🚀 go-pugleaf

Most people don't realize that they spend hundreds or even thousands of 
dollars a year buying the heavily advertised (HA) brand products in the 
grocery and department stores. There is nothing in the grocery or 
department stores that is rocket science. Many of the less advertised (LA) 
brands or store brands are just as good or better compared to the HA 
brands. You are paying for the brainwashing that many HA brand 
manufacturers put in their advertising campaigns. It is not difficult to 
make shampoos, conditioners, cleaning products and all those other products 
that can be found in your local grocery or department store. Why are you 
paying 4+ dollars for baby shampoo when you can buy the less advertised 
brand for half the money? Do you like wasting money? If the HA brand 
products are better why would companies be spending billions of dollars in 
advertising? The answer is that they are not better. They are trying to 
convince you that the high price they are charging is some how justified by 
a better product. If they were better they would not need to do the massive 
advertising; social networking would sell the product. Many times they are 
using terminology that means nothing. There is also false claims being made 
by these manufacturers. There are no advertising police. Even over the 
counter drugs like aspirin can be bought for half the price of the HA 
brands. This is a product that has been around for decades. The LA products 
are under the same FDA regulations as the HA brands. Save a lot of money 
and don't buy the over priced HA brands. 

When you pay the higher price for the HA brands you are paying for the 
ridiculous high salaries of the CEO's, private jets, golden parachutes and 
for the billions spent on advertising.

Every time you go to the store you can save several dollars. Over time this 
can amount to a significant amount of money. Tell the managers in the 
stores in which you shop that they need to carry more of the less 
advertised brands. In many stores they have been doing this for the past 
couple of years.

Get rid of those credit cards and use a debit card. By carrying a credit 
card balance do you realize how much extra money you're spending? 

In case you're thinking of buying insurance see the following link.


http://law.freeadvice.com/insurance_law/insurers_bad_faith/ten-worst-
insurance-companies.htm


Are you looking at food labels? Is it food or a chemistry set? 


Some of the information might be a surprise to many people. The most 
amazing numbers on income inequality come last, showing the change in the 
ratio of the average CEO's paycheck to that of the average factory worker 
over the past 40 years.

First, though, two definitions. Generally speaking, "wealth" is the value 
of everything a person or family owns, minus any debts. However, for 
purposes of studying the wealth distribution, economists define wealth in 
terms of marketable assets, such as real estate, stocks, and bonds, leaving 
aside consumer durables like cars and household items because they are not 
as readily converted into cash and are more valuable to their owners for 
use purposes than they are for resale (Wolff, 2004, p. 4, for a full 
discussion of these issues). Once the value of all marketable assets is 
determined, then all debts, such as home mortgages and credit card debts, 
are subtracted, which yields a person's net worth. In addition, economists 
use the concept of financial wealth, which is defined as net worth minus 
net equity in owner-occupied housing. As Wolff (2004, p. 5) explains, 
"Financial wealth is a more 'liquid' concept than marketable wealth, since 
one's home is difficult to convert into cash in the short term. It thus 
reflects the resources that may be immediately available for consumption or 
various forms of investments."

We also need to distinguish wealth from income. Income is what people earn 
from wages, dividends, interest, and any rents or royalties that are paid 
to them on properties they own. In theory, those who own a great deal of 
wealth may or may not have high incomes, depending on the returns they 
receive from their wealth, but in reality those at the very top of the 
wealth distribution usually have the most income.
The Wealth Distribution

In the United States, wealth is highly concentrated in a relatively few 
hands. As of 2004, the top 1% of households (the upper class) owned 34.3% 
of all privately held wealth, and the next 19% (the managerial, 
professional, and small business stratum) had 50.3%, which means that just 
20% of the people owned a remarkable 85%, leaving only 15% of the wealth 
for the bottom 80% (wage and salary workers). In terms of financial wealth 
(total net worth minus the value of one's home), the top 1% of households 
had an even greater share: 42.2%. Table 1 and Figure 1 present further 
details drawn from the careful work of economist Edward N. Wolff at New 
York University (2007).

