It’s hard to ignore the radical movement that has gripped mass and social media over the last month and that is the Occupy Wall Street protest that started in lower Manhattan, NY but has become a global phenomenon. What the "occupiers" are seeking to accomplish and how long they are willing to protest to achieve this undefined goal has not been disclosed from the leaders of the movement. (The October snow storm proved protesting in the cold is no fun…so they may want to get it together soon) The spectrum of demands ranges from conservative requests such as higher taxes on the top income earners all the way to less conservative (read: crazy) requests such as a radical redistribution of income. Although there is not a universal cause for which the protesters stand behind, what is at the heart of the outrage is the growing income and wealth disparity in our country. Simply put, the rich are getting MUCH richer, the so called "1%", and the poor are getting poorer, the noted "99%". In case you don't believe this, here are some alarming facts:
- Between 1993 and 2008, the top 1 percent of American families accounted for 52 percent of total income gains, according to a 2010 analysis of Internal Revenue Service tax data by economist Emmanuel Saez of the University of California, Berkeley. (source: New York Times)
- The top 1 percent of earners saw their inflation-adjusted, after tax earnings grow by 275 percent between 1979 and 2007, meanwhile those with incomes in the bottom 20 percent saw just an 18 percent increase. (Source: Congressional Budget office)
- The richest 1 percent of Americans control 40 percent of the domestic wealth, according to a study conducted by Nobel Peace Prize winning economist Joseph Stiglitz
- Contrastingly to the statistics above, in September 2011, the government reported 46.2 million Americans lived below the poverty line – the highest number ever recorded by the U.S Census Bureau.
*As a point of mention, a new group has emerged, "the 53%". This group has positioned themselves as opponents of OWS and the 99%. This percentage of citizens represents those that actually pay federal income taxes.
I am not speaking in favor of or against the Occupy Wall Street protest. (I am not in the 1%, so please continue reading) However, as a staunch financial literacy advocate and expert I am aware of the wealth and income disparity in our country, and particularly it's affects on underserved and underrepresented groups. With that said, in addition to protesting we must take equal effort and action in addressing the lack of financial literacy among the "99%". Having "less" requires careful and diligent use of financial resources. Smart decisions, expert planning, and seeking financial advice are what should be the focus of the not-so-wealthy. In my opinion, the OWS protesters should be demanding the following if they want to see real change that is effective:
1. Increased funding for financial literacy education in schools - this would be beneficial from elementary school through college. It should be mandated that students take a certain number of financial education classes prior to graduating from high school (similar to that of math and science). Outside organizations such as D.R.E.A.M. can provide these services or train teachers on the subject matter.
2. Additional funding for community based programs to educate the masses on entrepreneurship. At D.R.E.A.M. we teach our kids not to aim to be hired for the job in the future but to create the job of the future. Small businesses are the leading employers in the economy and drive economic growth. Let's encourage this!
3. Comprehensible reform to higher education tuition and costs. Tuition has been rapidly rising while the return on the investment has been diminishing due to the high price tag and anemic job market. A college education should be affordable and not financial suicide. 2010 college graduates, on average, owed $25,250 in student loans, up 5 percent from the previous year. Recent data shows that tuition and fees have increased 439 percent from 1982 to 2007. (Source: New York Times) Yikes!
4. A simplified tax code that eliminates loop holes and excessive write-offs. Increase government receipts WITHOUT raising taxes. This would ensure everyone is contributing their fair share to our nation's success. Washington needs to make the tough decisions to put our nation back on a path of growth.
These four points will, of course, not solve all our nation’s problems nor are they intended to. However, they serve as a great starting point from where we can begin to steer this country in a new, equitable direction for all. While educating ourselves and becoming financial literate, we all can employ the financial markets and the capitalist system to our benefit.
About the Author: Femi Faoye is the co-founder and Chief Executive Officer of D.R.E.A.M. He’s a staunch and passionate financial literacy education advocate.
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