Gwen Moritz

Hogs Get Slaughtered

Gwen Moritz Editor's Note


Hogs Get Slaughtered

Bob Williams, now of Simmons First Investment Group, told me years ago of a warning he received from a mentor early in his career: “Pigs get fat, hogs get slaughtered.” I’m not sure why that stuck with me the way it has, but I remember those words every time I watch another well-paid executive or politician destroy himself because plenty is never enough.

And it’s not just individuals. Bernie Sanders and Donald Trump don’t have much in common besides being in their 70s and having bad hair, but they have both tapped into the same political resentment by a middle class that has been left to stagnate even as the wealthiest have enjoyed a vast majority of all the economic gain since the Great Recession (and, honestly, long before).

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The Economic Policy Institute, a nonprofit that lobbies on behalf of low- and middle-income Americans, released this month its third annual report on income inequality in the United States. It found that 85.1 percent of total income growth between 2009 and 2013 (the most recent year for which complete data was available) flowed to the wealthiest 1 percent of households.

The other 99 percent divided up less than 15 percent of the postrecession recovery.

Two years ago, in a celebrated open letter to “My Fellow Zillionaires,” Seattle entrepreneur Nick Hanauer predicted the result of historically high levels of inequality.

“I see pitchforks,” he wrote for Politico.

And he continued: “Our country is rapidly becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution.”

I doubt even Hanauer could have predicted that the pitchforks would first take the form of a megalomaniac with an orange comb-over or a mathematically challenged, unreconstructed hippie, but who could have? What he said was that an uprising by the rank-and-file participants in the U.S. economy was inevitable: “You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples.”

Cliffs Notes version: Hogs are about to get slaughtered.

The Economic Policy Institute ranked U.S. states by the ratio between the average income of their wealthiest 1 percent of households and the average income of the other 99 percent. Arkansas ranked 17th (18th when the District of Columbia was included) with a ratio of 20.6. Specifically, the average annual income in 2013 of the wealthiest 1 percent of Arkansas households was $750,101, while the average income for every other household was $36,421.

Like all but nine states, Arkansas’ inequality ratio was lower (that is, incomes were less unequal) than the national ratio of 25.3. But that’s because inequality in the most unequal states — New York, Connecticut and Wyoming — is above 40, skewing the national ratio. (In those three states, the average annual income of the top 1 percent tops $2 million.)

But those are averages. What it took to enter the rarified air of the top 1 percent in Arkansas in 2013 — about 11,000 households — was annual income of $237,428. It was the lowest threshold of any state except New Mexico. (Yes, even Mississippi and West Virginia had higher thresholds.) Meanwhile, Arkansas’ ultra-wealthy, the hundred or so households in our top 0.01 percent, earned at least $5.3 million that year and earned an average of $20.6 million. (In Connecticut, the top 0.01 percent earned at least $18.7 million in 2013 and averaged $69.5 million. If Donald Trump would release his tax returns, we could find out if he was part of New York’s 0.01 percent with income of at least $15.8 million.)

Inequality in income between the top 1 percent and everyone else widened in Arkansas between 2009 and 2013, but not as badly as in many other states. Only 18.4 percent of income growth in those years flowed to the top 1 percent in Arkansas, while in 15 states the 1 percenters got more than all of the income growth, taking some from the 99 percent, whose average income actually declined.

Most egregious was Florida, where average income for the 1 percent increased by 15 percent while everyone else took an average hit of 4.3 percent. Could this help explain why Trump was able to win the Florida GOP primary despite having two homeboys on the ballot?

Some hogs should be very nervous.


The fact that there are only about 11,000 Arkansas households that earn in the $250,000 range helps me put the Arkansas Democrat-Gazette’s recent ad claiming to reach 72,000 “business decision-makers” in some context. I’m sure it’s only coincidental that the number of readers the Democrat-Gazette credited Arkansas Business with was 11,500.


Gwen Moritz is editor of Arkansas Business. Email her at GMoritz@ABPG.com.