LEHMAN TWP. — America’s wage gap continues to widen, making it harder for families to obtain the American Dream, according to Chuck Collins, an economic inequality expert with the Institute for Policy Studies.
Collins provided insight to economic inequalities that exist in the U.S. economy and what could happen if the current financial trends do not change, as well as advice on repairing the system at a lecture to nearly 75 students and faculty members Dec. 4 at Penn State Wilkes-Barre in Lehman Township.
The lecture, sponsored by the Northeastern Pennsylvania Diversity Education Consortium and Penn State Wilkes-Barre, was held in the Science Building on the university’s campus.
“It is a un-American thing to say, but the American Dream moved to Canada,” he said.
The American Dream, which is a simple goal to go to school, get a good job and buy a home is getting tougher for many low and middle-income families to achieve, Collins said.
America’s current economic system is allowing financial gains to be acquired by the top earners, while the low and middle-class households are being pinched by rising costs of living and taxes, he said.
However, Canada’s economy taxes the top earners and reinvests those funds in infrastructure, education, health insurance and public services, which help with class mobility, Collins said.
This economic structure makes it possible for people to move financially forward without getting stuck or moving backward, he said.
Collins’ research shows “real wages, which grew throughout World War II, are flattening out and falling.”
“We are living through what I call, the ‘Judist Economy,’ he said. “It is the triumph of capital and the betrayal of work meaning that the rules of the economy now are tilted to benefit those who own wealth and assets at the expense of those who work for wages.”
Collins also clarified a mainstream belief of wealth flowing to the top earners.
“Most of the income and wealth growth has gone not to the top one percent but to the top one-tenth of one percent,” he said. “Eighty-five percent of income and wealth gains have gone to those at the very tippy top.”
Collins said the wealthiest 400 billionaires, the Forbes 400, has as much wealth as 64 percent of the U.S. population, combined.
The three richest billionaires, Warren Buffett, chief executive officer of Berkshire Hathaway; Jeff Bezos, chief executive officer of Amazon; and Bill Gates, founder of Microsoft Corporation, combined, have as much wealth as the bottom half of the U.S. households combined, Collins said.
“This is because many households have negative wealth or owe more than they own,” he said.
The pending Senate tax bill, if approved in its current form, will only increase the wage gap, Collins said.
“We will become a society with a hereditary aristocracy of wealth and power where the sons and daughters of today’s billionaires will dominate our politics, culture, philanthropy and economy,” he said.
Collins said a formula does exist that can build a shared economy.
After World War II, an economic plan was successfully implemented that created financial growth in America’s middle-class households, Collins said.
Under President Dwight Eisenhower, the “wealthiest one percent paid three times higher income tax, twice as much on wealth and inheritance tax and it was invested in public goods such as the interstate highway system, infrastructure, homeownership and debt-free higher education,” Collins said.
The program worked.
Collins said society, at the time, moved from a primary tenant society to homeowners over those two decades.
“We wired the rules of the economy to create shared prosperity and expand the middle class,” he said.