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The Great Recession, Wealth Inequality, and Poverty in America

America is still recovering from the effects of the great recession, which hit at the end of 2007. Although the stock market, labor market, and corporate earnings have each made a full recovery, (Atlantic), the country as a whole is poorer and more unequal than when the recession began. Jobs have bounced back and wages have risen, but here we are a decade later and the rich are richer and the poor are poorer.

The US economy began to recover from the recession in June of 2009, and recovery has occurred unevenly from that time on. According to Census Bureau data, the richest 7% of households saw their income increase by 28% during the first two years of economic recovery, while the other 93% of Americans saw their income decrease by 4% (Pew). One of the main reasons for this disparity is that wealthier households have money to invest, and poor households only have enough to scrape by on, so there is nothing left over to invest after needs are met. As the market bounced back, investments began to once again pay off for the wealthy, but everyone else was still struggling to make it out of the recession pit. This led to a major increase in the wealth inequality in America. The mean wealth of an affluent household in 2011 was almost 24 times the mean wealth of less affluent households, up from 18 times more in 2009 (Pew).

The income inequality gap in America has been steadily rising over the past 30 years, but the recession exponentially exacerbated it. Since 1967, household income inequality has risen by 20% (Population Reference Bureau). The richest 1% take home almost a quarter (24%) of the nation’s annual income currently, whereas in 1976 they took home only 9%. Their share of income has nearly tripled since then.

CBO-family-wealth-3rd-try-e1477339515177

The average (not even the lowest paid) worker needs to work for an entire month to earn what a top paid CEO earns in an hour (Wealth Inequality in America). In 2015, 90% of Americans made an average of $34,074 per year, while the top 1% made an average of $1.4 million (Inequality.org). The country’s wealthiest 10% earn nine times more than the bottom 90%, and the wealthiest 1% earn 40 times more than the bottom 90%. The bottom 90% of families made less than half of America’s annual income in 2016, and controlled only 22.8% of the country’s wealth, as compared to about 33% in 1989; in 2016 the wealthiest 1% controlled 38.6% of the country’s entire wealth (CNN).

wealth inequality

Overall, by 2011 the American economy had rebounded from the recession to its previous state in 2005, before the crash. However, the vast majority of households experienced a decline in net worth during this time. Mean net worth declined by 12% for households as a whole, while mean net worth increased for the wealthiest households by 18% (Pew). This means that all increases in wealth went to the wealthiest 7%. Wealthier households were able to increase their net worth while everyone else experienced losses, because they owned assets that rose in value, such as real estate, stocks, bonds, and mutual funds, and other types of financial accounts that accrue interest (Pew). Because the recession is tied so inextricably to the housing market, simply owning a home did not keep a household solvent, because the mean equity in a house fell 16% from 2009 to 2011 (Pew)

With the advent of the recession, many households were plunged into poverty, and many of them remain there. Poverty rates and wealth inequality have both increased in recent years, and in many regions they have increased in tandem with one another. In 2015, which is the last year for which complete data is available, the poverty threshold was an income of $24,257 for a family of four, and the official national poverty rate was 13.5%, or 43.1 million people living in poverty (Institute for Research on Poverty).

Poverty in the world is measured in one of two ways: absolute poverty, and relative poverty. Absolute poverty is defined as ‘acute deprivation,’ a condition characterized by ‘severe deprivation of basic human needs, including food, water, shelter, and health and education services’ (Economic and Social Research Council). This is a type of poverty not seen in the developed world outside of emergency situations, so a better definition for modern systemic American poverty is that of overall poverty, in which a person is deprived of ‘income and productive resources to ensure a sustainable livelihood,’ which can lead to ‘hunger and malnutrition, ill health, limited or lack of access to education and other basic services, inadequate housing, unsafe environment, and social discrimination and exclusion’ (Economic and Social Research Council).

In the United States, the federal government measures relative poverty, and tends to leave the burden of concern for overall poverty to specialized assistance programs. Since 1963, the census bureau has determined the poverty threshold each year using the same measure, which is updated annually to account for inflation. This measure does not take into account the actual day-to-day depth of economic need, does not vary by geographic region across the US, and has not been adjusted for changes in the standard of living over time.

