By Greg Iacurci, CNBC
February 10, 2020
https://www.cnbc.com/2020/02/10/oscar-winning-parasite-evokes-growing-us-wealth-gap.html
In “Parasite,” the South Korean thriller that took home four Oscars Sunday night, including the award for best picture, the tension between rich and poor is on full display, juxtaposing the luxury and abundance of the haves with the hardship and squalor of the have-nots.
It’s a theme that translates well to the U.S. — and which may well decide the trajectory of the 2020 presidential election.
America’s wealth divide — a measure of the country’s wealth held by the most affluent compared with the rest of the population — has grown substantially over the past few decades.
While the top echelon has recovered since the 2008 financial crisis, the middle class hasn’t enjoyed that same fortune, according to researchers at the Brookings Institution.
Income inequality in the U.S. is higher than in other advanced economies, according to the Pew Research Center.
This is all despite a stock market that’s been on its longest winning streak in history and a labor market that’s seen more job creation than any in the post-World War II era.
“I think ‘Parasite’ as a theme is really resonant in our elections and our economy,” said Jamie Court, president of Consumer Watchdog, a consumer advocacy group.
“There’s always been a divide, but it hasn’t always been an abyss,” Court said. “It hasn’t always been the Mariana Trench. It’s never been this bad.”
The share of total U.S. income, such as wages, among the wealthy has grown markedly in the past three decades.
The top 10% of Americans made half the country’s pre-tax household income in 2016, up from 42% in 1989, according to the Federal Reserve Bank of St. Louis. That means the rest of the country lost an equivalent share.
The wealth gap is increasing despite economic growth
Wealth inequality has shifted even more starkly.
“There’s always been a divide, but it hasn’t always been an abyss. It hasn’t always been the Mariana Trench.” — Jamie Court, President of Consumer Watchdog
The 400 wealthiest Americans — people like Jeff Bezos and Bill Gates — are now richer than the 150 million adults in the bottom 60% of the wealth distribution, according to a paper published last year by Gabriel Zucman, an economist at the University of California at Berkeley.
The 400 richest Americans are worth a record $2.96 trillion, according to Forbes.
In 1989, the top 10% of Americans owned roughly two-thirds of U.S. wealth, as measured by things like savings, 401(k) plans and real estate, subtracted by debts such as mortgages and student loans. As of 2016, that share had grown substantially, to 77%, according to the Federal Reserve Bank of St. Louis.
Meanwhile, the bottom 50% of Americans — 63 million families — saw their share of total wealth decrease to 1% from 3% over that period.
Their average wealth decreased from about $21,000 to $16,000. One in 10 families had a negative net worth, the Federal Reserve Bank of St. Louis found.
Almost 40% of Americans wouldn’t be able to cover an unexpected $400 expense using cash or savings, according to the Federal Reserve Board.
“The United States is a rich country, but it is becoming one in which a very small number of citizens own most of the wealth, and from which both younger Americans and the broad middle class are failing to benefit,” according to a Brookings Institution report authored by researchers Isabel Sawhill and Christopher Pulliam.
Candidates vying for the Democratic presidential nomination in the 2020 election are leveraging the divide to guide their respective agendas and appeal to low- and middle-income Americans.
Many candidates have proposed increasing taxes on the wealthy — via a wealth tax, higher income taxes and an expanded estate tax, for example — to help fund programs such as expanded health care, universal child care and student loan forgiveness.
President Donald Trump also seized on economic anxieties to appeal to voters in the 2016 election.
“Donald Trump won the presidency in part because he played on the ‘Parasite’ theme,” Court said. “And Bernie may win the presidency because he’s playing on the ‘Parasite’ theme.”
Sen. Bernie Sanders (I-Vt.) is polling second nationally behind front runner and former vice president Joe Biden, according to a polling average from RealClearPolitics. He was among the top finishers in the Iowa Democratic caucus last week, receiving slightly fewer delegates overall than contender Pete Buttigieg, the former mayor of South Bend, Indiana.
