are all dedicated to fighting the corrupt Western imperialists, but they’re outgunned on both a military and financial level.

Nick changes that. When the U.S. government formally declares Imam Saleem a terrorist — making it impossible for them or Nick’s family to negotiate a ransom for his release — the only option remaining is for Saleem to trade Nick to the fundamentalist group responsible for the death of Americans including Daniel Pearl, who will kill him as propaganda. Nick offers an alternative: With his knowledge of the global and local markets, Nick will teach Bashir how to make millions buying and selling financial securities.

Nick (Tom Coiner, left) and Bashir (Shalin Agarwal) share a complicated prisoner-captor/teacher-mentor relationship in "The Invisible Hand." Photo by Michael Brosilow.
Nick (Tom Coiner, left) and Bashir (Shalin Agarwal) share a complicated prisoner-captor/teacher-student relationship in “The Invisible Hand.” Photo by Michael Brosilow.

This sounds dry, but never becomes so on stage — largely due to the high-speed, high-stakes nature of the game Nick and Bashir are playing. At one point, the teacher describes the method to his trainee as gambling on the marketplace, betting that a company’s fortunes will rise, or fall, and buying and selling accordingly. As we watch the two of them place their bets, the tension does begin to resemble a Vegas casino as much as a claustrophobic Pakistani prison cell — albeit one where failure will result in the loss of millions of dollars and Nick’s life.

Coiner and Agarwai carry the bulk of the production, their characters a curious and volatile mix of friends, rivals and mortal enemies. At first, this is a sustainable equilibrium — Nick has all the knowledge and Bashir all the power. But the more Bashir learns, the more dangerous and unstable he becomes, with his religious beliefs warring with his new capitalist understandings. It’s a dissonance Agarwai wears well. Every moment he’s on stage, he commands attention, and it’s never clear what he’s going to do next.

Interestingly, The Invisible Hand doesn’t show Nick adopting a similar uncertainty. True to form, from the moment the play starts, every action he takes is in his own self-interest: he agrees to play the markets to save his life, chips away at the bricks and mortar of his cell to try and make his own escape, remains silent and focused on self-preservation when his captors begin to grow suspicious of each other. But this time, Nick doesn’t have the Western luxury of being removed by class and distance from the consequences of those actions — ones that will eventually be countered, as his theory of the invisible hand promises, but lead to violent instability in the interim.

The Invisible Hand is almost a parable in this way, explaining the moral ambiguity of capitalism and the free market through the use of a vivid, captivating narrative. But it’s a parable that haunts long after you leave the theater — because if the only way to defeat a morally bankrupt society is to use its own weapons against it, that may not be a victory at all.

The Milwaukee Rep’s production of The Invisible Hand runs through April 3 in the Stiemke Studio, 108 E. Wells St. Tickets start at $20 and can be ordered at 414-224-9490 or milwaukeerep.com.

Census: Income, poverty numbers stay just about the same

The wallets of America’s middle class and poorest aren’t seeing any extra money, the U.S. Census reported this month, a financial stagnation experts say may be fueling political dissent this campaign season.

The Census Bureau, in its annual look at poverty and income in the United States, said both the country’s median income and poverty rate were statistically unchanged in 2014 from the previous year.

Median income — the point where half of the households have income below it and half have income above it —  showed no statistically significant change, despite the small drop to $53,700 in 2014 from 2013’s $54,500. Median income is a broad measure of the economic health of the middle class.

The poverty rate also showed no statistically significant change. In 2014, the poverty rate in the United States was 14.8 percent, which was the same as in 2013. The poverty rate had dropped in 2013 from 15 percent in 2012, the first such drop since 2006.

There were 46.7 million people in poverty, which is also a statistically similar number from the previous four years. In 2014, a family with two adults and two children was categorized as in poverty if their income was less than $24,008.

Census officials said they weren’t surprised by the flat numbers. “It’s not unusual for it not to go down two years in a row,” said Trudi J. Renwick, chief of the Poverty Statistics Branch in the bureau’s Housing and Household Economic Statistics Division.

The White House focused on the fact that some of the numbers increased, though census officials noted the change was not significant. “Real median income for family households rose $408 in 2014, while real median income for non-family households also rose but overall median household income declined,” administration officials said in a news release.

Republicans argued that the stagnating numbers reveal a need for change to the country’s welfare programs.

“Our current approach to fighting poverty, though well-intended, is failing too many Americans,” said House Ways and Means Committee Chairman Paul Ryan, a Wisconsin Republican. “This disappointing data, five years into an economic recovery, underscores the need for a new effort to modernize our country’s safety net programs.”

The latest numbers will feed into the 2016 political debate, with both parties trying to position themselves as advocates for the middle class.

The numbers may explain some of the political furor going on in the country, said Lawrence Mishel, president and CEO of the liberal Economic Policy Institute. “Anyone wondering why people in this country are feeling so ornery need look no further than this report,” Mishel said. “Wages have been broadly stagnant for a dozen years and median household income peaked in 1999.”

The Census report also showed that the number of uninsured Americans dropped in 2014, as the big coverage expansion in President Barack Obama’s law took effect. The share of the population uninsured the whole year was 10.4 percent, or 33 million people. When compared to 2013, nearly 9 million people gained coverage. A recent government survey that includes data from the first three months of this year shows that the uninsured rate continued to fall in 2015.

The report also said:

• Asian households had the highest median income in the United States at $74,300 in 2014. The median income for non-Hispanic white households was $60,300, for black households $35,400 and Hispanic households $42,500. The median income for white households decreased by 1.7 percent between 2013 and 2014, while there was no statistically significant change for black, Asian, and Hispanic households.

• The 2014 median earning of men was $50,400, while the median earning for women was $39,600. Neither number was statistically different from 2013.

• The median income of households maintained by the foreign-born increased 4.3 percent while the median income of households maintained by a native-born person declined 2.3 percent. The income of naturalized citizens and noncitizens were not statistically different from the year before.

• The number of men and women working full-time, year-round jobs increased by 1.2 million and 1.6 million, respectively, between 2013 and 2014. Census officials said the change suggested a shift from part-time, part-year work status to full-time, year-round employment.

Doctors, industry locked in vape debate over youth use

Cool Vapes on Pittsburgh’s McKnight Road is in an average-looking storefront at the foot of Ross Park Mall, sandwiched between a bridal shop and a cellphone outlet.

Inside, the place bustles with customers peering into glass cases full of flavored liquid nicotine with names like Strawberry Cheesecake, Fruity Fun and Crunchberry. Buyers heat the liquids with battery-operated devices and inhale the vapor in a process known as vaping.

The store contains several prominently placed signs warning: “You must be 18 years old to make a purchase.”