The US recession impacted basically everyone in the country, but young adults and their families were disproportionately affected. Poverty rates for children and working adults are currently reaching all time highs, with 16.4% of children under age 18 in poverty, and 15.4% of adults ages 18 to 64 (Population Reference Bureau).

The recession hit ethnic minorities especially hard, increasing the wealth gap between white and asian households versus black and latino households. In 2011 the net worth for a white family was nearly 18 times higher than the net worth  for a black family (Population Reference Bureau).

Households led by single mothers are also disproportionately likely to be impoverished. Women make up about 46% of the full time workforce, but earn only about 74% of men’s earnings in the same jobs (Population Reference Bureau). In addition, the likelihood of a woman living her life in poverty increases more than five-fold if she has children and is unmarried – more than half of young single women with children are poor. This is despite the fact that ¾ of all single mothers are in the workforce (Population Reference Bureau). During the years following the recession, between 2007 and 2012, the percentage of low income female headed working families increased from 54 to 58% (Population Reference Bureau).

One of the greatest factors in determining income inequality in America is education. As the US economy has automated or moved high paying manufacturing jobs offshore, the work opportunities for laborers with lower levels of education have consistently shrunk. More than six out of every ten jobs in America requires some form of higher education and training (Population Reference Bureau). College graduates currently have lifetime earnings that are nearly double what those without higher education can expect to make, and they are much less likely to be unemployed for any significant amount of time.

us-inequality-fig9

Lower income families often struggle to obtain college education for their children, which continues the cycle of poverty across generations. It is also difficult for lower income families to keep their college students in school – a recent study showed that the college completion rate for students entering community college is only 18%, compared with 90% for students enrolling in private colleges and universities (Population Reference Bureau).

In access to education, ethnic minorities again experience the greatest disadvantage. In 2012, blacks and latinos aged 25-29 each made up only 9% of the population with bachelor’s degrees (18% combined). This is in contrast to 69% of whites between the ages of 25-29 with bachelor’s degrees, and 11% of asians (Pew). These disparities are especially significant at the higher education level, but they are by no means restricted to this arena. Considerable evidence exists that disparities in academic opportunity and achievement for minorities begin in elementary school and continue through high school. Not even taking the time to look at the stark differences in academic achievement, the high school dropout rates per demographic tell enough of a story: 4.6% of white kids dropped out of high school in 2015, compared to 6.5% for black kids and 9.2% for latino kids (National Center for Education Statistics).

The families that have been most negatively impacted by the losses incurred during the recession are also at the greatest risk for continuing to be kept in poverty due to decreased opportunity for obtaining higher education.

Another significant reason for the income and wealth inequality gaps in America is the nation’s tax system, which is not effectively redistributing wealth. This disparity occurs at the federal and state levels. In the eleven states with the most regressive plans, the wealthiest 1% are paying between 7 to 17% less of their income in state and local taxes than the poorest 20% of taxpayers (Inequality.org).

At the federal level, many changes have happened within the tax code between 1979 and 2007 that have made the system less progressive; according to one measure, it was ⅓ less effective at reducing income inequality in 2007 than it was in 1979 (American Progress). According to a report done by the University of Southern California, the effective marginal federal income tax rate, after accounting for the assistance offered by deductions like the EITC, is actually steepest for families earning incomes that are near the nation’s lowest (USC).

Making things more complicated, taxes on wealth that is not income, such as capital gains and dividends from things like stocks and mutual funds, have experienced dramatic rate cuts in the past thirty years. The average tax rate for these gains for the country’s richest 400 tax filers fell from over 26% in 1992 to under 20% in 2009 (USC). When contrasting this information with the earlier data included that demonstrates how the nation’s wealthy were able to increase their net worth after the recession due to gains on investment, it is easy to see that income inequality is not the only disparity that is creating the overall picture of wealth inequality in the US. There is a large disparity between low earners and top earners, but total wealth inequality paints the severest picture.

The final piece of the tax inequality puzzle concerns not individual taxes, but company taxes. According to the Economic Policy Institute, US tax code has increasingly shifted its focus from corporate taxes to individual taxes, creating a wide gap between the wealthiest and poorest American earners. In the 1950s, the corporate income tax contributed a quarter of all national taxes collected; by the 2000s, this contribution had fallen to just 10% (EPI). This decrease in corporate taxes was made possible by simultaneous increases to personal payroll taxes and federal income taxes, shifting the burden of contribution from company profits to individual earnings.

