This document discusses inequality in Maryland and around the world. It provides data showing that wealth and income are increasingly concentrated at the top, both globally and within the U.S. and Maryland. Research shows that greater inequality is associated with worse social outcomes like lower life expectancy, higher crime, and less environmental sustainability. The document argues for policies like stronger unions, higher taxes on the wealthy, and pay ratio limits between top executives and median workers to promote a more equal distribution of wealth and reduce the problems caused by growing inequality.

1. Inequality in Our Polity
Toward a more equal Maryland May 31, 2014

2. WE LIVE IN A TOP-HEAVY WORLD
68.7%
22.9%
7.7%
0.7%
3.0%
13.7%
42.3% 41.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Under $10,000 $10,000-$100,000 $100,000-$1 million Over $1 million
Share of global population and wealth, by net worth class
% global population % global wealth
Credit Suisse Research Institute, October 2013

3. WE LIVE IN THE TOP-HEAVIEST NATION
2% 2% 3% 4% 4% 5% 5% 5%
7% 8%
42%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Share of world’s adults holding over $1 million in net worth
Credit Suisse Research Institute, October 2013

4. WE LIVE IN AMERICA’S TOP-HEAVIEST STATE
7.7%
7.5%
7.3%
7.2%
6.8%
6.6%
6.5%
6.2%
6.1%
6.0%
5.8%
5.7%
0% 1% 2% 3% 4% 5% 6% 7% 8%
Maryland
New Jersey
Connecticut
Hawaii
Alaska
Virginia
New Hampshire
Delaware
DC
California
New York
Washington
Millionaire households as share of total households, 2013
Phoenix Marketing, January 2014

5. OUR MARYLAND TODAY
Potomac

6. ALSO OUR MARYLAND TODAY
Baltimore

7. NO ECONOMIC RECOVERY FOR MARYLAND’S 99%
11.10%
-1.20%-2%
0%
2%
4%
6%
8%
10%
12%
Top 1% Bottom 99%
Change in Maryland household income, 2009-2011
Economic Analysis and Research Network, February 2014
Average
income
$1,007,595
Average
income
$59,011

8. ONE COST OF OUR INEQUALITY
If Maryland’s 1968 level of
income equality still
prevailed today, the poorest
fifth of Marylanders would
be earning twice what they
currently take home.
Institute for Policy Studies, Closing the Inequality Divide, March 2013

9. OTHER COSTS WE CAN’T TALLY WITH DOLLARS
Louis Brandeis, Supreme Court, 1916-39
‘We can either have democracy in
this country or we can have great
wealth concentrated in the hands
of few. But we can't have both.’

10. BUT BRANDEIS DIDN’T KNOW THE HALF OF IT
Inequality – what we get when income and wealth
concentrate – doesn’t just endanger democracy.
Inequality endangers everything basic to social
decency.

11.  The less democratic
 The less honest
 The less trustful
 The less caring
 The less healthy
 The less vibrant economically
 The less sustainable environmentally
THE MORE UNEQUAL A SOCIETY, WE NOW KNOW . . .

12. HOW DO WE KNOW ALL THIS?
We’ve had an explosion of research on what happens
when societies grow more equal — and when they don’t.
Economists
Political scientists
Environmental scientists
Sociologists
Psychologists
Demographers

13. THE BEST EXPOSITION YET OF THIS RESEARCH
British epidemiologists
Richard Wilkinson and Kate Pickett

14. WHAT CAN EPIDEMIOLOGISTS TEACH US?
About 25 years ago, epidemiological research
began showing an amazing set of findings:
The greater the gap between a society’s top
and bottom, the worse the society’s health.
Inequality has more of an impact on health than
health care or individual health behaviors.
Epidemiologists study
the health of populations

15. IN EQUAL SOCIETIES, PEOPLE LIVE LONGER
Not just poor people, but all people!
If you have an average income in a
relatively equal society, you’re going
to live longer than a average-income
person living in an unequal society.

