High income workers' share of total wages grows
WASHINGTON (AP) — Fifty percent of U.S. workers earned less than $26,364 last year, reflecting a growing income gap between the nation's rich and poor, the government reported Thursday.http://www.cbsnews.com/8301-501369_162-20123544.html
There were fewer jobs, and overall pay was trending down — except for the nation's wealthiest. The number of people making $1 million or more soared by over 18 percent from 2009, the Social Security Administration said, citing payroll data based on W-2 forms submitted by employers to the Internal Revenue Service.
Despite population growth, the number of Americans with jobs fell again last year, with total employment of just under 150.4 million — down from 150.9 million in 2009 and 155.4 million in 2008. In all, there were 5.2 million fewer jobs than in 2007, when the deep recession began, according to the IRS data.
The figures are just one more indication of the toll that the worst downturn since the Great Depression has taken on the U.S. economy. They were published as demonstrations rage on Wall Street and in cities across the nation protesting a widening income gulf between average wage earners and the nation's wealthiest.
The unemployment rate remains stuck at 9.1 percent, with more than 14 million out of work and 11 million other discouraged people who have stopped looking for work or are stuck in part-time jobs. Since 1980, roughly 5 percent of annual national income has shifted from the middle class to the nation's richest households, according to the Census Bureau.
While the average U.S income last year was $39,959, the mean income — the figure where half earn more and half earn less — was much lower, $26,364. This disparity reflects the fact that "the distribution of workers by wage level is highly skewed," according to Social Security.
Median compensation last year was just 66 percent of the average income, compared with nearly 72 percent in 1980.
I’m sure more tax cuts, free trade deals and globalization will cure that up soon, right? Meanwhile, Herman Cain blames the unemployed for their plight and pushes the most regressive tax in America’s history. Jesus wept.
Economist Mark Thoma laments:
I wish I could find a way to adequately express the frustration I feel over the way Congress has all but turned its back on the unemployed. Even now, the only reason we're hearing anything from Democrats about job creation is because there's an election ahead. The legislation is timed for the politicians -- it needs to maximize reelection chances -- minimizing the struggles of the unemployed is a secondary consideration (if that). If the election were further away it's unlikely we'd be hearing about this much at all. And Republicans are worse, they have no plans at all except to use unemployment as an excuse to further ideological goals (balanced budget amendments, tax cuts for the wealthy, etc.). How can politicians be so indifferent to the struggles that the unemployed face daily? Are they really so disconnected from the lives of ordinary people that they don't understand how devastating this is to those who lost jobs due to the recession, people who can't find a way to get hired again no matter how hard they try?
How can politicians be so indifferent to the struggles that the unemployed face daily? Here's why, Mark:
Analysts at Bloomberg News examined new Census data and found that the area surrounding the nation's capital is now the richest in the nation:http://news.yahoo.com/blogs/ticket/washington-d-c-area-now-richest-nation-191806412.html
Federal employees whose compensation averages more than $126,000 and the nation's greatest concentration of lawyers helped Washington edge out San Jose as the wealthiest U.S. metropolitan area, government data show.
The U.S. capital has swapped top spots with Silicon Valley, according to recent Census Bureau figures, with the typical household in the Washington metro area earning $84,523 last year. The national median income for 2010 was $50,046.
Total compensation for federal workers, including health care and other benefits, last year averaged $126,369, compared with $122,697 in 2009, according to Bloomberg News calculations of Commerce Department data. There were 170,467 federal employees in the District of Columbia as of June.
A survey in March of federal government job openings in the area found hundreds of well-paying gigs on offer. Highlights from those listing include an offer for up to $115,000 a year to update the Facebook page and manage new media projects for the Assistant Secretary for Indian Affairs and a deputy speechwriter gig for Office Of Personnel Management Director John Berry that paid up to $81,204 annually.
Of course, federal pay isn't the only factor contributing to Washington's new status. The proliferation of high-priced lobbyists, contractors and consultants, combined with one of the most stable (and pricey) real estate markets in the country, means that the D.C. region is one expensive place.