Table 1: Distribution of net worth and financial wealth in the United 
States, 1983-2004
 	Total Net Worth
Top 1 percent	Next 19 percent	Bottom 80 percent
1983	33.8%		47.5%			18.7%
1989	37.4%		46.2%			16.5%
1992	37.2%		46.6%			16.2%
1995	38.5%		45.4%			16.1%
1998	38.1%		45.3%			16.6%
2001	33.4%		51.0%			15.6%
2004	34.3%		50.3%			15.3%
 
 	Financial Wealth 
Top 1 percent	Next 19 percent	Bottom 80 percent 
1983	42.9%		48.4%			8.7%
1989	46.9%		46.5%			6.6%
1992	45.6%		46.7%			7.7%
1995	47.2%		45.9%			7.0%
1998	47.3%		43.6%			9.1%
2001	39.7%		51.5%			8.7%
2004	42.2%		50.3%			7.5%


Total assets are defined as the sum of: (1) the gross value of owner-
occupied housing; (2) other real estate owned by the household; (3) cash 
and demand deposits; (4) time and savings deposits, certificates of 
deposit, and money market accounts; (5) government bonds, corporate bonds, 
foreign bonds, and other financial securities; (6) the cash surrender value 
of life insurance plans; (7) the cash surrender value of pension plans, 
including IRAs, Keogh, and 401(k) plans; (8) corporate stock and mutual 
funds; (9) net equity in unincorporated businesses; and (10) equity in 
trust funds.

Total liabilities are the sum of: (1) mortgage debt; (2) consumer debt, 
including auto loans; and (3) other debt. From Wolff (2004 & 2007).


Figure 1: Net worth and financial wealth distribution in the U.S. in 2004


In terms of types of financial wealth, the top one percent of households 
have 36.7% of all privately held stock, 63.8% of financial securities, and 
61.9% of business equity. The top 10% have 85% to 90% of stock, bonds, 
trust funds, and business equity, and over 75% of non-home real estate. 
Since financial wealth is what counts as far as the control of income-
producing assets, we can say that just 10% of the people own the United 
States of America.
Table 2: Wealth distribution by type of asset, 2004
 	Investment Assets
Top 1 percent	Next 9 percent	Bottom 90 percent
Business equity		61.9%		28.4%		9.7%
Financial securities	63.8%		24.1%		12.1%
Trusts			47.7%		33.9%		18.5%
Stocks and mutual funds	36.7%		42.0%		21.2%
Non-home real estate	36.8%		42.6%		20.6%
TOTAL				50.3%		35.3%		14.4%
 
 	Housing, Liquid Assets, Pension Assets, and Debt 
			Top 1 percent	Next 9 percent	Bottom 90 percent 
Deposits			20.8%		40.1%			39.1%
Pension accounts		13.5%		44.8%			41.7%
Life insurance		21.4%		36.0%			42.7%
Principal residence	9.8%		28.2%			62.0%
Debt				7.2%		19.9%			73.0%
TOTAL				2.2%		33.5%			54.3%
 
From Wolff (2007).


Figure 2a: Wealth distribution by type of asset, 2004: investment assets


Figure 2b: Wealth distribution by type of asset, 2004: other assets




Figures on inheritance tell much the same story. According to a study 
published by the Federal Reserve Bank of Cleveland, only 1.6% of Americans 
receive $100,000 or more in inheritance. Another 1.1% receive $50,000 to 
$100,000. On the other hand, 91.9% receive nothing (Kotlikoff & Gokhale, 
2000). Thus, the attempt by ultra-conservatives to eliminate inheritance 
taxes -- which they always call "death taxes" for P.R. reasons -- would 
take a huge bite out of government revenues for the benefit of less than 1% 
of the population. (It is noteworthy that some of the richest people in the 
country oppose this ultra-conservative initiative, suggesting that this 
effort is driven by anti-government ideology. In other words, few of the 
ultra-conservatives behind the effort will benefit from it in any material 
way.)

