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US 1% Will Control 70% of Wealth By 2021

It's Our Economy - June 24, 2017 - 12:00pm
Above Photo: America’s oligarchs are set to maintain their grip on the majority of the country’s wealth, with a new study claiming that they will control 70 percent of national wealth by 2021. (AP/Vadim Ghirda) A new study by the Boston Consulting Group has found that while wealth inequality is growing on a global scale, it has kicked into overdrive in the United States – where America’s 1% are expected to control 70 percent of the nation’s private wealth by the year 2021. America’s rich just won’t quit getting richer, according to a new study released in mid-June by the Boston Consulting Group (BCG), a global management consulting firm. The study, which seeks to analyze the global wealth management industry, as well as the evolution of private wealth, uncovered some startling statistics that suggest that global financial inequality will grow significantly by the year 2021. The firm found that the already massive gap between the world’s wealthy elite – the approximately 18 million households that hold at least than $1 million in assets – and everyone else is continuing to widen at a remarkable rate. The estimated 70 million people who make up these households were found to control 45 percent of the world’s $166.5 trillion in wealth. And in just four more years, it is estimated that they will control more than half of the world’s wealth, despite representing less than 1 percent of the world’s current population. However, while rising inequality is a global phenomenon, it is especially pronounced in the United States. While wealth inequality in the U.S. is by no means an unknown phenomenon, the U.S. is significantly more unequal than most other countries, with the nation’s elite currently holding 63 percent of the private wealth. The U.S. elite’s share of national wealth is also growing much faster than the global average, with millionaires and billionaires expected to control an estimated 70 percent of the nation’s wealth by 2021. The U.S.’ high wealth inequality largely owes to post-World War II government policies that have seenalmost a quarter of all national income go to its wealthiest residents. Meanwhile, wages for the majority of Americans have remained stagnant for decades – in contrast to the richest Americans, their future economic outlook is incredibly bleak by comparison. The U.S. is also home to more billionaires and millionaires than anywhere else in the world, which partly explains how U.S. policy has come to favor them over the years. According to Bloomberg, two out of five millionaires and billionaires live in the United States – and their ranks are growing.   While the world’s richest citizens may be pleased by the results of BCG’s recent study, there is plenty for them to be worried about if history is any indicator. Indeed, history shows that societies with drastic wealth inequality are much more unstable and more likely to experience drastic economic failure or outright societal collapse. For instance, a 2014 study conducted by the National Socio-Environmental Synthesis Center noted that over-consumption and wealth inequality have occurred in the collapse of every civilization over the last 5,000 years. That same study also warned that rising inequality could easily lead to an unsustainable use of resources and the “irreversible collapse” of global industrial civilization. This warning seems particularly prescient, given that wealth inequality in the U.S. is well above that of past civilizations that eventually collapsed as a result of these factors. For example, at the time of the collapse of the Roman Empire, the top 1 percent of the Roman elite controlled just 16 percent of the society’s wealth, a measly figure compared to the percentage commanded by the 1-percenters of the U.S. While the BCG study paints a rosy picture for the world’s millionaires and billionaires, particularly in the United States, they should be gravely concerned that their growing accumulation of wealth could have drastic consequences – not just for those poorer than them, but for everyone.
Categories: Friends of GEO, SE News

Are Robots Keeping Wages Low?

