Income Inequality
Are poor Americans falling further behind?
By Mary H. Cooper

The gap between the incomes of poor and wealthy citizens is larger in the United States than in any other industrialized country. Last year, for the first time in almost two decades, low unemployment and increases in the minimum wage helped boost the earnings of Americans at the bottom of the pay scale. But tax policies and the use of stock options as part of corporate executives' compensation packages. . . .

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Do American workers lack the necessary skills to qualify for better-paying jobs?

Richard W. Judy , Carol D'Amico Senior research fellow and senior fellow, Hudson Institute. From Workforce 2020: Work and Workers in the 21st Century, A 1997 Update of Workforce 2000 (1987), The Hudson Institute.	Jared Bernstein Economic Policy, Economist Institute. From testimony before the House Education and the Workforce Subcommittee on Oversight and Investigations, Oct. 29, 1997.

Today's Rich Are Really Rich

Income inequality is hardly a secret in American society. Poor workers who are struggling to get by on the minimum wage, currently $5.15 an hour by federal law, are bombarded by television advertisements hawking luxury cars, cruise vacations and other amenities that only the wealthy can afford. They root for athletes who take home millions of dollars a year and are entertained by actors and musicians whose annual incomes are hundreds of times higher than their own meager wages. Adding insult to injury, the rich are getting a lot richer. It took a net worth of $475 million to get on the annual Forbes 400 list of the wealthiest Americans last year, up from $415 million in 1996.

But the truly rich Americans -- the megamillionaires -- are less visible than the mere millionaires who populate Hollywood and the sports arenas. As one might expect, they are typically old white men, such as William Hewlett, 84, co-founder of Hewlett Packard (net worth $4.1 billion) and Metromedia founder John Kluge, 83 ($7.8 billion). Talk-show hostess Oprah Winfrey was the only black person in Forbes' rankings last year, and she placed a lowly 343rd, with a net worth of only $550 million.

Superstars like Michael Jordan have raised incomes for athletes to the stratosphere. (Photo Credit: Reuters/Steve Grayson)

But the technology boom has added younger blood, and a lot more money, to the top of the heap. The richest man in America is Microsoft co-founder William Henry Gates III, who at 41 has already amassed a fortune of about $40 billion -- more than the gross national product of many countries. Another Microsoft founder, Paul Gardner Allen, 44, ranks third at $17 billion. Of the richest 25 Americans, seven made their fortunes in high technology.

But there are other roads to riches. Many who made the list were simply in the right place at the right time and inherited their wealth, such as the widow and four children of Wal-Mart founder Sam Walton, who share the family fortune of $32 billion. William Wrigley ($2.5 billion) got rich from the family chewing gum empire, while liquor magnate Edgar Bronfman Sr. ($3 billion) took over Joseph E. Seagram & Sons from his father. John Richard Simplot amassed his $3.3 billion growing potatoes -- and later producing microchips.

What do they do with all their wealth? Most, of course, make more by investing their fortunes. And if the stock market continues its current upward spiral, the multibillionaire club can only multiply. Others buy land -- lots of it. Media mogul Ted Turner (net worth $3.5 billion) has acquired hundreds of thousands of acres of pristine forest and prairie throughout the Mountain West.

The super-rich also give some of their money away, if for no other reason than the fact that the Internal Revenue Service rewards philanthropy by excluding donated funds from taxation. But wealth and generosity do not always go hand in hand.

Microsoft co-founder Bill Gates is worth an estimated $40 billion. (Photo Credit: Reuters/Ian Hodgson)

Bill Gates may be the richest man in America, but he has given away a relatively paltry $100-$500 million to date, according to a recent listing of America's 100 leading philanthropists. ''

Granted, Annenberg and Mellon are in their 90s, while Gates has a wife and child to support. In fact, Gates is not alone among tycoons who, to date, have not distinguished themselves as great philanthropists. Only 61 of the people who made the Forbes 400 list also made the American Benefactor 100 list.

[1] See “The 400: The Average Net Worth of the Forbes Four Hundred is $1.6 billion,” Forbes, Oct. 13, 1997, pp. 181-250.

Footnote: 1. See “The 400: The Average Net Worth of the Forbes Four Hundred is $1.6 billion,” Forbes, Oct. 13, 1997, pp. 181-250.

[2] “The Top 25,” Forbes, Oct. 13, 1997, pp. 152-166.

Footnote: 2. “The Top 25,” Forbes, Oct. 13, 1997, pp. 152-166.

[3] Dan Rottenberg, “100 Most Generous Americans,” The American Benefactor, fall 1997, pp. 42-68. For background, see “The New Corporate Philanthropy,” The CQ Researcher, Feb. 27, 1998, pp. 169-197.

Footnote: 3. Dan Rottenberg, “100 Most Generous Americans,” The American Benefactor, fall 1997, pp. 42-68. For background, see “The New Corporate Philanthropy,” The CQ Researcher, Feb. 27, 1998, pp. 169-197.