Legally, Cool Vapes does not need the signs. Pennsylvania is one of four states without age restrictions for purchasing electronic vaporizers, e-cigarettes and liquid nicotine, according to the American Vaping Association, an industry trade group.

Still, most vape shop owners in Western Pennsylvania maintain a casual agreement not to sell to minors.

“Selling to kids under 18 doesn’t send a good message,” said Cool Vapes owner R.J. Marino. “It’s a personal decision, and I think most vape shop owners agree. But do I have that legal right? Absolutely, at least for now.”

Anthony Fricchione, owner of Villain Vape Shop, which has stores in Lawrenceville, Cheswick and Butler, agreed.

“You would be hard-pressed to go into a vape shop and find an owner selling to teens,” he said. “Our goal is to help people quit smoking. Selling to minors is the last thing we want to deal with _ we’re already battling so much.”

One of those battles is Gov. Tom Wolf’s proposed 40 percent tax on e-cigarettes and vaporizers. On a national level, the Food and Drug Administration might soon classify liquid nicotine as a tobacco product, which members of the vaping industry say will lead to overregulation, hidden costs and red tape that could put them out of business.

“This industry is under consistent attack,” said Greg Conley, president of the AVA. “It’s new technology and confusing to some, so they’d just like to altogether eliminate it. We’re dealing with the toxic legacy of the tobacco industry.”

A recent study by JAMA Pediatrics said teenagers who try vaping or e-cigarettes are more likely to turn to traditional cigarettes for their nicotine fix and become addicted smokers. Researchers from the University of Pittsburgh, Dartmouth University and the University of Oregon surveyed young people from across the country.

A U.S. Centers for Disease Control and Prevention study produced similar results and indicated e-cigarette use among middle and high schoolers tripled from 2013 to 2014.

“In many ways, it’s the perfect starter cigarette for teens. It comes in flavors like chocolate or mango,” said Dr. Brian Primack, director of Pitt’s Center for Research on Media, Technology and Health and lead author of the JAMA Pediatrics study. “It’s electronic, it’s cool-looking, and it’s new. The problem is nicotine is one of the most addictive chemicals known to humans. Once you get addicted, you run the risk of needing more in the form of a traditional cigarette.”

Critics believe the e-cigarette industry markets to younger users with sleekly designed vaporizers and flavored juices.

“As a parent of an 8-year-old son, this stuff really scares me,” said Dr. Anil Singh, director of the breathing disorders center at Allegheny General Hospital. “If used in the right way and regulated, I can see some potential benefit for adults trying to quit smoking. But with the flavors and tools, it’s a great way for hooking young people in. I’d say it’s pretty dangerous.”

Bill Godshall, executive director of Smokefree Pennsylvania, scoffed at the JAMA Pediatrics study. He pointed to a recent CDC study that indicates teen smoking is at an all-time low.

“Cigarette smoking among youths is plummeting every year, but they say vaping is a gateway?” he said. “C’mon. I can’t believe JAMA is pushing this theory.”

As school let out at Taylor Allderdice High School in Squirrel Hill on a recent afternoon, a few students lit cigarettes as they walked down Forward Avenue. Oskar Porter, 15, a sophomore who was not smoking, said it’s not uncommon to see students vaping.

“I think some of the kids do it to be edgy,” he said. “And they can get away with it easier in the bathroom or the back of a classroom.”

Porter said he’s unsure whether vaping is a gateway to cigarettes, as studies suggest.

“I’ve seen plenty of kids who both vape and smoke cigarettes,” he said. “I’m not sure one leads to the other. They’re both pretty common.”

Published via the AP member exchange.

Pope Francis’ call for action on climate change fails to move Republicans

Pope Francis’ call for dramatic action on climate change drew a round of shrugs from congressional Republicans, while a number of the party’s presidential candidates ignored it entirely.

“I don’t want to be disrespectful, but I don’t consider him an expert on environmental issues,” said Texas Rep. Joe Barton, a senior Republican on the Energy and Commerce Committee, in a comment echoed by others in his party.

Even Capitol Hill’s Catholic Republicans, despite their religion’s reverence for the holy father, seemed unmoved by his urgent plea to save the planet. The reactions suggested that the pontiff’s desire to translate his climate views into real action to combat greenhouse gases could fall flat, at least as far as the American political system is concerned.

House Speaker John Boehner, R-Ohio, a Catholic who invited the pontiff to address Congress later this year, said the pope is not afraid to challenge thinking on various issues. “I respect his right to speak out on these important issues,” Boehner said, but he demurred when asked whether Francis’ views, made public in an encyclical released Thursday, might spur legislative action by the Republicans who run Congress.

“There’s a lot of bills out there. I’m not sure where in the process these bills may be,” Boehner said.

In the encyclical, a landmark foray by the Vatican into the area of environmental policy, Francis called for a bold cultural revolution, framing climate change as an urgent moral issue and blaming global warming on an unfair, fossil fuel-based industrial model that harms the poor most. He urged people of every faith to save God’s creation for future generations.

Francis is to address lawmakers in September in the first speech by a pope to Congress.

Francis enjoyed a 70 percent popularity rating in a poll by the Pew Research Center earlier this year; Congress, by contrast, routinely polls in the teens.

Yet despite his status as an exalted spiritual figure and leader of the world’s 1.2 billion Catholics, his pronouncements on climate were received much as a presidential address might be: with enthusiastic embraces from those who already agreed with him, and disavowals or silence from most everyone else.

President Barack Obama fell into the former category. “I welcome His Holiness Pope Francis’s encyclical, and deeply admire the pope’s decision to make the case – clearly, powerfully, and with the full moral authority of his position – for action on global climate change,” the president said in a statement.

The Republicans vying to replace Obama were not so full-throated. A number of them, including Sens. Ted Cruz of Texas and Rand Paul of Kentucky, did not respond to requests for comment or avoided answering when questioned by reporters on the topic.

Former Florida Gov. Jeb Bush questioned the pope’s foray into climate science when discussing the issue Wednesday ahead of the encyclical’s release.

“I don’t think we should politicize our faith,” he said.

A statement from a spokesman for former Texas Gov. Rick Perry did not directly mention Francis but said, “Gov. Perry believes the climate is always changing, but it’s not clear what role humans have in it.”

And an aide to Florida Sen. Marco Rubio directed reporters to comments Rubio made earlier this year seeming to question the pope’s decision to weigh in on Cuba.

Rubio and Bush, who converted, both are Catholics, as are several other GOP White House hopefuls. Catholics also are overrepresented on Capitol Hill, accounting for about 30 percent of members of Congress, compared with 22 percent of American adults, according to Pew.