For the vast majority of Americans, their homes are by far the most 
significant wealth they possess. Figure 3 comes from the Federal Reserve 
Board's Survey of Consumer Finances (via Wolff, 2007) and compares the 
median income, total wealth (net worth, which is marketable assets minus 
debt), and non-home wealth (which earlier we called financial wealth) of 
White, Black, and Hispanic households in the U.S.
Figure 3: Income and wealth by race in the U.S.


Besides illustrating the significance of home ownership as a measure of 
wealth, the graph also shows how much worse Black and Latino households are 
faring overall, whether we are talking about income or net worth. In 2004, 
the average white household had 10 times as much total wealth as the 
average African-American household, and 21 times as much as the average 
Latino household. If we exclude home equity from the calculations and 
consider only financial wealth, the ratios are more startling: 120:1 and 
360:1, respectively. Extrapolating from these figures, we see that 69% of 
white families' wealth is in the form of their principal residence; for 
Blacks and Hispanics, the figures are 97% and 98%, respectively.
Historical context

Numerous studies show that the wealth distribution has been extremely 
concentrated throughout American history, with the top 1% already owning 
40-50% in large port cities like Boston, New York, and Charleston in the 
19th century (Keister, 2005). It was very stable over the course of the 
20th century, although there were small declines in the aftermath of the 
New Deal and World II, when most people were working and could save a 
little money. There were progressive income tax rates, too, which took some 
money from the rich to help with government services.

Then there was a further decline, or flattening, in the 1970s, but this 
time in good part due to a fall in stock prices, meaning that the rich lost 
some of the value in their stocks. By the late 1980s, however, the wealth 
distribution was almost as concentrated as it had been in 1929, when the 
top 1% had 44.2% of all wealth. It has continued to edge up since that 
time, with a slight decline from 1998 to 2004, before the economy crashed 
in the late 2000s and little people got pushed down again. Table 3 and 
Figure 4 present the details from 1922 through 2004.
Table 3: Share of wealth held by the Bottom 99% and Top 1% in the United 
States, 1922-2004.

 	Bottom 99 percent	Top 1 percent
1922		63.3%		36.7%
1929		55.8%		44.2%
1933		66.7%		33.3%
1939		63.6%		36.4%
1945		70.2%		29.8%
1949		72.9%		27.1%
1953		68.8%		31.2%
1962		68.2%		31.8%
1965		65.6%		34.4%
1969		68.9%		31.1%
1972		70.9%		29.1%
1976		80.1%		19.9%
1979		79.5%		20.5%
1981		75.2%		24.8%
1983		69.1%		30.9%
1986		68.1%		31.9%
1989		64.3%		35.7%
1992		62.8%		37.2%
1995		61.5%		38.5%
1998		61.9%		38.1%
2001		66.6%		33.4%
2004		65.7%		34.3%


Sources: 1922-1989 data from Wolff (1996). 1992-2004 data from Wolff 
(2007).


Figure 4: Share of wealth held by the Bottom 99% and Top 1% in the United 
States, 1922-2004.




Here are some dramatic facts that sum up how the wealth distribution became 
even more concentrated between 1983 and 2004, in good part due to the tax 
cuts for the wealthy and the defeat of labor unions: Of all the new 
financial wealth created by the American economy in that 21-year-period, 
fully 42% of it went to the top 1%. A whopping 94% went to the top 20%, 
which of course means that the bottom 80% received only 6% of all the new 
financial wealth generated in the United States during the '80s, '90s, and 
early 2000s (Wolff, 2007).
The rest of the world

