|Income inequality as protest (taken on Sunday in NY by the author)|
If you need any numbers to help convince colleagues that the economics of income inequality will be probably your biggest non-environmental driver for sustainability strategy, then take a look at these:
• The destruction of wealth that resulted from the Great Recession was widespread but not uniform. From 2007 to 2009, average annualized household declines in wealth were 16% for the richest fifth of Americans and 25% for the remaining four-fifths.
• The divvying up of the total wealth pie, even as the pie shrank, was made more uneven due to larger drops in wealth for those at the bottom. The share of wealth held by the richest fifth of American households increased by 2.2 percentage points to 87.2%, while the remaining four-fifths gave up those 2.2 percentage points and held onto just 12.8% of all wealth.
• The wealthiest 1% of U.S. households had net worth that was 225 times greater than the median or typical household’s net worth in 2009. This is the highest ratio on record.
• In 2009, approximately one in four U.S. households had zero or negative net worth, up from 18.6% in 2007. For black households the figure was about 40%.
• The median net worth of black households was $2,200 in 2009, the lowest ever recorded; the median among white households was $97,900.
• Even at the 2007 economic peak, half of all U.S. households owned no stocks at all—either directly or indirectly through mutual or retirement funds.
• Homeownership rates fell from a peak of 69.0% in 2004 to 67.2% in 2009, and house prices fell 32% from 2006 through the first quarter of 2009. Prices have since rebounded slightly but were at mid-2003 levels in the third quarter of 2010.
• Because of the housing bust, home equity as a percent of home value fell from 59.5% in the first quarter of 2006 to 36.2% in the fourth quarter of 2009. For the first time on record, the percent of home value that homeowners own outright dropped below 50%—meaning that banks now own more of the nation’s housing stock than people do.
And here’s Paul Collier on what to do with the bottom billion: