The Charactaristics & Consequences of a Capitalist Economy 62 Summer St. Boston, MA, 02110 www.faireconomy.org info@faireconomy.org 617-423-2148
Defining Capitalism An economic system in which a country s trade and industry are controlled by private owners for profit, rather than by the state. Oxford English Dictionary 2
What s the Difference Between Income & Wealth? Think of a running stream that flows through a lake. Income is the money & assets that flow into the lake. Expenses are the money & assets that flow out. If there s anything left over, that s your Net Wealth. 3
Ownership of Household Wealth in the U.S., 2012 Top 1% 39.8% The total net worth of the top 1% = $21.9 Trillion The total net worth of the bottom 90% = $18.4 Trillion 60.2% Bottom 99% Source: Wealth distribution: Emmanuel Saez and Gabriel Zucman, March 2014. Total net worth: Edward N. Wolff, New York University, 2012. 4
Household Median Net Wealth by Race, 2013 $140,000 $141,900 $120,000 $100,000 Net Wealth is ASSETS minus DEBTS (What You OWN minus What You OWE) $80,000 Source: Pew Research Center tabulations of Survey of Consumer Finances public-use data. African Americans and Whites include only non-latinos. (Dollar figures are in 2013 dollars.) $60,000 $40,000 $20,000 $11,000 $13,700 $0 African American Latino White 5
Median Wealth of Single Women and Men by Race/Ethnicity, 2013 $30,000 $28,900 $25,000 $20,000 Men Women $15,000 $15,640 $10,000 $5,000 $0 $300 $200 $950 $100 data not available White Black Latino/Latina Native American Sources: Mariko Lin Chang (2015), Women and Wealth: Insights for Grantmakers. For single men and women ages 18-64. 6
Institutional Racism Institutional racism refers specifically to ways in which institutional policies and practices create different outcomes for different racial groups. The institutional policies may never mention any racial group, but their effect is to create advantages for whites and oppression and disadvantages for people from groups classified as non-white. Source: Maggie Potapchuk, Sally Leiderman, Donna Bivens and Barbara Major. Flipping the Script: White Privilege and Community Building 7
The Power Shift Since the 1970s On the Rise Big Campaign Contributors Corporate Lobbyists Corporations Big Asset Owners CEOs Wall Street In Decline Popular Political Movements Voters Labor Unions Wage Earners Employees Main Street 8
Rule Changes Since the 1970s Policy changes reflect and reinforce the power shift. Minimum Wage: Unions: Trade: Taxes: Budget: Not raised to keep up with inflation & increased cost of living. Anti-union climate weakens the power & voice of workers. Global treaties benefit corporations, not workers or communities. Taxes shifted from big investors and corporations to workers. Public services cut. Corporate subsidies expand. Privatization: Government outsourcing plus no-bid contracts hurts taxpayers, workers, and public safety. Criminalization: People of color targeted, keeping racial wealth divide in place. 9
Percentage of the Workforce in a Union, 1930-2015 Anti-union policies weaken the power & voice of workers. 35% 30% 25% 20% 15% 10% 5% 1937: Wagner Act 1936: Sit-Down Strike in Flint, MI 1947: Taft-Hartley Act Manufacturing Declines in U.S. 1981: Reagan Breaks PATCO Right-to-work rules Expand to 25 states 2015: 11.1% Unionized 0% 1930 1940 1950 1960 1970 1980 1990 2000 2010 Source: Bureau of Labor Statistics 10
Free Trade Treaties Help Corporations, Not Workers or Communities The aim of treaties such as NAFTA is to reduce barriers to trade. The worldwide result: Jobs shifted to low-wage countries Lower wages and living standards Weakened worker rights Environmental damage New trade & investment agreements, such as the Trans-Pacific Partnership (TPP)... permit foreign corporations operating in the U.S. to ignore U.S. laws that protect the environment and workers rights; threaten laws that protect community lending, health and safety, pay equity, pro-human rights government purchasing rules, public control of water & education, etc. Weakened economies in developing nations Cuts in social safety nets Rise in poverty FOR SALE 11