16. THE DATA: GREATER EQUALITY, LONGER LIVES
Source: Wilkinson and Pickett, The Spirit Level

17. ‘If you want to know why one country does better or worse than
another, the first thing to look at is the extent of inequality.’
THIS SAME DYNAMIC SHOWS UP ALL OVER
Richard Wilkinson and Kate Pickett, 2009, The Spirit Level

18. THE GAP BETWEEN THE RICHEST AND POOREST 20%

27. WHAT IF WE LOOK CLOSER TO HOME?
The same dynamics hold true for U.S.
states.

28. MORE CHILDREN DROP OUT IN UNEQUAL STATES
Wilkinson and Pickett, The Spirit
Level

29. BOTTOM LINE: IN MATURE DEVELOPED SOCIETIES. . .
. . . how much wealth a society generates matters little for our well-being.
What matters much more:
How a society distributes that wealth.

30. IN SHORT: INEQUALITY
MATTERS!

31. ESPECIALLY FOR OUR EARTH

32. GREATER INEQUALITY INCREASES
THE CULTURAL PRESSURE TO CONSUME
In a more equal society, where most
people can afford the same things,
things don’t matter so much.
But where most people can’t afford
the same things, things become
a powerful marker of social status.
In a society growing more unequal,
you either accumulate more and bigger
things or find yourself labeled a failure.
Reason #1 why inequality drives environmental degradation

33. THE INEQUALITY MANTRA: MORE, BIGGER
1,500
2,500
Square feet in 1970 Square feet in 2006
The growing size of the median American home
Number of people
in typical household:
3.14
Number of people
in typical household:
2.57

34. THE SUPER RICH STOMP OUT
A HUGE CARBON FOOTPRINT
The private jet: the badge of ultra high net worth
status
Reason #2 why inequality drives environmental
degradation

35. FLYING IN OUR UNEQUAL SKY
1,000
10,000
1970 2006
Number of private jets in
active service
1,546
8,892
Commercial jet Private jet
Lbs. CO2 per passenger

36. PRIVATE JETS THE LUXURY TIP OF THE ICEBERG
“Look at the lives of the super-rich, who set the
pace for global consumption. Are their yachts
getting smaller? Their houses? Their artworks?
Their purchase of rare woods, rare fish, rare
stone? Those with the means buy ever bigger
houses to store the growing stash of stuff they
will not live long enough to use.”
George Monbiot, May 28, 2014

37. SUSTAINABILITY DEMANDS PUBLIC SPIRITEDNESS
Reason #3 why inequality drives environmental degradation

38. MORE EQUAL NATIONS RANK AS BETTER RECYCLERS
Source: Richard Wilkinson and Kate Pickett. The Spirit Level, 2009

39. GIVEN THE REALITY OF MASSIVE INEQUALITY,
IS OUR ECOLOGICAL GOOSE COOKED?

40. HISTORY’S BAD NEWS
The Study: New NASA-funded research
examines historic impact of inequality
“on the fate of societies.”
The Finding: Under conditions “closely
reflecting the reality of the world today,”
the study finds an eventual social
collapse — think Maya in Central
America — “difficult to avoid.”
The Explanation: In deeply unequal
societies, elites don’t feel the strain and
pain from environmental degradation
— until that degradation has gone too
far to reverse.
This “buffer of wealth . . . allows elites to
continue ‘business as usual.’”

41. Kate Pickett and Richard Wilkinson
41
“It is fortunate that just when the
human species discovers that the
environment cannot absorb
further increases in emissions, we
also learn that further economic
growth in the developed world no
longer improves health, happiness,
or measures of well-being.”
THE GOOD NEWS

42. We don’t need to make more
to improve how well we live.
We need to share more.
We need to become
more equal.
THE WAY FORWARD

43. SO WHAT CAN WE DO TO BECOME MORE EQUAL?

44. STEP 1: RECOGNIZE WE CAN BECOME MORE EQUAL
0
200
400
600
800
1000
1200
1917 1922 1927 1932 1937 1942 1947 1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007 2012
Income of America’s top 0.1% as multiple of bottom 90% income, 1917-2012
Thomas Piketty/Emmanuel Saez, World Top Income Database, 2013
892 times
993 times

45. REASON TO CHEER IN MARYLAND HISTORY, TOO
26.4%
8.5%
17.0%
23.4%
9.9%
21.8%
0%
5%
10%
15%
20%
25%
30%
1928 1979 2007
Top 1% income share, United States and Maryland
USA
Maryland
Economic Policy Institute, 2013

46. STEP 2: UNDERSTAND HOW WE BECAME MORE EQUAL
UNIONS LEVEL UP THE BOTTOM HIGH TAXES LEVEL DOWN THE TOP
7.5%
28.3%
0
5
10
15
20
25
30
1930 1936 1942 1948 1954
Union members as % of employed
25%
91%
0
10
20
30
40
50
60
70
80
90
100
1925 1929 1933 1937 1941 1945 1949 1953
Top federal income tax rate

