The income gap: an American nightmare

Regarding the June 19 front-page story “Income gap widens as executives prosper”:

The most convincing evidence of the worsening of U.S. income distribution comes from the historical evolution of the minimum wage, the main source of earning for the poorest of the poor.

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The minimum wage in 1970 was $1.60 per hour. This was increased in steps to $7.25 today. Adjusted for the inflation rate, the minimum wage in real terms in 2010 was just four-fifths of the level in 1970, down 20 percent. Over the same period, U.S. real gross domestic product increased three-fold and also doubled in per capita terms.

If the increase in minimum wage had followed the trend in overall income growth, minimum wage should have more than just kept pace with inflation — it would have doubled in real terms. Adjusted for inflation and real per capita income growth, the hourly minimum wage would now be $18 an hour, or about 2¹ / ₂ times what it is now.

Sukhdev Shah, Alexandria

The writer retired from the International Monetary Fund as a senior economist in 2002.

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 The article on America’s income gap illuminates our unprecedented inequality. In fact, we hardly have a middle class: The average household income for 90 percent of America is $31,244. The bulk of our growth over the past 30 years has gone to the top 0.01 percent of America’s population, which makes an average of $27 million per household.

We can defend the American dream and ensure fairness for working-class families — which is why I worked with my Congressional Progressive Caucus colleagues this year to develop a “People’s Budget” that puts America to work building a competitive economy, invests in our schools, protects Social Security and represents a fair deal for working families.

Since America has stacked the deck against working people, our budget, in response, made the tax code fair and asked the wealthiest individuals, corporations hiding money overseas, oil companies raking in record profits and Wall Street banks that gambled away our money to pay their fair share.

Michael Honda, Washington

The writer, a Democrat from California, is a member of the House of Representatives.

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 The front-page article on America’s income gap contained figures that could be used to show that, if the federal government took all the income above $250,000 of the top 0.1 percent of the population, this would remove barely half the federal deficit, which is about $1.4 trillion.

Taking all the income of the top 0.5 percent would do the job, but it is instructive that if all income were capped at $250,000, with the remainder going to the federal government, the amount taken in would be only a little more than twice the current annual deficit. This is an indication of just how overblown the federal budget has become and how unlikely it is that even a policy of income confiscation would appease the government’s appetite if it’s allowed to increase.

Dean C. Kaul, Park City, Utah