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American Inequality
CEO vs. worker pay

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April 2, 2010

In his closing essay for the April 2, 2010 JOURNAL, Bill Moyers references several works on inequality in America. Among these is THE SPIRIT LEVEL: WHY GREATER EQUALITY MAKES SOCIETIES STRONGER by Richard Wilkinson and Kate Pickett, who together have spent more than 50 years studying how inequality affects the health of a population.

Bill Moyers talked to them about their work.

RICHARD WILKINSON: Well, what we've discovered is health is just one of many issues which are worse in more unequal societies, including violence or teenage births and all sorts of other problems. These are not just a little bit worse in more unequal societies, but are much worse.

Also among their findings:
  • The most unequal countries have more homicide, more obesity, more mental illness, more teen pregnancy, more high-school dropouts, and more people in prison.
  • The more equal the society, the longer its people live.
  • The United States has the greatest inequality of income of any developed country except Singapore.
>Read the complete interview

Ameican Equality and Inequality

The authors of THE SPIRIT LEVEL are not the first to note the powerful ramifications the loss of equality has had on American society and self-image. In THE AMERICAN DREAM VS. THE GOSPEL OF WEALTH, the economist Norton Garfinkle writes that Abraham Lincoln believed this country's defining characteristic was economic opportunity, that through hard work, over the course of a lifetime, every American — including freed slaves — could achieve a decent standard of living.

In Garfinkle's words, "America was the first nation on earth to offer this opportunity of economic advancement to all, even to the humblest beginner, and this was what made the nation unique and worth preserving. Ultimately, it was the largest reason for Lincoln's willingness to fight the Civil War."

Read more from THE AMERICAN DREAM VS. THE GOSPEL OF WEALTH

The BBC reported startling economic inequality figures in a 2008 documentary: the top 200 wealthiest people in the world control more wealth than the bottom 4 billion. But what is more striking to many is a close look at the economic inequality in the homeland of the "American Dream." The United States is one of the most economically stratified societies in the western world. As THE WALL STREET JOURNAL reported, a 2008 study found that the top .01% — or 14,000 American families — hold 22.2% of wealth. The bottom 90%, or over 133 million families, control just 4% of the nation's wealth.

Additional studies narrow the focus. This from the Pew Foundation and THE NEW YORK TIMES: "The chance that children of the poor or middle class will climb up the income ladder, has not changed significantly over the last three decades." This from THE ECONOMIST'S special report, "Inequality in America:" "The fruits of productivity gains have been skewed towards the highest earners, and towards companies, whose profits have reached record levels as a share of GDP."

Get additional information on inequality in America from the links below

Related Media:
Medical practitionersJames K. Galbraith
Economic recovery in review. The Dow's up, but why are Main Street Americans still reeling from last year's economic collapse? With Americans still facing rising unemployment, foreclosures, and declining property values, renowned economist James K. Galbraith on whether we've averted another crisis and how to get help for the middle class. (October 30, 2009)

Special Feature: Banks and the Bailout
View our complete coverage of the banking and bailout crisis from early warning from THE NEW YORK TIMES' Gretchen Morgenson in 2007 to date.

Special Feature: The JOURNAL on Working America
View a collection of JOURNAL reports on the effect of the downturn on the homefront.



Payday for CEOS
Overpaid Airline Execs? While high-flying executives from the nation's top airlines get big compensation, workers and retirees are seeing cuts. (June 8, 2007)

Medical practitionersBarbara Ehrenreich
Bill Moyers talks with author Barbara Ehrenreich about inequality in America.


Bill T. Jones
At the close of Lincoln's bicentennial year, Bill Moyers Journal takes a unique look at the 16th President. Moyers speaks with critically acclaimed choreographer Bill T. Jones about his creative process, his insights into Lincoln, and how dance can give us fresh perspective on America's most-studied president. (February 12, 2010)

Medical practitionersThe JOURNAL on History
Explore American history, from the long tradition of dissent to Lincoln's life in pop culture.


Katherine Newman, photo by Robin HollandLincoln's Legend & Legacy
Assassinated on Good Friday, Abraham Lincoln was transformed from man to martyr and myth. In this special performance edition of Bill Moyers Journal acclaimed actor Sam Waterston and historian Harold Holzer explore Lincoln's legacy and legend in poetry and prose by great American writers across the decades who have wrestled to define the true Lincoln through the lens of their own times.(April 10, 2009)

References and Reading:
Additional Reading

"Executive Excess," For fourteen years, in conjunction with the Institute for Policy Studies, UFE has published an annual report – Executive Excess – comparing the pay of top CEOs to average workers. (PDF)

"CMD Releases Bailout Tally, $4.6 Trillion in Federal Funds Disbursed," The Real Economy Project of the non-profit Center for Media And Democracy reports that federal agencies poured out a total of $4.6 trillion dollars to keep the banks and wall street from meltdown.