Poverty and wealth inequality are serious issues in modern America, and their shadow is growing longer every day. Continuing at the status quo will have not only immediate day-to-day impacts on our low income families, it will create total economic instability in the future. High levels of wealth inequality are indicative of an unstable economy, with more ‘boom and bust cycles, deeper recessions, and a slowdown in overall economic growth’ (Population Reference Bureau). The nation may have bounced back from the recession, but America’s people have not. In order to help them truly achieve economic stability, and to ensure the stability of our collective economy, we must address the issue of wealth inequality and the practices that allow it to flourish.

Citations

Lowry, A. 2017. The Great Recession Is Still With Us [Internet]. The Atlantic. Available from

https://www.theatlantic.com/business/archive/2017/12/great-recession-still-with-us/547268/

Mather, M, Jarosz, B. 2014. The Demography of Inequality in the United States [Internet]. Population Reference Bureau. Available from

http://www.prb.org/Publications/Reports/2014/us-inequality-introduction.aspx

Egan, M. 2017. Record Inequality: The top 1% controls 38.6% of America’s wealth [Internet]. CNN. Available from

http://money.cnn.com/2017/09/27/news/economy/inequality-record-top-1-percent-wealth/index.html

  1. Income Inequality in the United States [Internet]. Inequality.org. Available from

https://inequality.org/facts/income-inequality/

  1. A Progressive Federal Tax Credit for State Tax Payments [Internet]. Inequality.org. Available from

https://inequality.org/research/a-progressive-federal-tax-credit-for-state-tax-payments/

Linden, M. 2012. The Federal Tax Code and Income Inequality [Internet]. Center for American Progress. Available from

https://www.americanprogress.org/issues/economy/reports/2012/04/19/11404/the-federal-tax-code-and-income-inequality/

Gordin, C. 2014. Growing Apart: A political history of American inequality [Internet]. University of Southern California. Available from

http://scalar.usc.edu/works/growing-apart-a-political-history-of-american-inequality/who-pays-taxes-and-american-inequality

Irons, J. 2008. Corporate tax declines and US inequality [Internet]. Economic Policy Institute. Available from

http://www.epi.org/publication/webfeatures_snapshots_20080409/

Krogstad, J, Fry, R. 2014. More hispanics, blacks enrolling in college, but lag in bachelor’s degrees [Internet]. Pew Research Center. Available from

http://www.pewresearch.org/fact-tank/2014/04/24/more-hispanics-blacks-enrolling-in-college-but-lag-in-bachelors-degrees/

  1. Dropout rates [Internet]. National Center for Education Statistics. Available from

https://nces.ed.gov/fastfacts/display.asp?id=16

Mack, J. 2016. Absolute and overall poverty [Internet]. Poverty and Social Exclusion, Economic and Social Research Council. Available from

http://www.poverty.ac.uk/definitions-poverty/absolute-and-overall-poverty

Scommegna, P. 2014. Single Working Mothers in US Worse Off Since the Recession. Population Reference Bureau. Available from

http://www.prb.org/Publications/Articles/2014/single-working-mothers.aspx

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like everyone was havin fun

December 5, 2017

Today when dropping Momo off at doggie daycare (the cat had a glorious afternoon) I was suckered by a festive display and the creeping guilt that pervades when something makes you aware of a potential lack in your dog’s life.

I bought a tin of winterizing balm to rub on the dog’s paws to prevent cracks.

They each sweetly let me apply it, although they displayed much confusion over the entire process. What is this crazy woman doing now, I am sure they were thinking.

Now they are walking around like they have slippers on and it is cracking me up. Not cracking up, however, will be their little winter paws. And my own fingertips are delightfully silky.

I’m not comin down

December 3, 2017

November

bookles

the great pumpkin

poirot in portland

green and yellow

detritus

cold

shrooms

bonehead

momo

luv

who am I to disagree

November 27, 2017

I midway wake up a couple times a night, and ruminate drowsily on the most recent of my dreams.