It’s not the first time the Catholic Church’s teachings on political or social issues have created complications for Catholic lawmakers who take a different view. House Democratic leader Nancy Pelosi of California, who is Catholic, faced questions in the run-up to passage of Obama’s health care bill over her support for abortion rights in light of the church’s opposition.

But with his entry into the contentious politics of climate, and his attempt to reframe the issue in moral terms, Francis opened a new chapter in the long-running debate over the intersection of politics and religion.

And it was one that most Republicans did not particularly welcome.

“I think the pope needs to continue to study this,” said Sen. Jeff Sessions, R-Ala. “I think it will be given respectful treatment, but I don’t think it’s going to change a lot of votes.”

Thomas Piketty and ‘Capital in the 21st Century’ set the economics field ablaze

If you’d like to live in Downton Abbey, the good news is that our economy has entered a second Gilded Age of opulence and elegance. The bad news is that you’ll likely end up among the vast majority stuck sweating in the kitchen.

In a new book, Thomas Piketty, the French economist who helped popularize the notion of a privileged 1 percent, sounds a grim warning: The U.S. economy has begun to decay into the aristocratic Europe of the 19th century. Hard work will matter less, inherited wealth more. The fortunes of the few will unsettle the foundations of democracy.

The research Piketty showcases in his book, “Capital in the 21st Century,” has set the economics field ablaze. Supporters cite his work as proof that the wealth gap must be narrowed. Critics dismiss him as a left-wing ideologue.

Digging through 300 years of economic data, tax records, 19th century novels and modern TV shows, Piketty challenges the assumption that free markets automatically deliver widespread prosperity. Instead, he writes, the rich will get richer, and everyone else will find it nearly impossible to catch up.

Investments in stocks, bonds, land and buildings – the “capital” in his title – almost always grow faster than people’s wages. By its nature, capitalism fuels inequality and can destabilize democracies, Piketty argues.

Economists once viewed the three decades after World War II as proof of capitalism’s ability to build and share wealth. Piketty counters that the period was a historical outlier, a result of two world wars and the Great Depression leveling the fortunes of the old establishment.

In 2012, the top 1 percent of U.S. households received 22.5 percent of the nation’s income, the most since 1928. Piketty thinks higher taxes on wealth can curb inequality’s spread. He also thinks that sending more people to college and sharpening their skills through training could help slow the “inegalitarian spiral.”

In an interview with The Associated Press, Piketty, 42, held forth on the “dangerous illusion” of the meritocracy, why China is unfairly blamed for flat U.S. wages and his fix for limiting inequality.

Here are excerpts of the interview:

Q: What is the impact of a growing wealth gap?

A: The main problem to me is really the proper working of our democratic institutions. It’s just not compatible with an extreme sort of oligarchy where 90 percent of the wealth belongs to a very tiny group. The democratic ideal has always been related to a moderate level of inequality. I think one big reason why electoral democracy flourished in 19th century America better than 19th century Europe is because you had more equal distribution of wealth in America.

Q: Your research shows that profits on investments – capital – increase faster than wages and economic growth. But a lot of people think greater inequality can help fuel stronger growth.

A: When inequality gets to an extreme, it is completely useless for growth. You had extreme inequality in the 19th century, and growth was not particularly large.

Because the growth rate of productivity was 1 to 1.5 percent per year (in 19th century Europe), and it was much less than the rate of return to wealth, which on average was 4 to 5 percent, the consequence was huge inequality of wealth. It’s important to realize that innovation and growth in itself are not sufficient to moderate inequality of wealth.

Q: Are we automatically on a course that leads us back to the Gilded Age?

A: Nobody knows. The main message of the book is that there is no pilot in the plane. There is no natural process that guarantees that this is going to stop at an acceptable level.

Q: Would inequality matter if wages were still growing for the middle class?

A: There are two big forces that are squeezing the middle class. One is the rise of the very top executive compensation, which implies that the share of labor income going to the middle and lower class is shrinking. That has been quite spectacular in the U.S. The other force we see is that the share of a country’s income going to labor tends to decline when the share that goes to capital is rising.

Q: You call meritocracy a “dangerous illusion.” That goes against how a lot people think the U.S. economy works.

A: Our modern democratic ideal is based on the hope that inequalities will be based on merit more than inheritance or luck. Sometimes, meritocratic arguments are used by the winners of the game to justify the role of unlimited inequality. I don’t think there is any serious evidence that we need to be paying people more than 100 times the average wage in order to get high-performing managers.

Q: People in Europe and the United States have a nostalgic view of the post-World War II period. We saw growing national prosperity that benefited everyone. Is it possible to get back to that?

A: It was really a transitory period due to very exceptional circumstances. Growth was extremely high, partly because of post-war reconstruction. Also, growth was exceptionally high because population growth as a rule had been extremely large in the 20th century. This isn’t really an option for policymakers. The other reason I think we should not be nostalgic is that part of the reason the inequalities were lower in the `50s and `60s is that the wars destroyed some of the inherited capital that were the sources of earlier inequality.

Q: Why do you think a wealth tax would address the destabilizing force of rising inequality?

A: Instead of having a flat tax on real estate property, you would have a progressive tax on individual net worth. You would reduce the property tax for the people who are trying to start accumulating wealth.

Q: Every American politician says education is the answer to inequality and immobility. Is more education the answer?

A: This is the most powerful equalizing force in the long run. But it’s not enough. You need both education and taxation.

Q: How did watching U.S. TV shows like “House,” “Bones,” “West Wing” and “Damages” help you with this book?

A: They tell us stories about how you can get rich, get poor, etc. The people who are heroes of the series, many of them have Ph.Ds. They represent the model of skill-based inequality. … (The shows are) like novels in the 19th century. They’re able to show in an extreme way a kind of deep justification or deep criticism of the inequality structure.

Q: Your critics see you as pushing a political agenda about class divide.

A: This is a book about historical facts. People can do what they want to do with it. The book has four parts, and Part No. 4 is about policy implications. … To me, this isn’t the most important part. If you disagree with these 100 pages, that’s fine. The whole purpose of the first 500 pages is to help people to make their own conclusions.

President calls for higher minimum wage. Transcript

President Barack Obama, in a speech on economic mobility delivered on Dec. 4 in Washington, D.C., called for an increase in the minimum wage.

The speech came nearly a week after employees at Walmart staged national demonstrations to protest low wages and poor benefits at the world’s largest retailer and a day before workers at some fast-food restaurants across the country were expected to strike.

In the speech, the president said income inequality is the “defining challenge of our time.”

The federal minimum wage is $7.25 an hour or about $15,000 a year. A Senate proposal backed by the president would raise the minimum wage to $10.10, but Republicans in the House oppose the bill. Meanwhile, many activists in the fair wage movement want to see minimum wages of $15 an hour.