It's Our Economy - June 22, 2017 - 7:01am
Above Photo: In this Aug. 21, 2015 photo, a man works amid orange robot arms at Rapoo Technology factory in southern Chinese industrial boomtown of Shenzhen. AP Photo/Vincent Yu It used to be the case that when employers had trouble hiring, wages would increase in places with low jobless rates. Then came the rise of machines. These days, employees aren’t being paid much more than they were in the past, a BMO economist said in a report released on Friday In a report titled “Wage Against the Machine,” economist Sal Guatieri looked at the effects of robots and automation on wages using data from the U.S. and the OECD. Hourly compensation per hour in the U.S. grew “smartly” in 2015, he wrote, but since then it has “barely kept pace with inflation.” Colorado and North Dakota, he noted, have “some of the lowest jobless rates and slowest wage gains in the country.” Wages could still grow, Guatieri said. But he went on to say that the national jobless rate only hit 4.3 per cent or less twice in the last 50 years: first, between 1965 and 1970, and second, between 1999 and 2001. The cost of labour went up in both of these periods. But now, “new automation is working its way up and down the skills’ chain,” and threatening more jobs than it used to. Previously, robots threatened jobs in industries such as manufacturing, transportation, office support and retail. Now, they’re inching into tasks that involve thinking. Artificial intelligence, he said, can analyze big data and write analytical reports – a skill that’s key in areas such as financial planning, economics and journalism. In this May 14, 2015 photo, Kuka robots work on Tesla Model S cars in the Tesla factory in Fremont, Calif.AP Photo/Jeff Chiu And it may not be long before it costs less to have a machine do certain jobs than it would to pay a worker. A 2015 report titled “The Robotics Revolution” by the Boston Consulting Group (BCG) pegged the hourly cost of a “generic” robotics system in manufacturing at around $28 per hour at the time. By 2020, just three years from now, that cost could fall to around $20 per hour, which is “below the average human worker’s wage,” the report said. READ MORE: Here are the Canadian towns and cities that could lose the most jobs to robots There are, of course, other factors that could be keeping wages from growing — some industries that aren’t as technology-intensive are also seeing modest pay increases. But “the adverse impact on wages could increase as more tasks are automated,” and labour shortages might “encourage U.S. companies to invest more in technology,” Guatieri wrote. What the OECD says The report came two days after the OECD released its 2017 Employment Outlook. The organization showed that the middle-skilled share of employment in all represented countries fell by 9.5 percentage points between 1995 and 2015, a trend that has been driven by technological changes, it said. This chart shows job polarization in OECD countries – meaning the change in shares of employment from 1995 to 2015.OECD It’s a trend that has led to increasing job polarization, or a larger gulf between middle-skilled, low-skilled and high-skilled occupations. As middle-skilled jobs have fallen, high-skilled jobs grew by 7.6 percentage points and low-skilled positions grew by 1.9 percentage points in the same time frame. The polarization is happening because jobs have shifted from manufacturing to service positions, a trend that has seen employees forced to take on lower-paying work. Canada lost middle-skilled jobs at a slower pace than the OECD average between 1995 and 2015; the only countries where it happened slower were the Czech Republic, Hungary, Japan and the Slovak Republic. Nevertheless, the quality of employment in Canada has been dropping as job growth has been concentrated in the service sector, according to some analysts.
Categories: Friends of GEO, SE News

Companies Can Either Make Things Or Make CEOs Rich

It's Our Economy - June 22, 2017 - 7:00am
Above Photo: Funny Solution Studio / Shutterstock Making breakthroughs for consumers is hard, companies have found. But making fortunes for CEOs is easy. Jeff Immelt, the CEO of General Electric since 2001, is retiring. The 61-year-old will be making a well-compensated exit. Fortune magazine estimates that Immelt will walk off with nearly $211 million, on top of his regular annual pay. Immelt’s annual pay hasn’t been too shabby either. He pulled down $21.3 million last year, after $37.25 million in 2014. But Immelt’s millions don’t come close to matching the haul that his predecessor Jack Welch collected. Welch’s annual compensation topped $144 million in 2000. He stepped down the next year with a retirement package valued at $417 million. What did Immelt and Welch actually do to merit their super-sized rewards? What did they add to a GE hall of fame that already included breakthroughs like the first high-altitude jet engine (1949) and the first laser lights (1962)? In simple truth, not much at all. “We bring good things to life,” the GE ad slogan used to proudly pronounce. Not lately. And not surprisingly either. Mature business enterprises, we’ve learned over recent decades, either make breakthroughs for consumers or grand fortunes for their top execs. They don’t do both. Why not? Making breakthroughs, for starters, takes time. Enterprises have to invest in research, training, and nurturing high-performance teams. Years can go by before any of these investments bear fruit. By that time, the executives who made the original investments might not even be around. Grand fortunes, by contrast, can come quick. CEOs can downsize here, cut a merger there, then sit back and watch short-term quarterly earnings — and the value of their stock options — soar. If those don’t do the trick, CEOs can always just slash worker pensions or R&D and put the resulting “savings” into dividends and “buybacks,” two slick corporate maneuvers that jack up company share prices and inflate executive paychecks. On any CEO slickness scale, Jack Welch would have to rank right near the top. In 1981, his first year as the GE chief, Welch quickly realized he was never going to get fabulously rich making toasters and irons. So Welch started selling off GE’s manufacturing assets. In his first two years, analyst Jeff Madrick notes, Welch “gutted or sold” businesses that employed 20 percent of GE’s workforce. By 2000, Welch himself was making about 3,500 times the income of a typical American family. By contrast, in 1975, Welch’s predecessor took home merely 36 times that year’s typical American family. As Welch’s successor, Jeffrey Immelt would give an apology of sorts in a 2009 address at West Point. Corporate America, he told the corps of cadets, had wrongfully “tilted toward the quicker profits of financial services” at the expense of manufacturing and R&D, leaving America’s poorest 25 percent “poorer than they were 25 years ago.” “Rewards became perverted,” Immelt went on. “The richest people made the most mistakes with the least accountability.” Unfortunately, and sadly, Immelt never took his own analysis to heart. As a rich CEO in his own right, he continued to make mistakes and suffer no particular consequences. One example: After the Great Recession, Immelt froze the GE worker pension system and offered workers a riskier, less generous 401(k). Within five years, notes the Institute for Policy Studies, the GE pension deficit widened from $18 billion to $23 billion — even as Immelt’s personal GE retirement assets were nearly doubling to $92 million. “If we want to slow — or better yet, reverse — accelerating income inequality,” the Harvard business historian Nancy Koehn noted a few years ago, “the most powerful lever we have to pull is that of outrageous executive compensation.” How many more outrageously compensated executives will retire off into lush sunsets, the Jeff Immelt story virtually begs us to ask, before we start yanking that lever? – See more at:
Categories: Friends of GEO, SE News

