Gifts from the rich only look big Charity: America's super rich can afford to give millions because such amounts are pocket change to them. But something needs to be done about the inequality the distrihbution of American wealth.

October 05, 1997|By Holly Sklar

A million bucks is chump change these days to the richest Americans. It took $475 million to get on this year's Forbes 400 roll call of the ultra-rich, up from $415 million in 1996.

If the lowliest Forbes 400 member gives away a million dollars, that's equivalent to the median American household -- which makes about $35,500 a year -- giving less than $75.

While the average worker barely kept up with inflation last year, the richest American, Microsoft Corp. billionaire Bill Gates, more than doubled his net worth from $18.5 billion to $39.8 billion. That's an average gain of about $410 million a week. Gates is worth more than the combined gross national product of all the nations of Central America and he's about to pass Ireland, Egypt and Nigeria.

Unlike Gates and Oprah Winfrey (the latter ranked 343 with $550 million and is the only black person on the list) many Forbes 400 members inherited some or all of their fortunes. The heirs of Wal-Mart founder Sam Walton are ranked nine through 13 on the Forbes 400, with a combined inheritance of $32 billion. If they follow in the footsteps of wealthy families like the Rockefellers and du Ponts, they'll be on the Forbes 400 for many generations.

Steve Forbes can relate. He inherited the driver's seat and majority stock in Forbes Inc. from his father. The Forbes family is conspicuously absent from the 400, but Fortune magazine pegged Steve Forbes' personal wealth at $439 million in 1996, enough to make the cut that year.

Today, the United States has 170 billionaires by Forbes magazine's count and more than 36 million people living below the poverty line. The latest poverty thresholds are $7,995 for a single person and just $12,516 for a family of three.

It took an annual income of $119,540 in 1996 to put a household in the nation's top 5 percent, reports the U.S. Census Bureau in its just-released survey of income and poverty. That's small potatoes for the Forbes 400, but not for most people.

The top 5 percent of households increased their share of national income from 15.6 percent in 1981 to 21.4 percent last year. The bottom 80 percent lost ground to those above.

When it comes to wealth, the top 5 percent has an even larger share, holding about 60 percent of all net worth, according to New York University economist Edward Wolff. The rich have gotten richer while the real weekly wages of average workers have fallen 16 percent since 1973.

Nike founder Philip Knight, No. 17 on the Forbes 400 with $5.4 billion, knows about paying low wages. Nike sneakers don't come cheap, averaging well over than $60 a pair. But the typical Nike worker is an Asian girl or woman working in a sweatshop for less than $10 a week.

Forbes comments, "An unrepentant Phil Knight blasts his sweatshop critics: 'This isn't an issue that should even be on the political agenda today. It's just a sound bite of globalization.' "

Knight and other corporate kingpins will continue reaping billions while paying their workers bite-size wages unless we just do it, and put fairness back on the national agenda.

Ted Turner, No. 28 on the Forbes list with $3.5 billion, made news recently with his promised gift of $1 billion for United Nations programs to improve child health, remove land mines and so on.

Last year, he blasted his fellow billionaires for being a bunch of Scrooges. He said, "These big billionaires are busy letting go middle managers in their 50s, the day before their pension plans kick in. We're getting to be like Mexico and Brazil, with the rich living behind fences."

Sure we need more generous philanthropy. But even more importantly, we need to reverse the rise in inequality.

Paying workers fair wages is a great place to start.

Holly Sklar is a Boston-based writer whose books include "Chaos or Community? Seeking Solutions, Not Scapegoats for Bad Economics" (South End Press, 1995).

Pub Date: 10/05/97

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