Thanks to a 2006 study by the World Institute for Development Economics 
Research -- using statistics for the year 2000 -- we now have information 
on the wealth distribution for the world as a whole, which can be compared 
to the United States and other well-off countries. The authors of the 
report admit that the quality of the information available on many 
countries is very spotty and probably off by several percentage points, but 
they compensate for this problem with very sophisticated statistical 
methods and the use of different sets of data. With those caveats in mind, 
we can still safely say that the top 10% of the world's adults control 
about 85% of global household wealth -- defined very broadly as all assets 
(not just financial assets), minus debts. That compares with a figure of 
69.8% for the top 10% for the United States. The only industrialized 
democracy with a higher concentration of wealth in the top 10% than the 
United States is Switzerland at 71.3%. For the figures for several other 
Northern European countries and Canada, all of which are based on high-
quality data, see Table 4.Table 4: Percentage of wealth held by the Top 10% 
of the adult population in various Western countries
country	wealth owned by top 10%

Switzerland		71.3%
United States	69.8%
Denmark		65.0%
France		61.0%
Sweden		58.6%
UK			56.0%
Canada		53.0%
Norway		50.5%
Germany		44.4%
Finland		42.3%


The Relationship Between Wealth and Power

What's the relationship between wealth and power? To avoid confusion, let's 
be sure we understand they are two different issues. Wealth, as I've said, 
refers to the value of everything people own, minus what they owe, but the 
focus is on "marketable assets" for purposes of economic and power studies. 
Power, as explained elsewhere on this site, has to do with the ability (or 
call it capacity) to realize wishes, or reach goals, which amounts to the 
same thing, even in the face of opposition (Russell, 1938; Wrong, 1995). 
Some definitions refine this point to say that power involves Person A or 
Group A affecting Person B or Group B "in a manner contrary to B's 
interests," which then necessitates a discussion of "interests," and 
quickly leads into the realm of philosophy (Lukes, 2005, p. 30). Leaving 
those discussions for the philosophers, at least for now, how do the 
concepts of wealth and power relate?

First, wealth can be seen as a "resource" that is very useful in exercising 
power. That's obvious when we think of donations to political parties, 
payments to lobbyists, and grants to experts who are employed to think up 
new policies beneficial to the wealthy. Wealth also can be useful in 
shaping the general social environment to the benefit of the wealthy, 
whether through hiring public relations firms or donating money for 
universities, museums, music halls, and art galleries.

Second, certain kinds of wealth, such as stock ownership, can be used to 
control corporations, which of course have a major impact on how the 
society functions. Tables 5a and 5b show what the distribution of stock 
ownership looks like. Note how the top one percent's share of stock equity 
increased (and the bottom 80 percent's share decreased) between 2001 and 
2004.

Table 5a: Concentration of stock ownership in the United States, 2001-2004
 	Percent of all stock owned:

Wealth class	2001	2004
Top		 1%	33.5%	36.7%
Next 		19%	55.8%	53.9%
Bottom 	80%	10.7%	9.4%

Table 5b: Amount of stock owned by various wealth classes in the U.S., 2004
 	Percent of households owning stocks worth:

Wealth class	More than $0	More than $5,000	More than $10,000
Top 	1%			93.3%		93.2%			92.8%
95-99%			93.5%		92.7%			91.0%
90-95%			87.4%		85.6%			80.3%
80-90%			84.3%		77.0%			71.5%
60-80%			65.5%		54.4%			47.1%
40-60%			46.4%		28.7%			20.3%
20-40%			31.6%		13.4%			8.3%
Bottom 20%			12.2%		2.5%			1.1%
TOTAL				48.6%		36.4%			31.1%

Both tables' data from Wolff (2007).  Includes direct ownership of stock 
shares and indirect ownership through mutual funds, trusts, and IRAs, Keogh 
plans, 401(k) plans, and other retirement accounts. All figures are in 2004 
dollars. 


Third, just as wealth can lead to power, so too can power lead to wealth. 
Those who control a government can use their position to feather their own 
nests, whether that means a favorable land deal for relatives at the local 
level or a huge federal government contract for a new corporation run by 
friends who will hire you when you leave government. If we take a larger 
historical sweep and look cross-nationally, we are well aware that the 
leaders of conquering armies often grab enormous wealth, and that some 
religious leaders use their positions to acquire wealth.