Move Your Money To The New Economy

It's Our Economy - June 22, 2017 - 7:00am
Above Photo: From In recent years we’ve seen enormous energy from movements working to divest the money of individuals, institutions, municipalities, pension, funds, and more out of the extractive economy of Wall St. banks, private prison corporations, and the fossil fuel industry, and reinvest those funds into the New Economy. NEC believes in divestment and reinvestment as powerful strategies for change and offers the following guide as a starting point in thinking about moving funds to support an economy that puts people and planet first. Banking Alternatives: Unlike Wall St. banks, which work to maximize profits for shareholders at the expense of communities and the environment, Community Development Credit Unions, as well as many other progressive credit unions, CDFIs, and community banks, offer a local alternative rooted in the well-being of their communities. Here are some places to learn more about values-aligned banking alternatives. Invest In the New Economy: Within NEC’s membership there are dozens of amazing organizations that can help you put your savings or investments to use in building the New Economy. Here are just a few. Reinvest in Our Power: Reinvest In Our Power is an emerging national network of reinvestment campaigns and grassroots organizations, that are working together to freeze dirty investments, move the money, and resource community-led solutions at the frontlines. Through a financial cooperative of regional loan funds, governed by the grassroots organizations, this project shifts both capital and decision-making out of corporate control, and puts it in service of people and the planet. Sachie, NEC staff organizer, serves as project coordinator for the network. Anchor organizations include The Working World, The Climate Justice Alliance, Movement Generation: Justice and Ecology Project, The Fund for Democratic Communities, and New Economy Coalition. Public Banking: Did you know that most government agencies, States, and municipalities invest their funds with Wall St. banks? Yuck! Luckily there’s a growing movement to create state and city-owned banks that put public funds to use in service of the public good. Two NEC members who have been leading the charge on public banking are CommonomicsUSA and the Public Banking Institute. Join The Movement: There is a long history of social movements using divestment campaigns as a strategy to undermine extractive and violent industries, when other pathways to change have been blocked. From South African apartheid, to present-day fights against prisons and pipelines, withdrawing money is a potent political tactic to build our movements for justice. Here are some of the organizations who are using divestment-reinvestment as a tool for transformative change.
Categories: Friends of GEO, SE News

Danish Energy Cooperative Lets Consumers Collectively Build Wind Turbines

Shareable - Commons - June 21, 2017 - 7:54pm

The establishment of a carbon-neutral energy system requires massive investments in infrastructure such as wind turbines. Because distributed energy systems do not fit the business models of the old energy utilities, they continue to invest far too little in this sector. Meanwhile, many individual electric power consumers are interested in investing in renewable power infrastructure, but these investments are too large and require a level of expertise too advanced for individual households to be able to support them. How can consumers take matters into their own hands?

Categories: Friends of GEO

How Residents of Hamburg Reclaimed the Power Grid

Shareable - Commons - June 21, 2017 - 3:00pm

From 2000 to 2014, the energy infrastructure of the city of Hamburg was mainly in the hands of private energy monopolies such as Vattenfall and E.On that controlled most of Germany's electric power infrastructure. These companies had a strong interest in utilizing their coal and nuclear power plants as long as possible, thereby obstructing a shift to renewable energy. Moreover, they were reluctant to provide equal access to small power providers and invest in a smart grid that allows more effective management of variable, distributed power inputs.