90% Federal Tax Rates for the Top 1% and the Median Family 1947-2014 Big tax breaks for the wealthy - No tax relief for working families 91% 80% 70% Top 1% 70% 60% 50% 50% 40% 40% 35% 39.6% 30% Median Family 31% 20% 10% 22% 19% 25% 28% 25% 0% 1947 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2014 Source: Tax Foundation <http://www.taxfoundation.org/files/federalindividualratehistory-200901021.pdf>. Note: In 2013, the Bush tax cuts were made permanent for all taxpayers except individuals earning $400,000 or more and families earning $450,000 or more. 12
80% 70% 60% 50% 40% Percent of Federal Tax Collections from Individuals & Corporations Taxes have shifted from corporations to individuals. 77% 80% 84% 87% 87% 81% 30% 20% 10% 21% 17% 12% 9% 10% 11% 0% 1962 1970 1980 1990 2000 Corporations Individuals 2015 Source: Congressional Budget Office, Revenues by Major Source, 1962 to 2004. For 2013: Center for Budget & Policy Priorities <http://www.cbpp.org/cms/?fa=view&id=3822>. 13
The Minimum Wage and the Living Wage, 1968-2015 The federal minimum wage does not keep pace with the rising cost of living. $11.00 $10.00 $9.00 $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0 Minimum Wage $1.60 Living Wage $1.71 94% of the living wage 1968 Minimum Wage $2.90 Living Wage $3.56 81% of the living wage 1979 Minimum Wage $7.25 Sources: Living wage is calculated by dividing that year s poverty threshhold for a family of four by 2080 hours (52 weeks x 40 hours). Poverty threshholds for 1968 and 1979 from U.S. Census Bureau, Historical Poverty Tables, Table 1. Poverty threshholds for 2015 from the U.S. Census Bureau, Poverty thresholds by Size of Family and Number of Children. Living Wage $11.60 63% of the living wage 2015 14
Privatizing Public Services Helps Investors, Hurts Consumers and Workers BAD IDEAS 15
1,600,000 U.S. State and Federal Prison Population, 1925-2014 Incarceration has increased substantially... 1,400,000 1,508, 636 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 1925 1932 1942 1950 1958 1966 1974 1982 1990 1998 2006 2014 Source: The Sentencing Project. Fact Sheet: Trends in U.S. Corrections < http://sentencingproject.org/wp-content/uploads/2016/01/trends-in-us-corrections.pdf> 16
U.S. Incarceration Rates by Race, 2010 2,306 2000 People of Color are 26% of the U.S. population yet are roughly 60% of those in prison! 1000 895 831 450 0 American Indian/ Alaskan Native African American Latino White Number of people incarcerated per 100,000 Sources: Prison Policy Initiative calculated from the Bureau of Justice Statistics. 17
Deportations from the U.S., 1900-2013 Thousands 419.3 400 350 387.2 368.6 300 250 246.4 200 188.4 150 100 50 0 4.6 14.5 12.2 7.2 18.0 30.0 50.9 1900 1920 1940 1960 1980 1990 1995 2000 2005 2010 2012 2013 Source: Department of Homeland Security 18
Boosts on the Escalator to the Middle Class Home Mortgage Interest Deduction G.I. Bill: Free College FHA Loans Social Security Homesteading Laws 19
Blocks on the Escalator to the Middle Class Predatory Lending Home Mortgage Redlining Interest Deduction Immigration Quotas G.I. Bill: Free College Racist Images FHA Loans Bracero Program Social Security Jim Crow Laws Homesteading Laws Slavery Loss of Land 20
Our Theory of Change: Social Movements 21
Principles of a Fair Economy H Equity in all dimensions (race, class, ethnicity, gender, etc.) H Solidarity and Cooperation H Political & Economic Democracy H Sustainability H Pluralism and Diversity H Accountability H Respect & Dignity for People and Planet 22