http://www.smh.com.au/breaking/19990401/A27527-1999Mar31.shtml Dow shows rich getting richer, group says Source: AAP | Published: Thursday April 1 10:36:58 AM An organisation which fights the widening income gap in America says the Dow's historic 10,000-point close helps justify its crusade. Most US households, according to United for a Fair Economy, have lower net worths than they did in 1983, when the Dow was at 1,000. Only the wealthiest households have profited along with the gains of the Dow Jones industrial average, the Boston-based organisation says. 'We've had over two decades of public policies and corporate practices benefiting affluent asset owners at the expense of wage earners,' said Chuck Collins, co-director of United for a Fair Economy. The group has published a 94-page booklet, "Shifting Fortunes: The Perils of the Growing American Wealth Gap," based on research by Edward Wolff, a New York University economist, and other findings. The report says average US workers are earning less, adjusted for inflation, than they did during the Nixon presidency. Wolff calculates the wealthiest one per cent of households have 40 per cent of the national wealth. Looking at who has prospered because of the stock market's gains, 'Shifting Fortunes' says: -Nearly 90 per cent of the value of all stocks and mutual funds owned by households is in the hands of the wealthiest 10 per cent. -Ten per cent of households benefited from about 86 per cent of the stock market increases between 1989 and 1997. -Since the mid-1970s, the top one per cent of households doubled their share of the national wealth. "Only 45 per cent of Americans have stock in any form," said Betsy Leondar-Wright, an author of the report. "We hear so much about working Americans' access to 401(k) plans, but the reality is that lots of workers who are offered stock ownership through those plans can't afford to buy it because they need their income for living expenses." Separately, the Federal Reserve reports that 25 per cent of US household wealth is in stocks, up from eight per cent in 1984. The United for a Fair Economy report details the comparatively declining fortunes of the less wealthy. It says, for example, that the median inflation-adjusted net worth of US households was $US49,900 ($A78,767) in 1997, down from $US54,600 ($A86,186) in 1989. According to the report, nearly one in five US households has a zero or negative net worth. The report also said average weekly wages in 1998 were 12 per cent lower than in 1973, adjusting forinflation. The Fair Economy point of view is challenged by some economists. For example, W Michael Cox, a senior fellow at the National Centre for Policy Analysis and an economic adviser at the Federal Reserve Bank in Dallas, says measures of real-wage decline and widening wage gaps paint unduly pessimistic pictures. Cox, who recently co-wrote 'Myths of Rich and Poor: Why We're Better Off Than We Think,' says consumption - not real wages or investments - is a better measure of Americans' financial health. Cox contends that even the poorest Americans are better off in terms of how long they have to work to pay for things and what they get for their money. "Even the poor have more," according to Cox, who argues that a "you versus me" scorecard emphasising the widening income gap obscures the reality that all Americans are improving their lot. -- Leftlink - Australia's Broad Left Mailing List mailto:[EMAIL PROTECTED] http://www.alexia.net.au/~www/mhutton/index.html Sponsored by Melbourne's New International Bookshop Subscribe: mailto:[EMAIL PROTECTED]?Body=subscribe%20leftlink Unsubscribe: mailto:[EMAIL PROTECTED]?Body=unsubscribe%20leftlink -- Leftlink - Australia's Broad Left Mailing List mailto:[EMAIL PROTECTED] http://www.alexia.net.au/~www/mhutton/index.html Sponsored by Melbourne's New International Bookshop Subscribe: mailto:[EMAIL PROTECTED]?Body=subscribe%20leftlink Unsubscribe: mailto:[EMAIL PROTECTED]?Body=unsubscribe%20leftlink
