I began thinking about the long term impact of the growing gap between rich and poor, and the flat-lining of middle class incomes, several years ago. I began the chapter on The Great Divides in my 2006 book by discussing the growing wealth divide, and in a 2006 keynote for the American Red Cross I called out the looming rich poor gap as an issue for philanthropic organizations.
Since 2006, the situation has gotten worse, of course, with the collapse of 2008, and the long non-recovery recovery that has followed. But now the issue has leaped from speeches about future trends to the front pages.
For over three weeks Occupy Wall Street protestors have been rallying against a number of grievances focused on a jobless economy and the Wall Street, regulatory, corporate and other policies that they see as combining systemically to prevent improvement. The website for Occupy Wall Street claims that,
The one thing we all have in common is that We Are The 99% that will no longer tolerate the greed and corruption of the 1%. We are using the revolutionary Arab Spring tactic to achieve our ends and encourage the use of nonviolence to maximize the safety of all participants.
Street demonstrations are a quintessential American tradition and right, and thus the demonstrators are carrying on in the footsteps of many who have come before them. What makes Occupy Wall Street unique is the intent to carry on an occupation as a tactic. Momentum for Occupy Wall Street has gathered speed in the last several days with the inclusion of local labor unions in the protests, and the spread to cities in almost every state in the Union. While many mainstream media and financial commentators have expressed opinions that range from confusion to disgust, others are beginning to catch on that something is happening here. Even President Obama has said Occupy Wall Street protests are a reflection of a ‘broad-based frustration about how our financial system works’, though I am not sure he grasps how much of the frustration is with his own ineffectiveness in dealing with that financial system (along with the rest of Washington DC).
Many of the Millennial Generation are involved in this protest, lending credence to the generational theory forecast that the Millennial Generation would be an activist generation. Amongst the thousands of protestors, hundreds have been arrested or aggressively handled in some way by the police, which is evident in the following video.
So what does it mean and where do things go from here? I have two primary observations today.
First, when in recent months I have mentioned the “rich poor gap” to business audiences, I have noticed that while some are glad to hear this reality pointed out, others bristle. I will put up a chart like the one below, and explain that I am not making a political statement, rather simply pointing out that the rich poor gap, which had closed between 1946 and 1979, has been widening due to a combination of factors including economic, global, technological, tax and government policy issues, and then I ask whether we really think that a society in which such a gap continues to grow can be a functioning society?
The second observation is that a good deal of my thinking on the likely long-term negative impacts of increasing wealth disparity comes from a quite earth shaking 2007 book by Robert H. Frank, entitled Falling Behind: How Rising Inequality Harms the Middle Class. When societies become more and more unequal, they become less healthy, less happy, less productive, less capable of producing innovation, more volatile, more prone to crime, and so on. Frank concludes his fascinating analysis of the drivers and the impacts of inequality with these two very prescient paragraphs,
Income and wealth inequality have been rising sharply in the United States for several decades, exacting a heavy toll on middle-income families. When market forces cause inequality to grow, public policy in most countries pushes in the opposite direction. That was also once the pattern in the United States. But more recently, we have responded by cutting taxes for the wealthy and reducing services for the needy. Historians will someday struggle to explain this puzzling reversal.
As the economist Herb Stein once famously remarked, if something can’t go on forever, it won’t. At some point, we will take steps to limit the damage caused by rising disparities in income and wealth. With a push from intelligent political leaders, such steps can be taken sooner rather than later. For even in an age of thirty-second sound bites, American voters have demonstrated their ability to see things from a different angle.
I have little doubt that the elections of 2008 and 2010, although the winning political parties differed, were both mostly a cry for addressing the decades-long economic patterns leading to the decline of the middle class, as described by Frank among others. The OWS demonstrations are likely to continue at least into the cold of winter, and then re-emerge even more full-throated in the spring. The choice they have made to call themselves “the 99%” is brilliant marketing, and the 99% will shape the 2012 elections. I concluded the section on wealth disparity in my book Turning the Future into Revenue this way,
The bottom line is simple. We can sugercoat economic statistics, point to skyrocketing housing values [in 2006], crow about GDP growth figures that mean little to average wage earners, and the reality is that the wealth divide is growing at the present time, and in the long run is deeply problematic.
If you are a professional speaker, be aware there is a quite slick Internet fraud out there. You get an email inviting you to speak at at a conference in Scotland (in my case) four weeks from now; the email comes from a Baptist Pastor. An internet search finds that this Pastor has indeed been assigned to the church in question, (Whytescauseway Baptist Church across the bay from Edinburgh) on Sep. 4, 2011. The offer is for a full speaking fee and travel, making mention of your profile in eSpeakers (where such fees are listed). While it is unclear how a church is getting that kind of money, if you indicate interest, you receive a formal invite letter and contract on [fake] Church letterhead from the event manager, who is a new name. The contract is quite detailed and typical of a European speaking contract, right up to the 50% deposit, the time and place of the event (the place is real when you look it up on the Net), and the fact that dress will be “business and business casual.” After returning the contract you get an email saying you will need a UK and Scottish work permit, for which an application fee is required. When you check at the UK Border Office web site, there are indeed work permits, applications and fees. The email from the scammer says by good fortune a church member works in the Border Office and can expedite your permit by carrying the application and fee in by hand, if you wire the application fee to her. Enough said.
I know of at least two other U.S. speakers caught in the scam so far. When, with better due diligence, I tracked down the real Pastor, he confirmed that they are aware of the scam and that the UK Police have been investigating for two weeks. I also contacted eSpeakers, who say they too have been aware of the scam, and that their marketing department is considering what to do.
So, if you are a pro speaker, and you get a letter saying hey, Person X and Glen Hiemstra and Person Y are all speaking at our event and you should too, you will know what is up. Bummer.
Note: this appears to have nothing to do with the actual Whytescauseway Baptist Church, which is also a victim of the scam.
Sir Arthur C. Clarke (December 1917-March 2008) was a forward-thinking writer and scientist involved in film, television, government, and especially, amazingly accurate speculation about the future. Clarke collected countless awards, including receiving a Knighthood in 1998 and having a geostationary orbit named after him by the International Astronomical Union.
I was touched this week when I discovered his heartfelt and optimistic speculations, and his “3 wishes” that he recorded in this video on the occasion of his 90th birthday in 2007. He speaks very much to today.
iCAREweCARE.org is a global network of high school and college students coordinating their volunteer efforts to focus on issues they really care about, in order to make a bigger difference in the world. The Founder is a dynamic high school student from the Seattle, Washington area, Priyanka Jain. We had the opportunity to interview her last week.
Our video interview of Priyanka is conducted by Mallory Smith, my Office Manager, a recent graduate of the University of Washington and herself a member of the millennial generation. It is exciting to hear the story of iCAREweCARE. As Priyanka says, why should she wait to make a difference when she can start doing that now.
I believe that what Priyanka is doing here is an example of the activist nature of the millennial generation, as forecast by William Strauss and Neil Howe in their various works on generational theory, especially the original The Fourth Turning, and then more specifically in Millennials Rising: The Next Great Generation. Look around the world and I think you will see this new generation, now about age 10 to 30, making their voices heard, often in dramatic ways.
Glen Hiemstra is a futurist speaker, author, consultant, blogger, internet video producer and Founder of Futurist.com. To arrange for a speech contact Futurist.com.
[Update: Priyanka was of the first "100x100" women entrepreneurs featured by the start-up company The Smart Girls Way.]