COLORADO SPRINGS – As President Joe Biden’s proposed tax on the wealthiest Americans in the United States has died as a way to fund his social spending bill, inequality in the country has not, Ph.D. economist Tatiana Bailey says.
Bailey, who first organized this research in an article for the Colorado Springs Gazette in 2020, says she looked at three different ways to measure inequality in the nation.
“I really looked at it three different ways because I was really trying to poke holes that income inequality was growing in the United States, and I wanted to have the data in front of me,” Bailey said.
The three areas were wages (straight up paychecks and salaries earned from work), income (wages combined with money made from things like appreciating assets and rental properties), and wealth (income minus the debt someone owes).
First, a look at wages:
“Most economists, whether they’re on the left or on the right, say this isn’t sustainable,” Bailey said. “If you look back in human history, once your chasm starts to get too big, people don’t work as much; they figure out ways not to work. Sometimes, you get really bad political upheaval. You definitely get polarization.”
Next, a look at income:
Finally, Bailey analyzed wealth:
“A lot of people don’t have assets, and they don’t have homes or retirement accounts or so forth. In fact, wealth analysis showed that there is a significant portion of the American population that has negative wealth because they have more debt than they have actual liquid assets,” Bailey stated.
Her analysis of the Top 1 percent’s wealth showed those people have more worth ($36 trillion) than the national debt ($28 trillion).
When Bailey looks to the medium and long-term health of the economy, inflation has worried her, supply chain disruptions adding to it, she fears income and wealth inequality could exacerbate all those problems for the U.S.
“My concern is, are we going to continue with this income and wealth inequality? And is it going to be worse because of how home prices have increased, rents are increasing, and so forth? Bailey continues, “Are we going back to square one or even worse?”