Erika Eichelberger

Erika Eichelberger

Reporter

Erika Eichelberger is a reporter in Mother Jones' Washington bureau. She has also written for The NationThe Brooklyn Rail, and TomDispatch. Email her at eeichelberger [at] motherjones [dot] com. 

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The Head of the IMF Says Inequality Threatens Democracy. Here Are 7 Charts Proving She's Right.

| Wed May 28, 2014 9:59 AM EDT

In his State of the Union address in January, President Barack Obama promised to devote 2014 to tackling inequality. When French economist Thomas Piketty's book Capital in the Twenty-First Century was released in March, it pushed the problem of growing income disparity further into the global spotlight. In April, Pope Francis tweeted, "Inequality is the root of social evil." Now Christine LaGarde, the head of the International Monetary Fund—best known for lending money to developing countries on the condition that the those states make policy changes—is taking on inequality too, warning in a speech Tuesday that rising inequality is threatening global financial stability, democracy, and human rights.

"One of the leading economic stories of our time is rising income inequality, and the dark shadow it casts across the global economy," LaGarde said.

The richest 10 percent of people in the world hold 86 percent of the world's wealth, and just 0.7 percent own 41 percent of global riches, according to the Credit Suisse 2013 Global Wealth Report. The bottom half of all adults in the world own just one percent of global wealth:

Here's what the very top of that pyramid looks like. About 10,000 people have more than $50 million:

In 24 of the 26 countries where the IMF collects income data, the wealthiest 1 percent has increased its share of income over the past three decades. Here's what that looks like in America:

 

Countries that are more unequal tend to be less stable and have lower economic growth, according to the IMF. Income disparity can bring more dire consequences too. "Disparity…brings division," LaGarde said. "History…teaches us that democracy begins to fray at the edges once political battles separate the haves against the have-nots."

What to do about growing income disparity around the world? The IMF chief suggested countries implement "redistributive" measures, including expanded access to education and health care, increased property taxes, and more progressive tax systems. Here's how the US tax system has helped the rich get richer over the years:

LaGarde said cracking down on the banking sector is part of the puzzle, too, since the 2008 financial meltdown increased the wealth gap. In her speech, LaGarde said that although governments have made progress in reining in big banks, most countries have not yet imposed strict enough reforms on the financial sector. The problem of banks being so large their collapse would endanger the entire financial system—a.k.a. too big to fail—is still with us, she noted. Here is how banks got too big to fail:

LaGarde also urged that rules governing how banks operate across international borders be tightened. And she called for a change in the banking "culture," pointing to recent scandals in which financial firms were accused of money laundering and rigging interest rates.

LaGarde slammed the banking sector's resistance to reform. "The behavior of the financial sector has not changed fundamentally…since the crisis," she said. "The industry still prizes short-term profit."

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Fast-Food Strikes Go Global

| Thu May 15, 2014 9:58 AM EDT
A protester in Seoul, South Korea at a rally Thursday to demand higher wages for fast-food workers.

On Thursday, the fast-food strikes that have been spreading around the country are going global.

Workers at restaurants like Burger King, McDonald's, Wendy's, and KFC are walking off their jobs in 230 cities around the world to demand a minimum wage of $15 an hour and the right to form a union without retaliation. Strikers will protest in 150 US cities, from New York to Los Angeles, and in 80 foreign cities, from Casablanca to Seoul to Brussels to Buenos Aires.

In Zurich, some protesters are wearing "sad hamburger costumes." In the Philippines, protestors staged a flash-mob at a Manila McDonald's during morning rush hour.

The wave of strikes—which began in November 2012, when hundreds of workers walked out of restaurants in New York City—has grown quickly over the past year and a half. The idea behind this coordinated international protest was not just to further raise the profile of the fast-food workers' movement. With labor unions declining in clout at home, organizers hope that the powerful international unions can help pressure US-based companies into making changes. Last week, the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers' Associations—a labor federation composed of 396 trade unions that represent 12 million workers in 126 countries—held a summit in New York City where fast-food workers and union leaders finalized plans for the global strike.