There's a fourth way that wealth and power relate. For research purposes, 
the wealth distribution can be seen as the main "value distribution" within 
the general power indicator I call "who benefits." What follows in the next 
three paragraphs is a little long-winded, I realize, but it needs to be 
said because some social scientists -- primarily pluralists -- argue that 
who wins and who loses in a variety of policy conflicts is the only valid 
power indicator (Dahl, 1957, 1958; Polsby, 1980). And philosophical 
discussions don't even mention wealth or other power indicators (Lukes, 
2005). (If you have heard it all before, or can do without it, feel free to 
skip ahead to the last paragraph of this section)

Here's the argument: if we assume that most people would like to have as 
great a share as possible of the things that are valued in the society, 
then we can infer that those who have the most goodies are the most 
powerful. Although some value distributions may be unintended outcomes that 
do not really reflect power, as pluralists are quick to tell us, the 
general distribution of valued experiences and objects within a society 
still can be viewed as the most publicly visible and stable outcome of the 
operation of power.

In American society, for example, wealth and well-being are highly valued. 
People seek to own property, to have high incomes, to have interesting and 
safe jobs, to enjoy the finest in travel and leisure, and to live long and 
healthy lives. All of these "values" are unequally distributed, and all may 
be utilized as power indicators. However, the primary focus with this type 
of power indicator is on the wealth distribution sketched out in the 
previous section.

The argument for using the wealth distribution as a power indicator is 
strengthened by studies showing that such distributions vary historically 
and from country to country, depending upon the relative strength of rival 
political parties and trade unions, with the United States having the most 
highly concentrated wealth distribution of any Western democracy except 
Switzerland. For example, in a study based on 18 Western democracies, 
strong trade unions and successful social democratic parties correlated 
with greater equality in the income distribution and a higher level of 
welfare spending (Stephens, 1979).

And now we have arrived at the point I want to make. If the top 1% of 
households have 30-35% of the wealth, that's 30 to 35 times what we would 
expect by chance, and so we infer they must be powerful. And then we set 
out to see if the same set of households scores high on other power 
indicators (it does). Next we study how that power operates, which is what 
most articles on this site are about. Furthermore, if the top 20% have 84% 
of the wealth (and recall that 10% have 85% to 90% of the stocks, bonds, 
trust funds, and business equity), that means that the United States is a 
power pyramid. It's tough for the bottom 80% -- maybe even the bottom 90% -
- to get organized and exercise much power.
Income and Power

The income distribution also can be used as a power indicator. As Table 6 
shows, it is not as concentrated as the wealth distribution, but the top 1% 
of income earners did receive 17% of all income in the year 2003. That's up 
from 12.8% for the top 1% in 1982, which is quite a jump, and it parallels 
what is happening with the wealth distribution. This is further support for 
the inference that the power of the corporate community and the upper class 
have been increasing in recent decades.
Table 6: Distribution of income in the United States, 1982-2003
 
 	Income
Top 1 percent	Next 19 percent	Bottom 80 percent
1982	12.8%		39.1%			48.1%
1988	16.6%		38.9%			44.5%
1991	15.7%		40.7%			43.7%
1994	14.4%		40.8%			44.9%
1997	16.6%		39.6%			43.8%
2000	20.0%		38.7%			41.4%
2003	17.0%		40.8%			42.2%
 
From Wolff (2007).



The rising concentration of income can be seen in a special New York Times 
analysis of an Internal Revenue Service report on income in 2004. Although 
overall income had grown by 27% since 1979, 33% of the gains went to the 
top 1%. Meanwhile, the bottom 60% were making less: about 95 cents for each 
dollar they made in 1979. The next 20% - those between the 60th and 80th 
rungs of the income ladder -- made $1.02 for each dollar they earned in 
1979. Furthermore, the Times author concludes that only the top 5% made 
significant gains ($1.53 for each 1979 dollar). Most amazing of all, the 
top 0.1% -- that's one-tenth of one percent -- had more combined pre-tax 
income than the poorest 120 million people (Johnston, 2006).