Categories: Friends of GEO

Involve Everyone In Production: Basic Principle Of The Economy In Rojava

It's Our Economy - June 21, 2017 - 7:00am
Above Photo: From in Rojava and Bakur This is an academic article translated from Abrstrakt Magazine, where it first appeared in Turkish on 5th October, 2016. The basic principle of the economic policies of the Assad regime in Rojava was to keep the people poor and deprived in order to maintain their dependence. The Jazira [Cizîrê? / Cezîre] and Kobanî [Kobanê] cantons served as the breadbasket of Syria. Before the revolution, forty percent of the wheat consumed in the country came from Rojava, and agriculture is still people’s primary source of income. From Derik [Dêrik / Al-Malikiyah] to the east of the Jazira Canton, to Serekaniye [Serê Kaniyê / Ras al-Ayn] in the west, fields stretch alongside the roads, along with the sources of petroleum in the Rmelan [Rumelan / Ramelan / Rimelan] region. Before the revolution, sixty percent of the petrol used in Syria came from the Jazira region. Rojava is a region left impoverished despite its riches. The first town I saw in the lands of the region was Afrin [Afrîn / Efrîn?]. The cantons had not yet been established when I visited in September, 2013. When I arrived at the city bus terminal after crossing the border from Kilis with smugglers, I stood and simply looked around for a while. I was struck by the level of poverty and deprivation. Not only in Afrin, but also in the towns of the Jazira Canton where I stayed for a long time, I felt as if I was watching an old movie. The flimsy houses and shops that lined the streets and avenues were far from modern. The Economic Academy of Rojava is the central institution for economic life in the autonomous enclave. The board members of the academy describe the politics of the Assad regime like this: “The Syrian regime saw the resources of Rojava as its warehouse. Wheat was cultivated here and purchased by the state, which then had them processed in a different region and only then sold to the people. No factories or workshops that would enable the processing of the agricultural goods that grow in the Jazira Canton were allowed. This is the basis of poverty and deprivation on which the Rojava Revolution sought to establish an economy. Of course, these were not just results of the economic policies of the Assad regime. It is also necessary to consider the war that has ensued since the first day of the revolution. According to regime sources, seventy percent of the budget is reserved for defence. A third factor is the embargo. The border is closed between Rojava and Turkey. Only the entry point at Nusaybin has been intermittently opened for humanitarian aid. The border to the autonomous region of Iraqi Kurdistan near the town Semalka is only sporadically opened for a very short time and then closed down for months because of the politics of the KDP (the Kurdish Democratic Party) of Iraqi Kurdistan, which opposes the Rojava revolution. The economy of Rojava is geared towards providing for the poorest and those without possessions. Its basic principle is the participation of everyone in production. In the words of a minister of economics: “If a single loaf of bread is manufactured in Rojava, everyone will have contributed to it.” This model is defined as the communal, or social economy. Cooperatives represent the foundation of this model. These cooperatives were built on land that was previously nationalised by the regime, which was reclaimed since the start of the revolution. This makes up 80% of the autonomous territory. In fact, the economic domain was the last one to be organised in Rojava. As the administrators of the Academy say, the provision of security for the people has inevitably been the top priority. The first step was the foundation of the Rojava Centre for Economy. Units were created in every town with the participation of engineers and economists with relevant expertise, along with other volunteers. Seed companies were set up to improve the agrarian economy and enable the villagers to carry on cultivating the soil. The administrators at the Academy describe the model they want to create: “We reject the capitalist economy, but we are not adopting the economic model of real socialism either. Ours is a communal economy based on cooperatives. We do not block private initiatives but we are following a policy that prevents the formation of monopolies. What does the constitution say? The Rojava Social Contract states: “Everyone has the right to the use and enjoyment of his private property. No one shall be deprived of his property except upon payment of just compensation, for reasons of public utility or social interest, and in the cases and according to the forms established by law.” Article 42 defines the principles of economic organisation, alluding to the the socialist principle of ‘each according to his need’ as follows: The economic system in the provinces shall be directed at providing general welfare and in particular granting funding to science and technology. It shall be aimed at guaranteeing the daily needs of people and to ensure a dignified life. Monopoly is prohibited by law. Labor rights and sustainable development are guaranteed. In summary, the means of production in Rojava, with its factories, land, forests, water and underground and above ground resources, are the property of the Democratic Autonomous Administration. The Rojava Revolution is not opposed to private property. However, the political and ideological hegemony of the communes and cooperatives, which are regarded as the political, social and economic organisation of the people, and the main power of the revolution, the poor and the dispossessed, show today that the direction of development is towards expropriation. One of the economic goals of the revolution is to prevent monopolisation. How will this be achieved? This question is one I have asked both members of the economic academy as well as officials in the ministry of economy. They have stressed that, “The goal is to found cooperatives for everybody in all areas of life and to further spread the communal economy.” The board members of the academy added: Rojava is a place in which almost no monopolisation, industrialisation or even heavy industries ever existed. There are small investments, however. We strive not to...
Categories: Friends of GEO, SE News