The president said minimum wage workers “work their tails off and are still living at or barely above poverty.” In real terms, their hourly wage, he said, “is below where it was when Harry Truman was in office.”

The following is a transcript of the president’s speech, provided by the White House:

Thank you.  (Applause.)  Thank you, everybody.  Thank you so much.  Please, please have a seat.  Thank you so much.  Well, thank you, Neera, for the wonderful introduction and sharing a story that resonated with me.  There were a lot of parallels in my life and probably resonated with some of you. 

Over the past 10 years, the Center for American Progress has done incredible work to shape the debate over expanding opportunity for all Americans.  And I could not be more grateful to CAP not only for giving me a lot of good policy ideas, but also giving me a lot of staff.  (Laughter.)  My friend, John Podesta, ran my transition; my Chief of Staff, Denis McDonough, did a stint at CAP.  So you guys are obviously doing a good job training folks.

I also want to thank all the members of Congress and my administration who are here today for the wonderful work that they do.  I want to thank Mayor Gray and everyone here at THEARC for having me.  This center, which I’ve been to quite a bit, have had a chance to see some of the great work that’s done here.  And all the nonprofits that call THEARC home offer access to everything from education, to health care, to a safe shelter from the streets, which means that you’re harnessing the power of community to expand opportunity for folks here in D.C.  And your work reflects a tradition that runs through our history — a belief that we’re greater together than we are on our own.  And that’s what I’ve come here to talk about today. 

Over the last two months, Washington has been dominated by some pretty contentious debates — I think that’s fair to say.  And between a reckless shutdown by congressional Republicans in an effort to repeal the Affordable Care Act, and admittedly poor execution on my administration’s part in implementing the latest stage of the new law, nobody has acquitted themselves very well these past few months.  So it’s not surprising that the American people’s frustrations with Washington are at an all-time high. 

But we know that people’s frustrations run deeper than these most recent political battles.  Their frustration is rooted in their own daily battles — to make ends meet, to pay for college, buy a home, save for retirement.  It’s rooted in the nagging sense that no matter how hard they work, the deck is stacked against them.  And it’s rooted in the fear that their kids won’t be better off than they were.  They may not follow the constant back-and-forth in Washington or all the policy details, but they experience in a very personal way the relentless, decades-long trend that I want to spend some time talking about today.  And that is a dangerous and growing inequality and lack of upward mobility that has jeopardized middle-class America’s basic bargain — that if you work hard, you have a chance to get ahead.

I believe this is the defining challenge of our time:  Making sure our economy works for every working American.  It’s why I ran for President.  It was at the center of last year’s campaign.  It drives everything I do in this office.  And I know I’ve raised this issue before, and some will ask why I raise the issue again right now.  I do it because the outcomes of the debates we’re having right now — whether it’s health care, or the budget, or reforming our housing and financial systems — all these things will have real, practical implications for every American.  And I am convinced that the decisions we make on these issues over the next few years will determine whether or not our children will grow up in an America where opportunity is real.

Now, the premise that we’re all created equal is the opening line in the American story.  And while we don’t promise equal outcomes, we have strived to deliver equal opportunity — the idea that success doesn’t depend on being born into wealth or privilege, it depends on effort and merit.  And with every chapter we’ve added to that story, we’ve worked hard to put those words into practice.  

It was Abraham Lincoln, a self-described “poor man’s son,” who started a system of land grant colleges all over this country so that any poor man’s son could go learn something new. 

When farms gave way to factories, a rich man’s son named Teddy Roosevelt fought for an eight-hour workday, protections for workers, and busted monopolies that kept prices high and wages low. 

When millions lived in poverty, FDR fought for Social Security, and insurance for the unemployed, and a minimum wage. 

When millions died without health insurance, LBJ fought for Medicare and Medicaid. 

Together, we forged a New Deal, declared a War on Poverty in a great society.  We built a ladder of opportunity to climb, and stretched out a safety net beneath so that if we fell, it wouldn’t be too far, and we could bounce back.  And as a result, America built the largest middle class the world has ever known.  And for the three decades after World War II, it was the engine of our prosperity. 

Now, we can’t look at the past through rose-colored glasses.  The economy didn’t always work for everyone.  Racial discrimination locked millions out of poverty — or out of opportunity.  Women were too often confined to a handful of often poorly paid professions.  And it was only through painstaking struggle that more women, and minorities, and Americans with disabilities began to win the right to more fairly and fully participate in the economy. 

Nevertheless, during the post-World War II years, the economic ground felt stable and secure for most Americans, and the future looked brighter than the past.  And for some, that meant following in your old man’s footsteps at the local plant, and you knew that a blue-collar job would let you buy a home, and a car, maybe a vacation once in a while, health care, a reliable pension.  For others, it meant going to college — in some cases, maybe the first in your family to go to college.  And it meant graduating without taking on loads of debt, and being able to count on advancement through a vibrant job market. 

Now, it’s true that those at the top, even in those years, claimed a much larger share of income than the rest:  The top 10 percent consistently took home about one-third of our national income.  But that kind of inequality took place in a dynamic market economy where everyone’s wages and incomes were growing.  And because of upward mobility, the guy on the factory floor could picture his kid running the company some day.

But starting in the late ‘70s, this social compact began to unravel.  Technology made it easier for companies to do more with less, eliminating certain job occupations.  A more competitive world lets companies ship jobs anywhere.  And as good manufacturing jobs automated or headed offshore, workers lost their leverage, jobs paid less and offered fewer benefits. 

As values of community broke down, and competitive pressure increased, businesses lobbied Washington to weaken unions and the value of the minimum wage.  As a trickle-down ideology became more prominent, taxes were slashed for the wealthiest, while investments in things that make us all richer, like schools and infrastructure, were allowed to wither.  And for a certain period of time, we could ignore this weakening economic foundation, in part because more families were relying on two earners as women entered the workforce.  We took on more debt financed by a juiced-up housing market.  But when the music stopped, and the crisis hit, millions of families were stripped of whatever cushion they had left.

And the result is an economy that’s become profoundly unequal, and families that are more insecure.  I’ll just give you a few statistics.  Since 1979, when I graduated from high school, our productivity is up by more than 90 percent, but the income of the typical family has increased by less than eight percent.  Since 1979, our economy has more than doubled in size, but most of that growth has flowed to a fortunate few. 

The top 10 percent no longer takes in one-third of our income — it now takes half.  Whereas in the past, the average CEO made about 20 to 30 times the income of the average worker, today’s CEO now makes 273 times more.  And meanwhile, a family in the top 1 percent has a net worth 288 times higher than the typical family, which is a record for this country.