Last night I halfway woke up trying to remember the name of a real world acquaintance: Felicia…Christina…Clabberstein…

I’m sorry, what, my brain enquired of itself, now fully awake. Did you say Clabberstein? A word that has probably never in human history existed as a surname, and you’re offering it as a possible first name for this lovely twenty first century woman?

My brain does not know where it gets this stuff from.

what turns on your lights

November 26, 2017

One of my favorite parts of being in school is being allowed the time and resources (UNLIMITED FREE PEER REVIEWED JOURNALS OH JOYYYY) to research and write about topics that I find interesting. This is one of my pre-final final papers this term. Because you know, why assign just one final paper when you can assign two?

Transgender: Born That Way?

My opinion on this topic is that a transgender human is born that way, with genetic coding that predetermines their gender identity just as it determines their biological sex. Recent science has shown that there are some measurable differences between the brains of heterosexual males, heterosexual females, homosexual males, and homosexual females. There is unfortunately not a lot out there right now about the bisexual brain, but I’m sure that when we have that information it will be extremely valuable. In any case, there is substantial scientific evidence that hormones released to the fetus during pregnancy cause the brain to differentiate slightly. This differentiation occurs late in the pregnancy, as brain development is a very complex part of fetal development. After this distinction occurs, the brain has characteristics that tend more toward the male or the female. My worldview is very science based, which is what dictates my opinion on this topic. Because I place a high value on scientific discovery and consensus, I believe that the genetic foundation for the sex of a brain plays a key role in a human’s place in the world. While gender is a social construct, biological sex and the specializations of a male or female brain are genetically predetermined. I also believe that our brains more than any other component of our bodies or even all the rest combined control who we are. Therefore I think that the type of brain you have impacts the type of person you are more than the type of genitalia and other body features that you have.

Study: Sexual differentiation of the human brain: Relation to gender identity, sexual orientation and neuropsychiatric disorders

Dick Swaab is an MD and PhD, and is the group leader of the Netherlands Institute for Neuroscience. Alicia Garcia-Falgueras is a doctor of neuroscience and is a professor at the Netherlands Institute for Neuroscience. Ai-Min Bao is an MD and PhD, and a visiting professor at the Netherlands Institute for Neuroscience. They are leading experts in their field.

I am unaware of any biases the authors present, although there is language in the study expressing distaste for the ‘unethical’ methods of attempting to correct transgenderism in children, for example in the cited case of David Reimer.

This study draws information from research done on the effects of androgen on the brains of developing rats. It has not been confirmed that the results are the same in the developing human brain. It does cite relevant known information on human development, however: ‘the main mechanism appears to involve a direct effect of testosterone on the developing brain.’ The study also looked at sex differences between male and female human brains, and found that were significant measurable differences at the ‘macroscopic level down to the ultramicroscopic level,’ and that a ‘large number of sex differences in different brain regions have been described’ at the functional level. These differences are structural, cellular, hormonal, and chemical.

This study presents the fact that the sexual organs develop between weeks 6 and 12 of pregnancy, and the differentiation is caused by either the presence or absence of androgens. ‘The brain structure differences that result from the interaction between hormones and developing brain cells are thought to be the basis of sex differences in a wide spectrum of behaviors, such as gender role, gender identity, sexual orientation, and sex differences regarding cognition, aggressive behavior, and language organization.’ Because the differentiation of the sex organs occurs in the first two months of pregnancy and the differentiation of the brain occurs much later, in the second half of pregnancy, ‘these two processes may be influenced independently of each other.’ This offers a biologically based explanation for transgenderism: the sex organs develop first, and much later the sex differentiation of the brain occurs. If the hormonal/chemical influences on the fetus have been affected differently, the brain may not develop the same sex as the sex organs.

Study: Sex chromosome genes directly affect brain sexual differentiation

Laura Carruth has a PhD in behavioral neuroendrocrinology, and is an associate professor at Georgia State University. Arthur P Arnold is a PhD in Genetics and Genomics, and is a professor of integrative biology and physiology at UCLA. Ingrid Reisert is affiliated with the department of Anatomy and Cell Biology at the University of Ulm, Albert-Einstein Allee in Germany.

I am unaware of any biases that may have influenced or been expressed in this study.

