Socialism for Today: Introduction (+ extra statistics)

Explain how pay has declined in the United States since the 1970s.

• Stagnation of the real wage: during the 1970s, the “real wage” (the purchasing power of the average pay of workers) stagnated, declining for the next fifteen years through the early 1990s.

  • By 1993, the real wage had fallen 16.3% below its 1972 peak

  • It did not reach the 1972 level until 2019 — 47 years later.

Elaborate on rising income inequality since the 1970s.

Although the economy has generated more goods and services since the 1970s, most people didn’t get a share of that increase.

• 1979-2019:

  • Income of bottom 80% of families fell from 59-50%

    • Share of top 5% income rose from 15%-22%

    • Share of top 1% income rose from 10.9%-19.1%

    • CEO pay in large corporation vs. average worker pay: 20 to 1 (1965) to 366 to 1 (2020)

• 35% of American families with TWO full-time workers do not earn enough income to cover basic needs (housing, food, medical care, transport, childcare, minimal household expenses)

  • 52% for Black families

  • 59% for Hispanic families

  • 44% for immigrants

Explain the economic insecurity of being a college teacher in the United States today in one statistic.

About 75% of college teachers in the U.S. today have temporary or part-time positions providing little to no job security, up from about half in 1987

What has been the biggest consequence of rising housing prices for U.S. households?

Many households have had to spend more than the recommended maximum of 30% of their income on housing.

• Some have devoted more than 50% of their income to housing.

Explain some of the major disadvantages of a for-profit healthcare system.

• Despite the expansion of government healthcare problems, in 2022, 24 million people remained uninsured.

• Benefits denial specialists: health insurance companies employ people whose job is to find a way to avoid paying for the person’s treatment

  • Even those with health insurance can find out too late that their insurance policy excludes treatments that are necessary and costly

Explain the skyrocketing cost of education in the United States.

• From 1980-2021, the cost of higher education tripled (rising FASTER THAN INFLATION), going from $8K in a four-year public college to $23K

  • From state funds to student debt: previously, the cost of a public college education was financed primarily out of state funds. But over time students have had to finance it largely themselves, leading to mushrooming student debt

Explain the rise in racial inequality after 1980

• Increased public sector jobs for POC: Due in part to the advances of the Civil Rights Movement, many Black women began obtaining good public sector jobs, while Black men got well-paying jobs in the public sector AND industry.

  • However, the:

    • Cutting back of public sector employment

    • Movement of industry out of industrial cities…

      • …disproportionately affected Black workers

• Decrease of employment/public sector — prison pipeline: In the 2000s, employment in manufacturing declined sharply while industrial/public sector jobs shrank. As a result, imprisonment replaced employment for growing numbers of Black people.

What does data say about the inequality in distribution of wealth in the United States (the 1% over everyone else) and who provided the data?

The top 10% of wealthy Americans control more than 60% of the nation’s wealth, while the bottom 50% holds only 2% of total wealth.

• This data is from the Congressional Budget Office (2024) and the World Inequality Database (2025)

What does the data say about the ever-increasing wage gap between the rich and the rest of us in the United States? Who concluded that information?

Since 1979, wages of the top 1% have increased by 206%, while the wages of the bottom 90% have increased only by 29%

• Gould and Kandra, 2021

Summarize the data about how 144 million households are poorer than they should be in the United States and state who concluded that data.

If postwar income distributions continued, the total annual income of the bottom 90% would have been $2.5 trillion higher in 2018 alone.

• It would be enough to pay everyone in that range an additional $1,144 per month

  • Price & Edwards, 2020

Explain how excessive unemployment in the United States led to our inequality crisis.

• Fed skyrockets unemployment: Starting from the 1970s, the Federal Reserve made unemployment higher than needed to curb inflation.

  • To do so, they raised interest rates and pressured unions into accepting lower wages.

  • Had unemployment stayed at its natural rate, median wages would be 10% higher today.

Explain how corporate-driven globalization led to the current inequality crisis in the United States.

• This resulted from policy choices, largely influenced by multinational corporations, that included:

  • Offshoring labor to countries where workers are paid far less.

  • This cut non-college-educated workers’ wages and job security

  • It protected the accumulated profits of business managers

Explain which corporate structure shifts and weaker labor standards led to the current inequality crisis in the United States.

• Deregulation and privatization of industry

• Stagnant minimum wage

• Eroded overtime protections for salaried workers

• Deregulated wage theft by employers

Explain statistics related to the increase in personal wealth. What does it conclude?

• 88% of increase in personal wealth went to the top 10% from 1983-2016

  • NONE went to the bottom 80%.

• This is very similar if you’re looking at the growth in personal income:

  • 88% of increases in income since 1982 went to the top 10%, while the bottom 80% only got 8% of the total.

How did the 2008 financial crisis happen? Explain in detail.

1. The housing boom: in the early 2000s, housing prices rose rapidly due to factors including:

   1. Low interest rates

   2. Easy access to credit (ability of someone to obtain goods or services before payment, with an agreement to pay later)

   3. Banks offering many new types of mortgage loans to borrowers, including those with poor credit (subprime borrowers)

   4. Investors buying mortgage-backed securities (financial products made from home loans [sums of money borrowed and expected to be paid with interest] bundled together) because they believed that the housing prices would keep rising.

2. Risky lending/borrowing & financial securitization: banks relaxed their lending standards which made it easier for people to get mortgages; financial institutions packaged these risky mortgages into securities (tradable financial assets) sold to investors worldwide.

   1. This process (securitization) spread the risk across investors and institutions

3. The housing bubble bursts: starting around 2006 —

   1. Housing prices stopped increasing and started falling.

   2. Mortgage rates increased leading to defaults (many homeowners couldn’t pay their mortgages anymore) which led to the value of mortgage-backed securities to plummet because they were tied to those risky loans.

4. The collapse of the financial market: many financial institutions held large amounts of these devaluing securities, so their balance sheets (financial statements that provide snapshots of a company’s assets & liabilities) worsened. Banks and other lenders faced huge losses, and some (like Lehman Brothers) went bankrupt.

5. Widespread panic and credit freeze: Lending froze because institutions became scared of each other’s financial health, which made it hard for companies and consumers to borrow money. This led to a severe economic downturn.