So the basic bargain at the heart of our economy has frayed.  In fact, this trend towards growing inequality is not unique to America’s market economy.  Across the developed world, inequality has increased.  Some of you may have seen just last week, the Pope himself spoke about this at eloquent length.  “How can it be,” he wrote, “that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points?”

But this increasing inequality is most pronounced in our country, and it challenges the very essence of who we are as a people.  Understand we’ve never begrudged success in America.  We aspire to it.  We admire folks who start new businesses, create jobs, and invent the products that enrich our lives.  And we expect them to be rewarded handsomely for it.  In fact, we’ve often accepted more income inequality than many other nations for one big reason — because we were convinced that America is a place where even if you’re born with nothing, with a little hard work you can improve your own situation over time and build something better to leave your kids.  As Lincoln once said, “While we do not propose any war upon capital, we do wish to allow the humblest man an equal chance to get rich with everybody else.”

The problem is that alongside increased inequality, we’ve seen diminished levels of upward mobility in recent years.  A child born in the top 20 percent has about a 2-in-3 chance of staying at or near the top.  A child born into the bottom 20 percent has a less than 1-in-20 shot at making it to the top.  He’s 10 times likelier to stay where he is.  In fact, statistics show not only that our levels of income inequality rank near countries like Jamaica and Argentina, but that it is harder today for a child born here in America to improve her station in life than it is for children in most of our wealthy allies — countries like Canada or Germany or France.  They have greater mobility than we do, not less. 

The idea that so many children are born into poverty in the wealthiest nation on Earth is heartbreaking enough.  But the idea that a child may never be able to escape that poverty because she lacks a decent education or health care, or a community that views her future as their own, that should offend all of us and it should compel us to action.  We are a better country than this. 

So let me repeat:  The combined trends of increased inequality and decreasing mobility pose a fundamental threat to the American Dream, our way of life, and what we stand for around the globe.  And it is not simply a moral claim that I’m making here.  There are practical consequences to rising inequality and reduced mobility. 

For one thing, these trends are bad for our economy.  One study finds that growth is more fragile and recessions are more frequent in countries with greater inequality.  And that makes sense.  When families have less to spend, that means businesses have fewer customers, and households rack up greater mortgage and credit card debt; meanwhile, concentrated wealth at the top is less likely to result in the kind of broadly based consumer spending that drives our economy, and together with lax regulation, may contribute to risky speculative bubbles.

And rising inequality and declining mobility are also bad for our families and social cohesion — not just because we tend to trust our institutions less, but studies show we actually tend to trust each other less when there’s greater inequality.  And greater inequality is associated with less mobility between generations.  That means it’s not just temporary; the effects last.  It creates a vicious cycle.  For example, by the time she turns three years old, a child born into a low-income home hears 30 million fewer words than a child from a well-off family, which means by the time she starts school she’s already behind, and that deficit can compound itself over time.

And finally, rising inequality and declining mobility are bad for our democracy.  Ordinary folks can’t write massive campaign checks or hire high-priced lobbyists and lawyers to secure policies that tilt the playing field in their favor at everyone else’s expense.  And so people get the bad taste that the system is rigged, and that increases cynicism and polarization, and it decreases the political participation that is a requisite part of our system of self-government.

So this is an issue that we have to tackle head on.  And if, in fact, the majority of Americans agree that our number-one priority is to restore opportunity and broad-based growth for all Americans, the question is why has Washington consistently failed to act?  And I think a big reason is the myths that have developed around the issue of inequality.

First, there is the myth that this is a problem restricted to a small share of predominantly minority poor — that this isn’t a broad-based problem, this is a black problem or a Hispanic problem or a Native American problem.  Now, it’s true that the painful legacy of discrimination means that African Americans, Latinos, Native Americans are far more likely to suffer from a lack of opportunity — higher unemployment, higher poverty rates.  It’s also true that women still make 77 cents on the dollar compared to men.  So we’re going to need strong application of antidiscrimination laws.  We’re going to need immigration reform that grows the economy and takes people out of the shadows.  We’re going to need targeted initiatives to close those gaps.  (Applause.) 

But here’s an important point.  The decades-long shifts in the economy have hurt all groups:  poor and middle class; inner city and rural folks; men and women; and Americans of all races.  And as a consequence, some of the social patterns that contribute to declining mobility that were once attributed to the urban poor — that’s a particular problem for the inner city: single-parent households or drug abuse — it turns out now we’re seeing that pop up everywhere. 

A new study shows that disparities in education, mental health, obesity, absent fathers, isolation from church, isolation from community groups — these gaps are now as much about growing up rich or poor as they are about anything else.  The gap in test scores between poor kids and wealthy kids is now nearly twice what it is between white kids and black kids.  Kids with working-class parents are 10 times likelier than kids with middle- or upper-class parents to go through a time when their parents have no income.  So the fact is this:  The opportunity gap in America is now as much about class as it is about race, and that gap is growing.

So if we’re going to take on growing inequality and try to improve upward mobility for all people, we’ve got to move beyond the false notion that this is an issue exclusively of minority concern.  And we have to reject a politics that suggests any effort to address it in a meaningful way somehow pits the interests of a deserving middle class against those of an undeserving poor in search of handouts.  (Applause.)

Second, we need to dispel the myth that the goals of growing the economy and reducing inequality are necessarily in conflict, when they should actually work in concert.  We know from our history that our economy grows best from the middle out, when growth is more widely shared.  And we know that beyond a certain level of inequality, growth actually slows altogether.

Third, we need to set aside the belief that government cannot do anything about reducing inequality.  It’s true that government cannot prevent all the downsides of the technological change and global competition that are out there right now, and some of those forces are also some of the things that are helping us grow.  And it’s also true that some programs in the past, like welfare before it was reformed, were sometimes poorly designed, created disincentives to work.

But we’ve also seen how government action time and again can make an enormous difference in increasing opportunity and bolstering ladders into the middle class.  Investments in education, laws establishing collective bargaining, and a minimum wage — these all contributed to rising standards of living for massive numbers of Americans.  (Applause.)  Likewise, when previous generations declared that every citizen of this country deserved a basic measure of security — a floor through which they could not fall — we helped millions of Americans live in dignity, and gave millions more the confidence to aspire to something better, by taking a risk on a great idea. 

Without Social Security, nearly half of seniors would be living in poverty — half.  Today, fewer than 1 in 10 do.  Before Medicare, only half of all seniors had some form of health insurance.  Today, virtually all do.  And because we’ve strengthened that safety net, and expanded pro-work and pro-family tax credits like the Earned Income Tax Credit, a recent study found that the poverty rate has fallen by 40 percent since the 1960s.  And these endeavors didn’t just make us a better country; they reaffirmed that we are a great country. 