This study was conducted using mice with an unusual y chromosome, and the experiment tested whether sex chromosomes had an effect on brain neurons. The experiment was replicated on multiple embryos two different times. It found that ‘sex differences in the brain are caused by differences in gonadal secretions; higher levels of testosterone during fetal and neonatal life can cause the male brain to develop differently than the female brain.’ This experiment found that sex differentiation in the brain is directly related to the presence or absence of sex chromosomes during fetal development.

Before I began researching this topic for my paper, I did not know if there was any scientific evidence out there that transgenderism might have roots in biology or genetics. The debate has always fascinated me, though. With such intense rejection of transgenderism in almost all periods of time and geographic locations, it was extremely difficult for me to understand why anyone would make the series of choices necessary to adopt that identity and lifestyle. This has always led me to suspect that there must be biological reasons for it, and not just environmental reasons. The environmental factors that would deter an individual from identifying as transgender must be stronger than any that would influence them to identify as transgender. Nor did the idea that it was a social deviation suffice. Again, I have always thought that there is just too much rejection, hostility, and violence directed at transgender people to make it a worthwhile endeavor. The idea that it was caused by a biological deviation was much more compelling. Although there is still no conclusive proof that a timing difference in the differentiation of sex organs and the sex differentiation of the brain during fetal development is the cause of transgenderism, there is a substantial amount of evidence that it is quite likely. I was very interested to learn that human sex is decided in the womb by the presence or absence of androgen hormones, and that this is also responsible for the sex differentiation in the brain as it develops. I was also rather surprised to learn that there are definite measurable differences between the male and female human brain. I guess it makes sense, though! Our sex hormones are so different, and although we each have some of both, the amounts that a person has makes all the difference.

The scientific studies that I chose to represent the argument that transgenderism is caused by very specific neuroendocrinological processes that occur during fetal development are both meticulously researched, carefully cited, and produced by credible individuals and organizations. Their current weakness as I see it is that the research has not actually been done on humans, and the evidence from each of them is based on experiments conducted with rats. However I do not believe this is a time to split hairs on this subject, since scientific studies using rats are on the forefront of neuroscientific inquiry, and we accept these findings in many other cases. In addition, humans and rats are very similar in biological makeup. We are both warm blooded mammals that give birth to living young, and we have similar physiological makeup, organs, and neurological systems.

Overall, I think it is clear that while scientific consensus has yet to speak definitely in one way or the other, there is significant support for the hypothesis that transgenderism has its roots in genetics. There is a growing amount of data that suggests that transgender people are, in fact, born that way.

Citations

Swaab, D, Bao, A, Garcia-Falguera, A. (2010). Sexual differentiation of the human brain: Relation to gender identity, sexual orientation and neuropsychiatric disorders. Frontiers in Neuroendocrinolgoy. April 2011, vol. 32 Issue 2. DOI: 10.1016/j.yfrne.2011.02.007

Carruth, L, Reisert, I, Arnold, A. (2002). Sex chromosome genes directly affect brain sexual differentiation. Nature Neuroscience. October 2002, vol. 5 Issue 10. DOI:10.1038/nn922

 

all the games you play

November 20, 2017

I recently rediscovered the words with friends app, and incidentally the fact that I am a huge baby when anyone plays a word that I suspect exists solely for use in scrabble games.

I was on the point of refusing to play the word ‘qi’ because it smacks of desperation (and is worth so many points it kind of feels like cheating) but then I remembered this, which I have consistently depended upon throughout my life to check my instinct to do myself and nobody else any favors by clambering onto horses of superior elevation:

alone in my principles

but rock lives on

November 19, 2017

Today I spent like five hours making crayons, from motherfucking scratch, and beeswax. Also multiple other waxes, and natural pigments.

They’re for the gift bags we’ll be donating to Doernbecher children’s hospital this Christmas. There were many air bubbles. There were many pigment mistakes. There were many crack and crumbles. I had to remelt and re-tint/re-cast so many of them I thought it would never end. But, at long last:

Snowflakes

flakes

Trees

trees

Gingerbreads

gingers

I may never actually get the wax out from under my fingernails and my arms are probably permanently pock marked from countless splash and sizzles, but I am superbly proud of myself. Yesterday I didn’t know how to make crayons. Now I can make them like a little eight armed robot. Almost.