"Pay of Hedge Fund Managers Roared Back Last Year," THE NEW YORK TIMES, March 31, 2010
"Top hedge fund managers rode the 2009 stock market rally to record gains, with the highest-paid 25 earning a collective $25.3 billion, according to the survey, beating the old 2007 high by a wide margin."

""The World's Billionaires"," THE NEW YORK TIMES, March 31, 2010
"top hedge fund managers rode the 2009 stock market rally to record gains, with the highest-paid 25 earning a collective $25.3 billion, according to the survey, beating the old 2007 high by a wide margin."

Golden Handshakes," THE ECONOMIST, January 4, 2007
ECONOMIST article on the ratio of CEO to worker pay and efforts at shareholder reform.

"Nothing succeeds like excess," FINANCIAL TIMES, April 10, 2007
Column from THE FINANCIAL TIMES on a recent study of the pay of members of the Business Roundtable.

"Transparency exposes CEO to gaze of green-eyed investors," Richard Beales, FINANCIAL TIMES, April 28, 2007
Assessment from the FINANCIAL TIMES on the salaries of CEOs to hedge fund managers.

"Why Has C.E.O. Pay Increased So Much?,"
A blog frequented by economists discusses a 2006 study by economists Xavier Gabaix of the Massachusetts Institute of Technology and Augustin Landier of the Stern School of Business at New York University which suggested that the higher salaries for chief executives can largely be explained by increases in the value of the stock market. "Viewed as a whole, these salaries are a result of competitive pressures rather than the exploitation of shareholders."

"Inequality in America: The rich, the poor and the growing gap between them," THE ECONOMIST, June 15, 2006
"After 2000 most people lost ground, but, by many measures, those in the middle of the skills and education ladder have been hit relatively harder than those at the bottom. People who had some college experience, but no degree, fared worse than high-school dropouts."

"Higher Education Gap May Slow Economic Mobility,"
Erik Eckholm, THE NEW YORK TIMES, February 20, 2008
"The chance that children of the poor or middle class will climb up the income ladder, has not changed significantly over the last three decades."

"Middle Class Under Siege,"
COLUMBIA JOURNALISM REVIEW, Dean Starkman, June 11, 2008.
Among the statistical studies reviewed is one published in THE WALL STREET JOURNAL, which found that the top .01% or 14,000 American families hold 22.2% of wealth — the bottom 90%, or over 133 million families, just 4% of the nation's wealth.

"The Rich Get Richer," AMERICAN CONSERVATIVE MAGAZINE, James Kurth, 2006
"According to the Congressional Budget Office, from 1979 to 2001, the after-tax income of the top 1 percent of U.S. households soared 139 percent, while the income of the middle fifth rose only 17 percent and the income of the poorest fifth climbed just 9 percent. Last year American CEOs earned 262 times the average wage of their workers—up tenfold from 1970."

"Poor Prospects," THE ECONOMIST, Oct. 7, 2004.
"Over the past 30 years, most of the increase in America's wealth has accrued to those who need it least. In 2003 the top 5% of households took 21.4% of the income, up from 16.6% in 1973. A survey for Time/CNN in 2000 showed that 19% of Americans believed they were in the top 1% of earners."

Demos: Economic Opportunity Program
The Economic Opportunity Program addresses the economic insecurity and inequality that characterize American society today. We offer fresh analysis and bold policy ideas to provide new opportunities for low-income individuals, young adults and financially-strapped families to achieve economic security.

Additional Statistics
Also This Week:
BRYAN STEVENSON AND MICHELLE ALEXANDER
In the months before his death, Dr. Martin Luther King Jr. had expanded his focus on racial justice to include reducing economic inequality. On this week's 42nd anniversary of King's assassination, Bill Moyers sits down with attorneys Bryan Stevenson and Michelle Alexander to discuss how far we've really come as a country, how poor and working class Americans have been falling behind and what America must do to fulfill Dr. King's vision.

REFLECTIONS ON KING'S DREAMS
Revisit Dr. King's evolving theories of social and economic justice through his speeches. Plus, a Bill Moyers essay.

PRISON NATION
The U.S. has five percent of the world's population and 25 percent of the world's prisoners -- how did we get here?

AMERICAN INEQUALITY
Another study, THE SPIRIT LEVEL by Richard Wilkinson and Kate Pickett, shows that the US has the greatest income inequality among the major developed countries. Get the stats and read an interview with the authors.
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