Showing posts with label income. Show all posts
Showing posts with label income. Show all posts

Wednesday, November 09, 2011

Screwflation: Screwing the Middle Class

"Screwflation", a term coined by Wall Street guru, Doug Kass, describes how falling wages and rising costs of basic goods are screwing squeezing the middle class. Moreover, the culture of greed that has escalated over the last three decades, leaving an unprecedented redistribution of wealth from the middle class to the top one percent has negated any possibility of a robust  middle class America in the future. 

This younger generation of Americans -  saddled with college and housing debt, yet scarce job opportunities - now face the highest unemployment since World War II.   To make matters worse, older Americans are forced to stay in their jobs longer, limiting employment prospects even more.

The American middle class under stress.

  • Middle-income jobs are disappearing from the economy. The share of middle-income jobs in the United States has fallen from 52% in 1980 to 42% in 2010. Middle-income jobs have been replaced by low-income jobs, which now make up 41% of total employment.
  • 17 million Americans with college degrees are doing jobs that require less than the skill levels associated with a bachelor’s degree.
  • Real wages have stagnated over the past two decades, and in recent months, have actually fallen. Over the past year, nominal wages grew only 1.7% while all consumer prices, including food and energy, increased by 2.7%.
  • Wages and salaries have fallen from 60% of personal income in 1980 to 51% in 2010. Government transfers have risen from 11.7% of personal income in 1980 to 18.4% in 2010, a post-War high. There are 8.5 million people receiving unemployment insurance and over 40 million receiving food stamps.
  • Health care spending increased from 9.5% of personal consumption in 1980 to 16.3% in 2010.
  • The average cost of one year of college is $21,000. After adjusting for inflation, it has risen 72% since 1990.
  • The share of personal consumption spent on food and energy has risen from 13.4% in 2002 to 15.3% in 2010.
  • Household net worth declined from $65.7 trillion in the second quarter of 2007 to $56.8 trillion in the fourth quarter of 2010. The middle class, which has much more of its net worth tied up in home equity, has borne the brunt of this decline.
  • Over the past three decades, household debt as a share of disposable income increased from 68% to 116%.

Read more...

Thursday, December 09, 2010

80% of All New Income Has Gone to the Top 1% Over the Last 25 Years!

Senator Bernie Sanders kicks ass:


Senator Bernie Sanders is a rare breed of politician in Washington today.  He is, without a doubt, one of the fiercest, if not thee fiercest advocate for  We the People, moreover, he may be one of the last honest politicians in Washington.

Almost full transcript of Sen. Sander's speech :

On who is winning in this economy and who is losing:
"Mr. President...the income going to the top 1% nearly tripled since the 1970s...
Today, if you can believe it, the top one-tenth of 1% earns about 12 cents of every dollar earned in America.  We talk about a lot of things on the floor of the Senate but somehow we forget to talk about who is winning in this economy and who is losing. And it's very clear to anyone who spends two-minutes studying this issue that the people on top are doing extraordinarily well, at the same time the middle-class is collapsing, and poverty is increasing.

...you know many people out there are angry; they're wondering what's happening to their own income, to their lives, to the lives of their kids. Since 1980 and 2005, 80%...80% of all new income created in this country went to the top 1%..80% of all new income. "
[...]
Today, the Wall Street executives...the crooks on Wall Street whose actions resulted in the severe recession that we are in right now--the people whose actions, illegal actions, reckless actions, have resulted in millions of Americans losing their jobs, their homes, their savings. Guess what? After we bailed them out, the CEOs today are earning more money than they did before the bailout.

Mr. President, while the middle class of this country collapses and the rich become richer, the United States, has by far, the most unequal distribution of income and wealth of any major country on earth.
[...]
On Bush tax-cuts:
We are now faced with the issue of what we do with the Bush tax cuts of 2001-2003. And if you can believe it, we have people here, many of whom are my Republican colleagues, who tell us, 'Oh, I am so concerned about our record breaking deficit...I am terribly concerned about a $13.7 TRILLION national debt...I'm terribly concerned about the debt we're going to be leaving to our kids and our grandchildren...but wait a minute...it's very important that we give, over a 10-year period, $700 billion in tax breaks to the top 2%.  Oh yeah, we're concerned about the debt...we're concerned about the deficit...but we are more concerned that the millionaires, people who earn at least a million dollars per year or more get, on average, a hundred-thousand dollars a year in tax-breaks. ' So you gotta $13.7 trillion national debt growing, you got growing income equality: top 1% earning more income than the bottom 50% but the highest priority of many of my Republican colleagues is to make sure that millionaires and billionaires get more tax-breaks. I think it's absurd.
On the estate tax:
But it is not only income tax rates that we're dealing with. It's the estate tax as well. And let's be clear, while some of my friends want to eliminate completely, the estate tax, which has been in existence since 1916...let us be clear that every nickel of benefit...ALL OF THOSE BENEFITS will go to the top three-tenths of 1%, and if we did as some of my friends would like, eliminate  the estate tax completely, it would cost us a TRILLION dollars in revenue for a 10-year period of time...ALL OF THOSE BENEFITS going to the top three-tenths of 1%. So, I'm sure in a little while, some of my friends are going to come down to the floor, and say...'we're very concerned about the...'
On destroying the "New Deal":
But, Mr. President, the tax issue is just one part of what some of our wealthy friends want to see what happen in this country. The reality is that many of these folks want to bring the United States back to where we were in the 1920s. And they want to do their best to eliminate all traces of social legislation which working families fought tooth and nail to develop to bring a modicum of stability security to their lives.