So we can make a difference on this.  In fact, that’s our generation’s task — to rebuild America’s economic and civic foundation to continue the expansion of opportunity for this generation and the next generation.  (Applause.)  And like Neera, I take this personally.  I’m only here because this country educated my grandfather on the GI Bill.  When my father left and my mom hit hard times trying to raise my sister and me while she was going to school, this country helped make sure we didn’t go hungry.  When Michelle, the daughter of a shift worker at a water plant and a secretary, wanted to go to college, just like me, this country helped us afford it until we could pay it back.

So what drives me as a grandson, a son, a father — as an American — is to make sure that every striving, hardworking, optimistic kid in America has the same incredible chance that this country gave me.  (Applause.)  It has been the driving force between everything we’ve done these past five years.  And over the course of the next year, and for the rest of my presidency, that’s where you should expect my administration to focus all our efforts.  (Applause.)

Now, you’ll be pleased to know this is not a State of the Union Address.  (Laughter.)  And many of the ideas that can make the biggest difference in expanding opportunity I’ve presented before.  But let me offer a few key principles, just a roadmap that I believe should guide us in both our legislative agenda and our administrative efforts.

To begin with, we have to continue to relentlessly push a growth agenda.  It may be true that in today’s economy, growth alone does not guarantee higher wages and incomes.  We’ve seen that.  But what’s also true is we can’t tackle inequality if the economic pie is shrinking or stagnant.  The fact is if you’re a progressive and you want to help the middle class and the working poor, you’ve still got to be concerned about competitiveness and productivity and business confidence that spurs private sector investment. 

And that’s why from day one we’ve worked to get the economy growing and help our businesses hire.  And thanks to their resilience and innovation, they’ve created nearly 8 million new jobs over the past 44 months.  And now we’ve got to grow the economy even faster.  And we’ve got to keep working to make America a magnet for good, middle-class jobs to replace the ones that we’ve lost in recent decades — jobs in manufacturing and energy and infrastructure and technology.

And that means simplifying our corporate tax code in a way that closes wasteful loopholes and ends incentives to ship jobs overseas.  (Applause.)  And by broadening the base, we can actually lower rates to encourage more companies to hire here and use some of the money we save to create good jobs rebuilding our roads and our bridges and our airports, and all the infrastructure our businesses need. 

It means a trade agenda that grows exports and works for the middle class.  It means streamlining regulations that are outdated or unnecessary or too costly.  And it means coming together around a responsible budget — one that grows our economy faster right now and shrinks our long-term deficits, one that unwinds the harmful sequester cuts that haven’t made a lot of sense — (applause) — and then frees up resources to invest in things like the scientific research that’s always unleashed new innovation and new industries. 

When it comes to our budget, we should not be stuck in a stale debate from two years ago or three years ago.  A relentlessly growing deficit of opportunity is a bigger threat to our future than our rapidly shrinking fiscal deficit.  (Applause.)  

So that’s step one towards restoring mobility:  making sure our economy is growing faster.  Step two is making sure we empower more Americans with the skills and education they need to compete in a highly competitive global economy. 

We know that education is the most important predictor of income today, so we launched a Race to the Top in our schools.  We’re supporting states that have raised standards for teaching and learning.  We’re pushing for redesigned high schools that graduate more kids with the technical training and apprenticeships, and in-demand, high-tech skills that can lead directly to a good job and a middle-class life.

We know it’s harder to find a job today without some higher education, so we’ve helped more students go to college with grants and loans that go farther than before.  We’ve made it more practical to repay those loans.  And today, more students are graduating from college than ever before.  We’re also pursuing an aggressive strategy to promote innovation that reins in tuition costs.  We’ve got lower costs so that young people are not burdened by enormous debt when they make the right decision to get higher education.  And next week, Michelle and I will bring together college presidents and non-profits to lead a campaign to help more low-income students attend and succeed in college.  (Applause.)

But while higher education may be the surest path to the middle class, it’s not the only one.  So we should offer our people the best technical education in the world.  That’s why we’ve worked to connect local businesses with community colleges, so that workers young and old can earn the new skills that earn them more money.

And I’ve also embraced an idea that I know all of you at the Center for American Progress have championed — and, by the way, Republican governors in a couple of states have championed — and that’s making high-quality preschool available to every child in America.  (Applause.)  We know that kids in these programs grow up likelier to get more education, earn higher wages, form more stable families of their own.  It starts a virtuous cycle, not a vicious one.  And we should invest in that.  We should give all of our children that chance.

And as we empower our young people for future success, the third part of this middle-class economics is empowering our workers.  It’s time to ensure our collective bargaining laws function as they’re supposed to — (applause) — so unions have a level playing field to organize for a better deal for workers and better wages for the middle class.  It’s time to pass the Paycheck Fairness Act so that women will have more tools to fight pay discrimination.  (Applause.)  It’s time to pass the Employment Non-Discrimination Act so workers can’t be fired for who they are or who they love.  (Applause.) 

And even though we’re bringing manufacturing jobs back to America, we’re creating more good-paying jobs in education and health care and business services; we know that we’re going to have a greater and greater portion of our people in the service sector.  And we know that there are airport workers, and fast-food workers, and nurse assistants, and retail salespeople who work their tails off and are still living at or barely above poverty.  (Applause.)  And that’s why it’s well past the time to raise a minimum wage that in real terms right now is below where it was when Harry Truman was in office.  (Applause.)

This shouldn’t be an ideological question.  It was Adam Smith, the father of free-market economics, who once said, “They who feed, clothe, and lodge the whole body of the people should have such a share of the produce of their own labor as to be themselves tolerably well fed, clothed, and lodged.”  And for those of you who don’t speak old-English — (laughter) — let me translate.  It means if you work hard, you should make a decent living.  (Applause.)  If you work hard, you should be able to support a family. 

Now, we all know the arguments that have been used against a higher minimum wage.  Some say it actually hurts low-wage workers — businesses will be less likely to hire them.  But there’s no solid evidence that a higher minimum wage costs jobs, and research shows it raises incomes for low-wage workers and boosts short-term economic growth.  (Applause.) 

Others argue that if we raise the minimum wage, companies will just pass those costs on to consumers.  But a growing chorus of businesses, small and large, argue differently.  And  already, there are extraordinary companies in America that provide decent wages, salaries, and benefits, and training for their workers, and deliver a great product to consumers. 

SAS in North Carolina offers childcare and sick leave.  REI, a company my Secretary of the Interior used to run, offers retirement plans and strives to cultivate a good work balance.  There are companies out there that do right by their workers.  They recognize that paying a decent wage actually helps their bottom line, reduces turnover.  It means workers have more money to spend, to save, maybe eventually start a business of their own. 