But the increase in what is going to the few at the top did not level off, 
even with all that. As of 2007, income inequality in the United States was 
at an all-time high for recent history, with the top 0.01% -- that's one-
hundredth of one percent -- receiving 6% of all U.S. wages, which is double 
what it was for that tiny slice in 2000; the top 10% received 49.7%, the 
highest since 1917 (Saez, 2009).

A key factor behind the high concentration of income, and the likely reason 
that the concentration has been increasing, can be seen by examining the 
distribution of what is called "capital income": income from capital gains, 
dividends, interest, and rents. In 2003, just 1% of all households -- those 
with after-tax incomes averaging $701,500 -- received 57.5% of all capital 
income, up from 40% in the early 1990s. On the other hand, the bottom 80% 
received only 12.6% of capital income, down by nearly half since 1983, when 
the bottom 80% received 23.5%. Figure 5 and Table 7 provide the details.
Figure 5: Share of capital income earned by top 1% and bottom 80%, 1979-
2003 (From Shapiro & Friedman, 2006.)



Table 7: Share of capital income flowing to households in various income 
categories
 	Top 1%	Top 5%	Top 10% 	Bottom 80%
1979	37.8%		57.9%		66.7%		23.1%
1981	35.8%		55.4%		64.6%		24.4%
1983	37.6%		55.2%		63.7%		25.1%
1985	39.7%		56.9%		64.9%		24.9%
1987	36.7%		55.3%		64.0%		25.6%
1989	39.1%		57.4%		66.0%		23.5%
1991	38.3%		56.2%		64.7%		23.9%
1993	42.2%		60.5%		69.2%		20.7%
1995	43.2%		61.5%		70.1%		19.6%
1997	45.7%		64.1%		72.6%		17.5%
1999	47.8%		65.7%		73.8%		17.0%
2001	51.8%		67.8%		74.8%		16.0%
2003	57.5%		73.2%		79.4%		12.6%

Adapted from Shapiro & Friedman (2006).




Another way that income can be used as a power indicator is by comparing 
average CEO annual pay to average factory worker pay, something that 
Business Week has been doing for many years now. The ratio of CEO pay to 
factory worker pay rose from 42:1 in 1960 to as high as 531:1 in 2000, at 
the height of the stock market bubble, when CEOs were cashing in big stock 
options;. It was at 411:1 in 2005. By way of comparison, the same ratio is 
about 25:1 in Europe. The changes in the American ratio are displayed in 
Figure 6.
Figure 6: CEOs' pay as a multiple of the average worker's pay




It's even more revealing to compare the actual rates of increase of the 
salaries of CEOs and ordinary workers; from 1990 to 2005, CEOs' pay 
increased almost 300% (adjusted for inflation), while production workers 
gained a scant 4.3%. The purchasing power of the federal minimum wage 
actually declined by 9.3%, when inflation is taken into account. These 
startling results are illustrated in Figure 7.
Figure 7: CEOs' average pay, production workers' average pay, the S&P 500 
Index, corporate profits, and the federal minimum wage, 1990-2005 (all 
figures adjusted for inflation)

Source: Executive Excess 2006, the 13th Annual CEO Compensation Survey from 
the Institute for Policy Studies and United for a Fair Economy.



If you wonder how such a large gap could develop, the proximate, or most 
immediate, factor involves the way in which CEOs now are able to rig things 
so that the board of directors, which they help select -- and which 
includes some fellow CEOs on whose boards they sit -- gives them the pay 
they want. The trick is in hiring outside experts, called "compensation 
consultants," who give the process a thin veneer of economic 
respectability.

The process has been explained in detail by a retired CEO of DuPont, Edgar 
S. Woolard, Jr., who is now chair of the New York Stock Exchange's 
executive compensation committee. His experience suggests that he knows 
whereof he speaks, and he speaks because he's concerned that corporate 
leaders are losing respect in the public mind. He says that the business 
page chatter about CEO salaries being set by the competition for their 
services in the executive labor market is "bull." As to the claim that CEOs 
deserve ever higher salaries because they "create wealth," he describes 
that rationale as a "joke," says the New York Times (Morgenson, 2005, 
Section 3, p. 1).