47. AMERICA NO LONGER LEVELS DOWN THE TOP
94%
70%
35%
39.6%
0
10
20
30
40
50
60
70
80
90
100
1925 1933 1941 1949 1957 1965 1973 1981 1989 1997 2005 2013
Tax rate on income in top tax bracket

48. UNIONS NO LONGER LIFTING UP THE BOTTOM
27%
13%
0%
5%
10%
15%
20%
25%
30%
Union members as a % of total workforce

49. HOW CAN WE GET BACK ON THE ROAD TO EQUALITY?
We need to recreate the institutional base for greater equality.
• A progressive tax system that levels down the rich.
• A labor movement strong enough to level up the poor.
But we need to go beyond the mid 20th century equality agenda.

50. HOW CAN WE GO BEYOND?
We already have
a minimum wage.
How about
a maximum?
An off-the-wall
notion? Not to FDR.

52. MAXIMUM WAGE IDEA PREDATES FDR
Felix Adler, founder of
Ethical Culture Society,
proposes a 100 percent
top tax rate in 1880.
In 1917, publisher E. W. Scripps calls for a
100 percent tax on all income over $50,000.
During World War I, New York
attorney Amos Pinchot, brother of
Pennsylvania Governor Gifford
Pinchot, calls for a 100 percent tax
rate on income over $100,000.

53. A MAXIMUM WAGE FOR THE 21ST CENTURY?
Not a set cap.
A set ratio between
top and bottom.

54. ACTIVISTS WORLDWIDE PUSHING RATIOS

55. THINKING UK MAXIMUM
March 2013: The British Trades Union
Congress announces that leading UK unions
will vote the shares their pension funds hold
against any corporate executive pay plans
that compensate CEOs at over 20 times
average worker pay.
‘We are going to use the power of our
pension funds to make a difference.’
TUC general secretary Frances
O’Grady

56. THINKING SWISS MAXIMUM
November
2013: Swiss
vote on
capping CEO
pay at 12
times lowest
worker pay

57. THINKING MARYLAND MAXIMUM
February 2014
Faculty senate at St. Mary’s
College narrowly votes down
plan to set college’s lowest
pay at 130 percent the official
federal poverty level and limit
the pay for St. Mary’s
president to 10 times that
lowest base pay.

58. THINKING MAXIMUM FROM CANADA
Year-old
campaign seeks
to create a new
global standard
for fair pay

59. THE PROMISE OF SOCIAL SOLIDARITY
If we tie pay at the top to pay at the bottom,
income at the top can only advance
if income at the bottom advances first.
Our richest and most powerful
would have a vested personal interest
in helping our poorest and weakest.

60. The Dodd-Frank Wall Street
Reform and Consumer
Protection Act enacted in
2010 mandates corporate
pay ratio disclosure.
A STEP TOWARD A ‘RATIO AMERICA’
Under Dodd-Frank, all corporations will
have to annually reveal the ratio between
their CEO pay and the pay of their median
workers.

61. CORE STRATEGY: LEVERAGE POWER OF THE PUBLIC PURSE
California Senate Bill 1372
 raises corporate tax from 8.84
to 13 percent for firms that pay
top execs over 400 times what
median workers are making.
 lowers the state corporate tax
rate to 7 percent on companies
with a CEO-worker pay divide
less than 25-to-1.
Loni Hancock
Rhode Island Senate Bill 2796
gives preferential treatment in
state government contract
procurement to companies
that pay their highest-paid
executive no more than 32
times what their lowest-paid
employees take home.
Cathie Cool Rumsey

62. A THREE-STEP TOWARD GREATER EQUALITY
Disclose
Require all
contractors who seek
state, county, or city
tax dollars to reveal
ratio between top and
median or lowest-
paid workers.
Support
Give preferential
treatment in the
procurement process
to enterprises with
modest executive-
worker pay divides.
Deny
Ban enterprises with
excessive executive-
workers ratios from
any shot of obtaining
tax dollars.

63. The top 1% share of national income
in the United States, 1928-2028
24%
A quarter-century from now, what sort of society do we want to live in?
THE QUESTION ‘OCCUPYING’ AMERICA

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