A broad majority of Americans agree we should raise the minimum wage.  That’s why, last month, voters in New Jersey decided to become the 20th state to raise theirs even higher.  That’s why, yesterday, the D.C. Council voted to do it, too.  I agree with those voters.  (Applause.)  I agree with those voters, and I’m going to keep pushing until we get a higher minimum wage for hard-working Americans across the entire country.  It will be good for our economy.  It will be good for our families.  (Applause.) 

Number four, as I alluded to earlier, we still need targeted programs for the communities and workers that have been hit hardest by economic change and the Great Recession.  These communities are no longer limited to the inner city.  They’re found in neighborhoods hammered by the housing crisis, manufacturing towns hit hard by years of plants packing up, landlocked rural areas where young folks oftentimes feel like they’ve got to leave just to find a job.  There are communities that just aren’t generating enough jobs anymore. 

So we’ve put forward new plans to help these communities and their residents, because we’ve watched cities like Pittsburgh or my hometown of Chicago revamp themselves.  And if we give more cities the tools to do it — not handouts, but a hand up — cities like Detroit can do it, too.  So in a few weeks, we’ll announce the first of these Promise Zones, urban and rural communities where we’re going to support local efforts focused on a national goal — and that is a child’s course in life should not be determined by the zip code he’s born in, but by the strength of his work ethic and the scope of his dreams.  (Applause.)

And we’re also going to have to do more for the long-term unemployed.  For people who have been out of work for more than six months, often through no fault of their own, life is a catch-22.  Companies won’t give their résumé an honest look because they’ve been laid off so long — but they’ve been laid off so long because companies won’t give their résumé an honest look.  (Laughter.)  And that’s why earlier this year, I challenged CEOs from some of America’s best companies to give these Americans a fair shot.  And next month, many of them will join us at the White House for an announcement about this.

Fifth, we’ve got to revamp retirement to protect Americans in their golden years, to make sure another housing collapse doesn’t steal the savings in their homes.  We’ve also got to strengthen our safety net for a new age, so it doesn’t just protect people who hit a run of bad luck from falling into poverty, but also propels them back out of poverty.

Today, nearly half of full-time workers and 80 percent of part-time workers don’t have a pension or retirement account at their job.  About half of all households don’t have any retirement savings.  So we’re going to have to do more to encourage private savings and shore up the promise of Social Security for future generations.  And remember, these are promises we make to one another.  We don’t do it to replace the free market, but we do it to reduce risk in our society by giving people the ability to take a chance and catch them if they fall.  One study shows that more than half of Americans will experience poverty at some point during their adult lives.  Think about that.  This is not an isolated situation.  More than half of Americans at some point in their lives will experience poverty. 

That’s why we have nutrition assistance or the program known as SNAP, because it makes a difference for a mother who’s working, but is just having a hard time putting food on the table for her kids.  That’s why we have unemployment insurance, because it makes a difference for a father who lost his job and is out there looking for a new one that he can keep a roof over his kids’ heads.  By the way, Christmastime is no time for Congress to tell more than 1 million of these Americans that they have lost their unemployment insurance, which is what will happen if Congress does not act before they leave on their holiday vacation.  (Applause.)

The point is these programs are not typically hammocks for people to just lie back and relax.  These programs are almost always temporary means for hardworking people to stay afloat while they try to find a new job or go into school to retrain themselves for the jobs that are out there, or sometimes just to cope with a bout of bad luck.  Progressives should be open to reforms that actually strengthen these programs and make them more responsive to a 21st century economy.  For example, we should be willing to look at fresh ideas to revamp unemployment and disability programs to encourage faster and higher rates of re-employment without cutting benefits.  We shouldn’t weaken fundamental protections built over generations, because given the constant churn in today’s economy and the disabilities that many of our friends and neighbors live with, they’re needed more than ever.  We should strengthen them and adapt them to new circumstances so they work even better.

But understand that these programs of social insurance benefit all of us, because we don’t know when we might have a run of bad luck.  (Applause.)  We don’t know when we might lose a job.  Of course, for decades, there was one yawning gap in the safety net that did more than anything else to expose working families to the insecurities of today’s economy — namely, our broken health care system.

That’s why we fought for the Affordable Care Act — (applause) — because 14,000 Americans lost their health insurance every single day, and even more died each year because they didn’t have health insurance at all.  We did it because millions of families who thought they had coverage were driven into bankruptcy by out-of-pocket costs that they didn’t realize would be there.  Tens of millions of our fellow citizens couldn’t get any coverage at all.  And Dr. King once said, “Of all the forms of inequality, injustice in health care is the most shocking and inhumane.” 

Well, not anymore.  (Applause.)  Because in the three years since we passed this law, the share of Americans with insurance is up, the growth of health care costs are down to their slowest rate in 50 years.  More people have insurance, and more have new benefits and protections — 100 million Americans who have gained the right for free preventive care like mammograms and contraception; the more than 7 million Americans who have saved an average of $1,200 on their prescription medicine; every American who won’t go broke when they get sick because their insurance can’t limit their care anymore.

More people without insurance have gained insurance — more than 3 million young Americans who have been able to stay on their parents’ plan, the more than half a million Americans and counting who are poised to get covered starting on January 1st, some for the very first time.

And it is these numbers — not the ones in any poll — that will ultimately determine the fate of this law.  (Applause.)  It’s the measurable outcomes in reduced bankruptcies and reduced hours that have been lost because somebody couldn’t make it to work, and healthier kids with better performance in schools, and young entrepreneurs who have the freedom to go out there and try a new idea — those are the things that will ultimately reduce a major source of inequality and help ensure more Americans get the start that they need to succeed in the future.

     I have acknowledged more than once that we didn’t roll out parts of this law as well as we should have.  But the law is already working in major ways that benefit millions of Americans right now, even as we’ve begun to slow the rise in health care costs, which is good for family budgets, good for federal and state budgets, and good for the budgets of businesses small and large.  So this law is going to work.  And for the sake of our economic security, it needs to work.  (Applause.) 

And as people in states as different as California and Kentucky sign up every single day for health insurance, signing up in droves, they’re proving they want that economic security.  If the Senate Republican leader still thinks he is going to be able to repeal this someday, he might want to check with the more than 60,000 people in his home state who are already set to finally have coverage that frees them from the fear of financial ruin, and lets them afford to take their kids to see a doctor.  (Applause.) 

So let me end by addressing the elephant in the room here, which is the seeming inability to get anything done in Washington these days.  I realize we are not going to resolve all of our political debates over the best ways to reduce inequality and increase upward mobility this year, or next year, or in the next five years.  But it is important that we have a serious debate about these issues.  For the longer that current trends are allowed to continue, the more it will feed the cynicism and fear that many Americans are feeling right now — that they’ll never be able to repay the debt they took on to go to college, they’ll never be able to save enough to retire, they’ll never see their own children land a good job that supports a family.