Here's how it works, according to Woolard:

The compensation committee [of the board of directors] talks to an outside 
consultant who has surveys you could drive a truck through and pay anything 
you want to pay, to be perfectly honest. The outside consultant talks to 
the human resources vice president, who talks to the CEO. The CEO says what 
he'd like to receive. It gets to the human resources person who tells the 
outside consultant. And it pretty well works out that the CEO gets what 
he's implied he thinks he deserves, so he will be respected by his peers. 
(Morgenson, 2005.)

The board of directors buys into what the CEO asks for because the outside 
consultant is an "expert" on such matters. Furthermore, handing out only 
modest salary increases might give the wrong impression about how highly 
the board values the CEO. And if someone on the board should object, there 
are the three or four CEOs from other companies who will make sure it 
happens. It is a process with a built-in escalator.

As for why the consultants go along with this scam, they know which side 
their bread is buttered on. They realize the CEO has a big say-so on 
whether or not they are hired again. So they suggest a package of salaries, 
stock options and other goodies that they think will please the CEO, and 
they, too, get rich in the process. And certainly the top executives just 
below the CEO don't mind hearing about the boss's raise. They know it will 
mean pay increases for them, too. (For an excellent detailed article on the 
main consulting firm that helps CEOs and other corporate executives raise 
their pay, check out the New York Times article entitled "America's 
Corporate Pay Pal", which supports everything Woolard of DuPont claims and 
adds new information.)

There's a much deeper power story that underlies the self-dealing and 
mutual back-scratching by CEOs now carried out through interlocking 
directorates and seemingly independent outside consultants. It probably 
involves several factors. At the least, on the worker side, it reflects an 
increasing lack of power following the all-out attack on unions in the 
1960s and 1970s, which is explained in detail by the best expert on recent 
American labor history, James Gross (1995), a labor and industrial 
relations professor at Cornell. That decline in union power made possible 
and was increased by both outsourcing at home and the movement of 
production to developing countries, which were facilitated by the break-up 
of the New Deal coalition and the rise of the New Right (Domhoff, 1990, 
Chapter 10). It signals the shift of the United States from a high-wage to 
a low-wage economy, with professionals protected by the fact that foreign-
trained doctors and lawyers aren't allowed to compete with their American 
counterparts in the direct way that low-wage foreign-born workers are.

On the other side of the class divide, the rise in CEO pay may reflect the 
increasing power of chief executives as compared to major owners and 
stockholders in general, not just their increasing power over workers. CEOs 
may now be the center of gravity in the corporate community and the power 
elite, displacing the leaders in wealthy owning families (e.g., the second 
and third generations of the Walton family, the owners of Wal-Mart). True 
enough, the CEOs are sometimes ousted by their generally go-along boards of 
directors, but they are able to make hay and throw their weight around 
during the time they are king of the mountain. (It's really not much 
different than that old children's game, except it's played out in profit-
oriented bureaucratic hierarchies, with no other sector of society, like 
government, willing or able to restrain the winners.)

The claims made in the previous paragraph need much further investigation. 
But they demonstrate the ideas and research directions that are suggested 
by looking at the wealth and income distributions as indicators of power.