The massive fast-food protests come a few weeks after a recent report on the industry by the left-leaning think tank Demos found that fast-food CEOs are paid a thousand times more than the average franchise worker, who makes about $8.69 an hour. Fast-food wages have dropped by 36 cents an hour since 2010. More than half of the families of fast-food workers rely on public programs like food stamps and Medicaid. (Check out our calculator to see if you could live on a fast-food wage.)

Though the industry has not yet raised wages by any significant amount, the strikes are having an effect. In a March filing with the Securities and Exchange Commission, McDonald’s said worker protests might force the company to raise wages this year. And as Salon's Josh Eidelson reported earlier this month, the National Restaurant Association, the industry trade group, is growing increasingly worried about the fast-food protests, closely monitoring social media for plans of future actions.

And while Congress is unlikely to raise the federal minimum wage any time soon to the $10.10 an hour wage President Obama proposed in his 2013 State of the Union speech, states are taking up the fight. Over the past year, seven states and the District of Columbia have raised their minimum wages, and 34 states are considering bumping up pay for their lowest-paid workers. In late April, the mayor of Seattle proposed a $15 minimum wage.

Scott DeFife, an executive vice president for the National Restaurant Association, dismisses the movement's potential. As he told the New York Times on Wednesday, "These are made-for-TV media moments—that’s pretty much it."

The Next Cliven Bundy Showdown

| Fri May 9, 2014 11:59 AM EDT
Nevada rancher Cliven Bundy.

It looks like a new front has opened up in Cliven Bundy's war against the US government.

This Saturday, angry residents of San Juan County, Utah, plan to illegally ride their ATVs through Utah's Recapture Canyon—an 11 mile-long stretch of federal land that is home to Native American archeological sites—because they don't think that the federal Bureau of Land Management should have designated that land off-limits to motor vehicles. The protest was meant to be a local affair. But on Thursday, Bundy, the rancher who wouldn't pay the feds grazing fees and sparked a gun-drenched showdown in Nevada, called on his supporters to join the anti-government off-roading event, E&E Publishing's Phil Taylor reported. Bundy, whose crusade against the federal government became tainted by his racist comments, is looking to spread the cause from cattle to cross-country cruising.

"We don't expect any violence," San Juan County Sheriff Rick Eldredge told the Denver Post last week.  Others aren't so sure, especially since the out-of-staters in attendance could help rile things up—which is what happened during the Bundy stand-off. "This may blow up to be significantly more than they thought," Bill Boyle, a resident of San Juan and publisher of the San Juan Record newspaper told the Post. "I think there are those who would like everyone with an AK-47 to be here."

San Juan County residents who plan to attend Saturday's event are Bundy supporters and Ted Nugent fans, according to an analysis of their Facebook pages by the Denver Post. They also hate President Barack Obama and Senate majority leader Harry Reid, according to the newspaper, which reports that "BLM employees in San Juan County have had windows shot out of their homes and their yards torn up by ATVs in the middle of the night."

The BLM made the Recapture Canyon land off limits in 2007 because ATVs were damaging the land and folks were vandalizing Native American sites. San Juan County Commissioner Phil Lyman, who is organizing Saturday's protest, does not believe the feds have the authority to protect cultural resources. He says the goal of the ride is to reassert county jurisdiction in the face of federal "overreach," according to the Salt Lake Tribune. Federal overreach was the theme that Bundy's champions in the national conservative media repeatedly pressed—until Bundy's racist comments became news.

Local officials do not have a good estimate of how many mad-as-hell ATV riders will show up to zoom through sacred Native American land on Saturday. But the BLM has decided to stand back and avoid a conflict for now, as it did several weeks ago on the Bundy ranch in Nevada. Utah's BLM director Juan Palma, however, said there will nonetheless be consequences for the anti-government activists. "The BLM-Utah has not and will not authorize the proposed ride and will seek all appropriate civil and criminal penalties against anyone who uses a motorized vehicle within the closed area," he said in a statement.

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