Podcast: Late Environmental Economist Robin Murray's Views on Creating a New Economy

Shareable - Commons - June 20, 2017 - 7:43pm

In this episode, we spoke with the late Robin Murray, a prolific sustainability and environmental economist, an advocate for a living economy, and a key player in the birth of the fair trade movement. Murray was named by The Guardian as one of the fifty people who could save the planet. He worked to establish the London Climate Change Agency with the Deputy Mayor of London, and alternated between working on innovative economic programs in local, regional, and national governments and in academia.

Categories: Friends of GEO

Seattle Mayor, 2 City Council Members Propose City Income Tax On The Rich

It's Our Economy - June 20, 2017 - 2:00pm
Above Photo: by Joe Raedle/Getty Images SEATTLE — Mayor Ed Murray and City Council members Kshama Sawant and Lisa Herbold on Monday proposed a new tax on high-income households. The proposal would place a 2 percent tax on joint filers’ income over $500,000 and single tax filers’ income over $250,000. They said the estimated $125 million in new annual revenue would allow the city to lower the burden associated with property taxes and other regressive taxes, replace federal funding potentially lost through President Donald Trump’s budget cuts and enhance public services such as housing, education and transit. Seattle income tax? “Washington state’s tax structure is the most regressive in the country, putting the burden on many of our most vulnerable residents,” Murray said. “Leaving cities with only regressive tax options puts the heaviest burden on working people, families and communities of color. By replacing a system that relies too heavily on property and sales taxes with a progressive income tax, we can ease that burden and generate revenue to invest in Seattle priorities…” Sawant said, “I ran for office four years ago on a program of a $15 per hour minimum wage, to tax the rich, and for rent control. We won $15 by building the 15 Now grassroots campaign. Now we’re on the cusp of taxing Seattle’s rich, because socialists, activists, and community organizers have tirelessly built up our movement over the years.” Herbold said, “People earning $20,000 a year devote two entire months of pay to their yearly tax bill; the 1 percent pay their annual tax bill in only six days. A tax on high incomes will give Seattle a more equitable revenue structure to fund affordable housing and services addressing homelessness, education, transit, and climate change, and it could also be dedicated to lowering other regressive taxes and replacing federal funding potentially lost to Trump budget cuts.” The Institute on Taxation and Economic Policy has found Washington state’s existing tax structure to be the most regressive in the nation, disproportionately hitting low-income households. ITEP found in 2015 that state and local taxes paid by the 20 percent of Washington families with the lowest incomes amounted to 16.8 percent of their income. In contrast, the tax burden for the 1 percent of families with the highest incomes was 2.4 percent of their income. The City Council will conduct an initial public hearing on the city income tax proposal on June 14. Final action is anticipated by mid-July.
Categories: Friends of GEO, SE News

Timeline: History of Rural Electricity Cooperatives in the US

Shareable - Commons - June 20, 2017 - 1:11pm

Most farms in the U.S. today have power, and many get their current from small, consumer-owned rural electric cooperatives. But in the 1930s, only 10 percent of these farms were connected to the electricity grid. During the New Deal era, a system of electricity cooperatives was established, and through the sharing of resources, the nation's rural communities were electrified. Within a few decades, roughly 90 percent of farms in the U.S. were connected to the electricity grid. The same grid exists today, but it is badly in need of an upgrade. 

Categories: Friends of GEO

Community Power Offers Fukushima a Brighter, Cleaner Future

Shareable - Commons - June 19, 2017 - 4:27pm

In 2011, the Great East Japan Earthquake and tsunami ravaged the Fukushima prefecture, in the Tohoku region of Japan's main island of Honshu.

Categories: Friends of GEO
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