Further Information
The 2007 Wolff paper is on-line at http://www.levy.org/vdoc.aspx?docid=929
The Census Bureau report is on line at 
http://www.census.gov/hhes/www/wealth/wealth.html
The World Institute for Development Economics Research (UNU-WIDER) report 
on household wealth throughout the world is available at 
http://tinyurl.com/wdhw08; see the WIDER site for more about their 
research.
For good summaries of other information on wealth and income, and for 
information on the estate tax, see the United For A Fair Economy site at 
http://www.faireconomy.org/
The New York Times ran an excellent series of articles on executive 
compensation in the fall of 2006 entitled "Gilded Paychecks." Look for it 
by searching the archives on NYTimes.com. 
To see a video of Ed Woolard giving his full speech about executive 
compensation, go to 
http://www.compensationstandards.com/nonmember/EdWoolard_video.asp (WMV 
file, may not be viewable on all platforms/browsers)
The Shapiro & Friedman paper on capital income, along with many other 
reports on the federal budget and its consequences, are available at the 
Center on Budget and Policy Priorities site: 
http://www.cbpp.org/pubs/recent.html
The AFL-CIO maintains a site called "Executive Paywatch," which summarizes 
information about the salary disparity between executives and other 
workers: http://www.aflcio.org/paywatch/
More raw numbers about the unequal wealth distribution in the U.S. are 
available at Inequality.org: http://www.inequality.org/facts.html
Emmanuel Saez, Professor of Economics at UC Berkeley, has written or co-
authored a number of papers on income inequality and related topics: 
http://elsa.berkeley.edu/~saez/
References

Anderson, S., Cavanagh, J., Klinger, S., & Stanton, L. (2005). Executive 
Excess 2005: Defense Contractors Get More Bucks for the Bang. Washington, 
DC: Institute for Policy Studies / United for a Fair Economy.

Dahl, R. A. (1957). The concept of power. Behavioral Science, 2, 202-210.

Dahl, R. A. (1958). A critique of the ruling elite model. American 
Political Science Review, 52, 463-469.

Davies, J. B., Sandstrom, S., Shorrocks, A., & Wolff, E. N. (2006). The 
World Distribution of Household Wealth. Helsinki: World Institute for 
Development Economics Research.

Domhoff, G. W. (1990). The Power Elite and the State: How Policy Is Made in 
America. Hawthorne, NY: Aldine de Gruyter.

Gross, J. A. (1995). Broken Promise: The Subversion of U.S. Labor Relations 
Policy. Philadelphia: Temple University Press.

Johnston, D. C. (2006, November 28). '04 Income in U.S. Was Below 2000 
Level. New York Times, p. C-1.

Keister, L. (2005). Getting Rich: A Study of Wealth Mobility in America. 
New York: Cambridge University Press.

Kotlikoff, L., & Gokhale, J. (2000). The Baby Boomers' Mega-Inheritance: 
Myth or Reality? Cleveland: Federal Reserve Bank of Cleveland.

Lukes, S. (2005). Power: A Radical View (Second ed.). New York: Palgrave.

Morgenson, G. (2005, October 23). How to slow runaway executive pay. New 
York Times, Section 3, p. 1.

Polsby, N. (1980). Community Power and Political Theory (Second ed.). New 
Haven, CT: Yale University Press.

Russell, B. (1938). Power: A New Social Analysis. London: Allen and Unwin.

Saez, E. (2009). Striking It Richer: The Evolution of Top Incomes in the 
United States (Update with 2007 Estimates). Retrieved August 28, 2009 from 
http://elsa.berkeley.edu/~saez/saez-UStopincomes-2007.pdf.

Saez, E., & Piketty, T. (2003). Income Inequality in the United States, 
1913-1998. Quarterly Journal of Economics, 118, 1-39.

Shapiro, I., & Friedman, J. (2006). New, Unnoticed CBO Data Show Capital 
Income Has Become Much More Concentrated at the Top. Washington, DC: Center 
on Budget and Policy Priorities.

Stephens, J. (1979). The Transition from Capitalism to Socialism. London: 
Macmillan.

Wolff, E. N. (1996). Top Heavy. New York: The New Press.

Wolff, E. N. (2004). Changes in Household Wealth in the 1980s and 1990s in 
the U.S. Unpublished manuscript.

Wolff, E. N. (2007). Recent Trends in Household Wealth in the United 
States: Rising Debt and the Middle-Class Squeeze Annandale-on-Hudson, NY: 
The Levy Economics Institute.

Wrong, D. (1995). Power: Its Forms, Bases, and Uses (Second ed.). New 
Brunswick: Transaction Publishers.


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