Imagine having over a billion dollars?! Well according to Forbes’ 2015 Billionaires List, released this week, a record 1826 people fall into this coveted class. Ranging from sports stars to entrepreneurs, the billionaires have an aggregate net worth of $7.05 trillion (up from $6.4 trillion in 2014). That equates to an average of $3.86 billion per person.
Predictably, Microsoft CEO Bill Gates tops the list with $79.2 billion. Gates has held the title for 16 of the last 21 years. Not far behind is Mexico’s Carlos Slim, a telecommunications mogul worth US$77.1 billion. Slim claimed the top spot in 2013. Rounding out the top 3 is the “Oracle of Omaha”, investor Warren Buffett. Buffett was also the list’s biggest gainer, adding $14.5 billion to reach $72.7 billion.
But while the number of billionaires continues to grow, the rest of Americans have little to celebrate. The US Census Bureau reports that the number of people in poverty remains stagnant at approximately 45.3 million. Likewise, in terms of the middle class, median household incomes have “remained essentially flat” at $51,939. This is approximately the same level as in 1996 and 8% lower than in 2007.
You can bet money on the effect of these economic trends: inequality in America is “soaring”. In fact, the top 1% of families now earns over 20% of the total US income (compared to under 10% in the late 1970s). Furthermore, the top 0.1% now holds 22% of the total US wealth (compared to 7% in the late 1970s). This means that approximately 160,000 families (with net assets over $20 million each) have as much wealth as the bottom 90%. Not since the Great Depression has inequality been so extreme.
Such inequality in the world’s richest country is both disturbing and immoral. In the words of Laura Tyson, the former Chair of the U.S. President’s Council of Economic Advisers, it is “incompatible with widely held norms of social justice and equality of opportunity”. After all, economic disadvantage “translates into ill health, missed educational opportunity, and…the familiar symptoms of depression: alcoholism, obesity, gambling, and minor criminality”. These effects also hinder upward mobility, resulting in “a vicious cycle [in which] inequality breeds more inequality”.
The solution is not clear cut. It involves addressing the many factors that contribute to inequality. These include economic conditions, like stagnate wages, anemic growth, and job losses due to globalization and technological innovation. They also include policies that have contributed to predatory lending, tuition increases, less progressive taxes, and exorbitant campaign spending (allowing the rich to “shape the political debate in favor of their interests”).
Philanthropy can also play an instrumental role, particularly in the absence of government intervention. Non-profits like the United Way of York County, the Oregon Food Bank, and the Virginia Association of Free Clinics can help meet the immediate needs of the disadvantaged by providing shelter, food, and healthcare. Moreover, non-profits like Junior Achievement, the Newmarket Community Education Partnership, and Opportunity Works Connecticut can help break the “vicious cycle” by providing education and career opportunities. If you stand for equality, begin by supporting these non-profits today.
Flickr photo credit: Domain Barnyard