And that’s why, even as I will keep on offering my own ideas for expanding opportunity, I’ll also keep challenging and welcoming those who oppose my ideas to offer their own.  If Republicans have concrete plans that will actually reduce inequality, build the middle class, provide more ladders of opportunity to the poor, let’s hear them.  I want to know what they are.  If you don’t think we should raise the minimum wage, let’s hear your idea to increase people’s earnings.  If you don’t think every child should have access to preschool, tell us what you’d do differently to give them a better shot. 

If you still don’t like Obamacare — and I know you don’t — (laughter) — even though it’s built on market-based ideas of choice and competition in the private sector, then you should explain how, exactly, you’d cut costs, and cover more people, and make insurance more secure.  You owe it to the American people to tell us what you are for, not just what you’re against.  (Applause.)  That way we can have a vigorous and meaningful debate.  That’s what the American people deserve.  That’s what the times demand.  It’s not enough anymore to just say we should just get our government out of the way and let the unfettered market take care of it — for our experience tells us that’s just not true.  (Applause.)

Look, I’ve never believed that government can solve every problem or should — and neither do you.  We know that ultimately our strength is grounded in our people — individuals out there, striving, working, making things happen.  It depends on community, a rich and generous sense of community — that’s at the core of what happens at THEARC here every day.  You understand that turning back rising inequality and expanding opportunity requires parents taking responsibility for their kids, kids taking responsibility to work hard.  It requires religious leaders who mobilize their congregations to rebuild neighborhoods block by block, requires civic organizations that can help train the unemployed, link them with businesses for the jobs of the future.  It requires companies and CEOs to set an example by providing decent wages, and salaries, and benefits for their workers, and a shot for somebody who is down on his or her luck.  We know that’s our strength — our people, our communities, our businesses.

But government can’t stand on the sidelines in our efforts.  Because government is us.  It can and should reflect our deepest values and commitments.  And if we refocus our energies on building an economy that grows for everybody, and gives every child in this country a fair chance at success, then I remain confident that the future still looks brighter than the past, and that the best days for this country we love are still ahead.  (Applause.)

Progressive groups to rally against corporate ‘takeover’ of Milwaukee schools

A rally to “oppose the takeover of MPS by private companies” will take place today (Sept. 17) at about 4:15 p.m. CST.

The rally is being organized by the Coalition to Oppose the MPS Takeover, a group of local organizations including the Milwaukee Teachers Education Association, Voces de la Frontera, Milwaukee NAACP and others.

The event will take place at the Milwaukee Metropolitan Association of Commerce office, 756 N. Milwaukee Ave., Milwaukee. 

A news release announcing the rally said, “The MMAC is an organization of businessmen that wants private companies to take over a large segment of the Milwaukee Public School system. The MMAC wants to pass a state law that would remove dozens of schools from MPS and put them in the hands of private companies. The plan would remove the lowest performing schools in the Milwaukee Public School system from the authority of the democratically elected MPS school board and place them under the control of an appointed individual or board.”

The coalition maintains in the announcement that:

• Twenty years of experience and data prove that giving our public schools to private companies will not produce better outcomes for children. 

• The business people at the MMAC have never asked parents whether they want their schools handed over to privately run companies. They have also not explained to parents at the remaining MPS schools how this plan will financially cripple the district and threaten the existence of all MPS schools, including high-performing MPS schools.

• When public schools are handed over to privately run companies, they do not serve all students. They don’t offer bilingual education, and often “counsel out” students with special needs and/or behavior problems. The mission and purpose of public schools, on the other hand, is to serve and welcome all children.

• Privately run schools are not accountable to parent governance councils or our democratically elected school board. Voter rights and educational accountability are eroded when parents and elected officials have no say over our schools.

Study: Gulf between richest 1 percent and rest of America widest since Roaring ’20s

The gulf between the richest 1 percent and the rest of America is the widest it’s been since the Roaring ’20s.

The very wealthiest Americans earned more than 19 percent of the country’s household income last year – their biggest share since 1928, the year before the stock market crash. And the top 10 percent captured a record 48.2 percent of total earnings last year.

U.S. income inequality has been growing for almost three decades. And it grew again last year, according to an analysis of Internal Revenue Service figures dating to 1913 by economists at the University of California, Berkeley, the Paris School of Economics and Oxford University.

One of them, Berkeley’s Emmanuel Saez, said the incomes of the richest Americans surged last year in part because they cashed in stock holdings to avoid higher capital gains taxes that took effect in January.

In 2012, the incomes of the top 1 percent rose nearly 20 percent compared with a 1 percent increase for the remaining 99 percent.

The richest Americans were hit hard by the financial crisis. Their incomes fell more than 36 percent in the Great Recession of 2007-09 as stock prices plummeted. Incomes for the bottom 99 percent fell just 11.6 percent, according to the analysis.

But since the recession officially ended in June 2009, the top 1 percent have enjoyed the benefits of rising corporate profits and stock prices: 95 percent of the income gains reported since 2009 have gone to the top 1 percent.

That compares with a 45 percent share for the top 1 percent in the economic expansion of the 1990s and a 65 percent share from the expansion that followed the 2001 recession.

The top 1 percent of American households had pretax income above $394,000 last year. The top 10 percent had income exceeding $114,000.

The income figures include wages, pension payments, dividends and capital gains from the sale of stocks and other assets. They do not include so-called transfer payments from government programs such as unemployment benefits and Social Security.

The gap between rich and poor narrowed after World War II as unions negotiated better pay and benefits and as the government enacted a minimum wage and other policies to help the poor and middle class.

The top 1 percent’s share of income bottomed out at 7.7 percent in 1973 and has risen steadily since the early 1980s, according to the analysis.

Economists point to several reasons for widening income inequality. In some industries, U.S. workers now compete with low-wage labor in China and other developing countries. Clerical and call-center jobs have been outsourced to countries such as India and the Philippines.

Increasingly, technology is replacing workers in performing routine tasks. And union power has dwindled. The percentage of American workers represented by unions has dropped from 23.3 percent in 1983 to 12.5 percent last year, according to the Labor Department.

The changes have reduced costs for many employers. That is one reason corporate profits hit a record this year as a share of U.S. economic output, even though economic growth is sluggish and unemployment remains at a high 7.2 percent.

America’s top earners tend to be highly paid executives or entrepreneurs – the “working rich” – instead of elites who enjoy lives of leisure on inherited wealth, Saez wrote in a report that accompanied the new analysis.

Still, he added: “We need to decide as a society whether this increase in income inequality is efficient and acceptable.”