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Income inequality is surging, and there are few countries where it is rising faster than the United States. The distance between rich and poor is greater in America than nearly all other developed countries, making the US a leader in a trend that economists warn has dire consequences. GlobalPost sets out on a reporting journey to get at the ‘ground truth’ of inequality through the lenses of education, race, immigration, health care, government, labor and natural resources. The hope is to hold a mirror up to the US to see how it compares to countries around the world.
America's wealthiest metropolitan area is also one of the country's least equal.
the nature of lawbreaking seems different in Greenwich, where a series of high-profile white collar crimes have been in the news.
Steven A. Cohen, founder of SAC Capital Advisors, is facing multiple insider trading investigations into his $14 billion fund. Or his neighbor, Walter Noel, founder of a hedge fund, Fairfield Greenwich Group, that was the largest single beneficiary of the infamous Bernie Madoff fraud. It’s a good bet some sleep was lost at the $10.8 million mansion of Dick Fuld, former CEO of Lehman Brothers.
But for high-priced defense attorneys, a membership at the Greenwich Country Club and getaways to St. Bart’s can take the sting out of such things. For the residents of Bridgeport’s Eastside, escape is not so easy.
The Gatsby Effect
Above: Scenes on the main street of Greenwich, CT. Below: Scenes of the partially torn down Remington Arms factory in East Bridgeport, CT.
While Bridgeport and Greenwich represent two extremes, economists — backed by a growing body of statistical evidence — suggest their radically different trajectories reflect a new reality in America.
The American Dream, that touchstone of social mobility, opportunity and justice for all, has slipped beyond the grasp of an increasingly large proportion of American society as unequal origins increasingly fuel unequal outcomes.
“Inequality of opportunity has increased in recent decades,” writes University of Arizona researcher Lane Kenworthy in the current edition of Foreign Affairs magazine, whose coverage of this domestic topic is in itself indicative of the broader and global implications. “[A]vailable compilations of test scores, years of schooling completed, occupations, and incomes of parents and their children strongly suggest that the opportunity gap, which was narrowing until the 1970s, is now widening.”
Put simply, in today’s America, the children of today’s rich will very likely get richer, poor kids will probably remain so, and those in the vast middle class will be challenged, even in two-income households, to just tread water.
How can this be? The world still beats a path to America’s door after all, and from all corners of American society it is still possible to point out the rags-to-riches stories that underpin so many people’s faith in the country.
True, indeed: Oprah Winfrey, born in rural Mississippi, is one of the world’s richest people. Xerox CEO Ursula Burns grew up in a gang-infested housing project in Lower Manhattan. Sheldon Adelson, who gained notoriety as the founder of a right-wing “Super PAC” in the 2012 election, was a Chicago cab driver’s son before founding a casino empire. James Cayne was a struggling card shark when he was discovered by a senior executive at Bear Stearns, the investment bank. Cayne was CEO on the day in 2008 when Bear Stearns collapsed and walked way with at least $200 million.
But increasingly, these are the exceptions that prove the trend economists have variously dubbed as the Great Gatsby Curve or the opportunity gap: since 1971, the likelihood of someone born in the bottom five “quintiles” of the American income spectrum rising into the top two has drastically decreased. Household incomes in those bottom quintiles (representing 60 percent of all Americans) have barely grown.
Meanwhile, household income among those in the top two has soared — by 75 percent for those in the top 20 percent, for those earning in the top 5 percent of Americans, the increase is even more dramatic: 95 percent.
In the limited political debate that took place on this topic over the past election cycle, taxation — and competing plans to reform the way income tax is collected and its revenues spent — dominated the conversation.
But in Bridgeport, where incomes hover overwhelmingly in the bottom two quintiles, residents see their ills as going far beyond tax reform. Once a leading industrial city, with huge factories that produced Singer sewing machines, Remington rifles, Sikorsky helicopters, engines and electronics for General Electric and components for the wartime Manhattan Project that produced the atomic bomb, Bridgeport has failed to reinvent itself.
As late as the mid-1970s, says Jeff Kohut, a lifelong resident and civic activist, “you could leave a job in the morning and have another after lunch. The factories