There are people out there, not all, but there are some, who want to privatize or eliminate social security. They want to privatize or cutback substantially on Medicare. Yeah, you're 75-years of age and have no money...good luck to you getting your health insurance at an affordable cost from a private insurance company…I am just sure there are sorts of private insurance companies just delighted to take care of low-income seniors who are struggling with cancer or another disease.
On China: the 51st state and disastrous trade policies:
Mr President, furthermore, there are corporate leaders out there, and many members of congress who not only want to continue, they want to expand our disastrous trade policies.
[…]
We seem to have a country, which has a 51st state named China, which is virtually producing all of the products that we as Americans consume. Our trade policy has resulted in the loss of millions of good paying jobs as large corporations and CEOs have said, why do I want to reinvest in American when I can go to countries where people are paid 50¢, 75¢ an hour…that’s what I’m gonna do…the heck with working people in this country.
On our wealthy "friends" in high places:
While we struggle with a record breaking deficit and a large national debt caused by the wars in Iraq and Afghanistan, caused by tax breaks for the wealthy, caused by an unpaid for Medicare Part D Prescription Drug Program, caused by the Wall Street bailout...driving up the deficit, driving up the national debt..some people can say, ‘Oh my goodness! We’ve got all these expenses, and we’ve gotta give tax breaks to millionaires and billionaires, but we gotta balance the budget. Gee, how we going to do that? Well, obviously, we know how we’re going to do that. We’re going to cut back on health care, we’re going to cut back on education, we’re going to cut back on childcare, we’re going to cut back on PELL programs…we’re going to cut back on food-stamps,…we’re surely not going to expand unemployment compensation…we gotta a higher priority, Mr. President. We have got to, got to got to give tax breaks to billionaires! That’s what this whole place is all about, isn’t it? They fund the campaigns, they get what’s due them.

Mr. President, amazingly enough, we have our friends on Wall Street, the CEOs of the large financial institutions…they want to rescind or slow-down many of the provisions, very modest provisions in the financial reform bill…I voted for the financial reform bill but I will tell you clearly, it didn’t go nearly anywhere near far enough but it went too far for our Wall Street friends and their lobbyists, who were all over here, and the hundreds of millions of dollars Wall Street spends on this place. These people want to cut back on the powers of the EPA and department of energy, so that Exxon Mobil can remain one of the most profitable corporations in world history, while oil and coal companies continue to pollute our air and our water. Last year Exxon Mobil made $19 billion in profit. Guess what? They paid zero in taxes and got a $156 million refund from the IRS. I guess that’s not good enough. We gotta give the oil companies even more tax breaks.

So, Mr. President, that’s where we are, and we gotta own up to it. There is a war going on. The middle-class is struggling for existence and they’re takin on some of the wealthiest and most powerful forces in the world whose greed has no end. And if we don’t start to stand together and start representing those families, there will not be a middle-class in this country.” -- Bernie Sanders

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Thursday, November 01, 2007

$7,000 is the Average Income Per Person Worldwide

The world's average income - total world income divided by total number of people - is about $7,000. Still, only about 19 percent of the world's population lives in countries with per capita incomes at least this high.

Countries with an average income near $7,000 include Mexico, Chile, and Latvia. They rank about 40th in the global income table.

As of 2005, people living in rich countries had an average income of about $35,000. The high incomes in these countries make the world average income four times larger than the world median income, which was $1,700 that year.

Enter your annual income and see where you rank worldwide.

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Friday, June 01, 2007

Determine Your Socioeconomic Status.

Occupation, education, income and wealth are the four major factors used to determine a person's socioeconomic status. Check out this interactive graphic and see what category you fall into... lower, middle or upper class.

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Saturday, May 26, 2007

Is Family Income Growth Really Decelerating or Are Is Our Appetite Increasing?

Is Family Income Growth Really Decelerating or Are Is Our Appetite Increasing?

I think the answer to this question is yes and yes.

The new study I linked reviewed income levels, adjusted for inflation, of American men in their 30s, and came to the conclusion that the income growth of the average American household is declining; however our nation's productivity level is hardy and healthy.

