How America Became So Unequal [VIDEO]

There’s a good chance you’ve already seen this video on the distribution of wealth in America. If not, it’s well worth six minutes of your time.

WATCH: 

Created and posted to YouTube by a user named politizane, it graphically illustrates how the United States is much more unequal than Americans perceive and desire it to be.

“One percent of America has 40 percent of all the nation’s wealth,” the video’s narrator said. “The reality in this country is not at all what we think it is.”

The video doesn’t discuss how America became this unequal, though. The answer, in short, is the Reagan Revolution: Over the course of a few decades, Republican politicians created a political environment that allowed America’s richest to wildly increase their wealth.

As the video points out, such egregious inequality is new. Since the 1970s, the top one percent have tripled their share of national income.

“America was much more equal when you go back to the late '50s, and '60s,” Nicholas Finio, a researcher at the Economic Policy Institute, told Campus Progress. “Deliberate policy decisions have allowed this to happen."

Paul Krugman wrote in "The Conscience of a Liberal," his account of 20^th Century American economic history, that the rise in inequality can be captured in two words: taxes and unions.

In the 1960s, marginal income tax rates for America’s richest were as high as 90 percent, Finio said, but a series of cuts have left the top rate at just 39.6 percent. Capital gains, inheritance and wealth taxes are all lower now than in generations past, as well. The result is that wealthy Americans now keep much more of their cash than they once did.

As for unions, Krugman wrote:

Unions raise average wages for their membership; they also, indirectly and to a lesser extent, raise wages for similar workers, even if they aren’t represented by unions, as nonunionized employers try to diminish the appeal of union drives to their workers.

Shortly after World War II, more than a third of American workers were in a union, compared with just 11 percent today. In correlation to that decline, labor has earned a dwindling share of the nation’s total income, as more cash flows into the hands of capital.

The silver lining: Higher marginal tax rates and better labor protections can make America more equal. “Policy is what made it this way," Finio said, "and policy can turn it back.” 

Chris Lewis is a reporter at Campus Progress. Follow him on Twitter @chris_lewis_.

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