Considering the cost of big ticket items necessary to live a comfortable life in the United States; it is not hard to believe that this generation of working men in their 30's are not doing as well as their fathers. Homes and the added cost of upkeep; cars and the added cost to run; computers (increasingly necessary), appliances ect make it very difficult to keep up with the Jones as easily "Father" did at one time.

At the same time, "Father" expected less. It seems as if each new generation demands bigger and better on a much larger scale then ever before. Of course new technology (cars, electricity, TV ect) enable new generations to live a little more comfortably than the previous one did, but I’m not sure if the greed factor played as important a role as it does now. People live in houses much larger than they could ever use; drive cars that are tanks; have more clothes than their super-duper walk-in closets have room for; and generally have more "toys" than one could ever play with.

I believe that Junior has a tougher time making ends meet because of both, income growth decreasing and consumer "needs" increasing to the point of no return, however this is because Junior woke up one day and decided he wanted bigger portions of everything. Much of it has to do with corporations underhandedly convincing us that a super-sized world is a much better place to live.

"The expectation that each generation will do better than their parents has become a fundamental part of what we call 'The American Dream,'" said Morton. "But this new analysis suggests this bedrock belief may be shifting under our feet."

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Sunday, February 04, 2007

American Way of Equality.


Income inequality is on the rise. The rich are getting better at passing their advantages on to their kids. Lifestyle and values gaps are widening between the educated and uneducated. So the big issue is: Will Americans demand new policies to reverse these trends — to redistribute wealth, to provide greater economic security? Are we about to see a mass populist movement in this country?
Nobody was smarter on this subject than Seymour Martin Lipset, the eminent sociologist who died at 84 on New Year’s Eve. Lipset had been a socialist in the hothouse atmosphere of City College during the 1940s, and though he later became a moderate Democrat, he continued to wonder, with some regret, why America never had a serious socialist movement, why America never adopted a European-style welfare state.
Lipset was aware of the structural and demographic answers to such questions. For example, racially diverse nations tend to have lower levels of social support than homogeneous ones. People don’t feel as bound together when they are divided on ethnic lines and are less likely to embrace mutual support programs. You can have diversity or a big welfare state. It’s hard to have both.
But as he studied these matters, Lipset moved away from structural or demographic explanations (too many counterexamples). He drifted, as Tocqueville and Werner Sombart had before him, to values.
America never had a feudal past, so nobody has a sense of social place or class-consciousness, Lipset observed. Meanwhile, Americans have inherited from their Puritan forebears a sense that they have a spiritual obligation to rise and succeed.
Two great themes run through American history, Lipset wrote in his 1963 book “The First New Nation”: achievement and equality. These are often in tension because when you leave unequally endowed people free to achieve, you get unequal results.
Though Lipset never quite put it this way, the clear message from his writings is that when achievement and equality clash in America, achievement wins. Or to be more precise, the achievement ethos reshapes the definition of equality. When Americans use the word “equality,” they really mean “fair opportunity.” When Americans use the word “freedom,” they really mean “opportunity.”
Lipset was relentlessly empirical, and rested his conclusions on data as well as history and philosophy. He found that Americans have for centuries embraced individualistic, meritocratic, antistatist values, even at times when income inequality was greater than it is today.
Large majorities of Americans have always believed that individuals are responsible for their own success, Lipset reported, while people in other countries are much more likely to point to forces beyond individual control. Sixty-five percent of Americans believe hard work is the key to success; only 12 percent think luck plays a major role.
In his “American Exceptionalism” (1996), Lipset pointed out that 78 percent of Americans endorse the view that “the strength of this country today is mostly based on the success of American business.” Fewer than a third of all Americans believe the state has a responsibility to reduce income disparities, compared with 82 percent of Italians. Over 70 percent of Americans believe “individuals should take more responsibility for providing for themselves” whereas most Japanese believe “the state should take more responsibility to ensure everyone is provided for.”
America, he concluded, is an outlier, an exceptional nation. And though his patriotism pervaded his writing, he emphasized that American exceptionalism is “a double-edged sword.”
Political movements that run afoul of these individualistic, achievement-oriented values rarely prosper. The Democratic Party is now divided between moderates — who emphasize individual responsibility and education to ameliorate inequality — and progressive populists, who advocate an activist state that will protect people from forces beyond their control. Given the deep forces in American history, the centrists will almost certainly win out.
Indeed, the most amazing thing about the past week is how modest the Democratic agenda has been. Democrats have been out of power in Congress for 12 years. They finally get a chance to legislate and they push through a series of small proposals that are little pebbles compared to the vast economic problems they described during the campaign.
They grasp the realities Marty Lipset described. They understand that in the face of inequality, Americans have usually opted for policies that offer more opportunity, not those emphasizing security or redistribution. American domestic policy is drifting leftward, but there are sharp limits on how far it will go.

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