Meanwhile, in the rest of the nation:
A mid-September survey ascertained that a full one third of Americans were living paycheck to paycheck, and if they lost their job, they would not be able to make their next rent or mortgage payment. And the article stresses this was not a function of being in or near the poverty line (hat tip reader May S):http://www.nakedcapitalism.com/2011/10/one-third-of-americans-one-paycheck-away-from-homelessness.html
Despite being more affluent, the poll found that even those with higher annual household incomes indicate they are not guaranteed to make their next housing payment if they lost their source of income.
Ten percent of survey respondents earning $100K or more a year say they would immediately miss a payment….
Sixty-one percent of those surveyed said if they were handed a pink slip, they would not be able to continue to make their mortgage or rent payment longer than five months.
The implications are grim. The odds of an economic recovery any time soon are close to non-existent. Many large companies (like Bank of America) have announced layoffs.
Flagging top lines and a likely to be weak Christmas season, if Chinese shipping volumes are any guide, means more cuts are likely go be announced next year. And that’s before you factor in the impact of a strengthening dollar, state and local government belt tightening and a possible financial crisis.
Globalization works! More Americans than Chinese are struggling to put food on the table:
The number of Americans who lack access to basic necessities like food and health care is now higher than it was at the peak of the Great Recession, a survey released Thursday found. And in a finding that could worsen fears of U.S. decline, the share of Americans struggling to put food on the table is now three times as large as the share of the Chinese population in the same position.http://news.yahoo.com/blogs/lookout/more-americans-chinese-t-put-food-table-132752601.html
The United States' Basic Index Score, a Gallup measure of access to necessities, fell to 81.4 in September--even lower than the 81.5 mark it reached in February and March, 2009. The recession officially ended in June of that year, but the halting recovery hasn't given a sustained boost to the number of Americans able to provide for themselves. The government reported last month that a record number of Americans is living in poverty.
Between September 2008 and last month, the share of Americans with access to a personal doctor plummeted from 82.5 percent to 78.3 percent. The share with health insurance fell from 85.9 percent to 82.3 percent. And the share saying they had enough money to buy food for themselves and their family dropped from 81.1 percent to 80.1 percent. Gallup's surveys are based on phone and in-person interviews.
Meanwhile, Gallup found that just 6 percent of Chinese said there were times in the past 12 months when they lacked enough money for food for themselves or their family, compared to 19 percent of Americans. Just three years ago, those results were almost reversed: 16 percent of Chinese couldn't put food on the table at times, compared to 9 percent of Americans.
Five Fact About the Wealthiest 1 Percent:
How Wealthy are the 1 percent?:
[...] Moreover, Piketty and Saez show that in the most recent business cycle, from 2002 until 2007, about two-thirds of all income gains went to the top 1 percent of households. The top 1 percent saw their incomes increase more than 10 percent per year, adjusted for inflation. The 99 percent saw their incomes increase a measly 1.3 percent per year. And the trend goes back further. As noted by Tim Noah in his excellent Slate series on inequality, from 1980 until 2005, the 99 percent saw just one-fifth of the overall gains in income.http://www.slate.com/articles/business/moneybox/2011/10/occupy_wall_street_says_the_top_one_1_percent_of_americans_have_.html
The 1 percent’s income did take a knock during the Great Recession: It dropped 20 percent, whereas the 99 percent took a 7 percent hit. But that mostly was caused by the stock market crash and falling capital-gains earnings among the rich, not by salary cuts.
The 99 percent’s fortunes look even worse if you focus on wealth, rather than income—the total value of a household or individual’s assets, such their house and their investment funds. According to data compiled by economist Edward Wolff (PDF), in 2007, the 99 percent held about two-thirds of American wealth, meaning the top 1 percent has nearly one-third.
The 1 percent has about 43 percent of all the nonhousing wealth, which has held up comparatively better. Sociologist William Domhoff reports that the 99 percent hold just 38 percent of equity in businesses, 40 percent of financial securities, and 62 percent of stocks and mutual funds. Among the 99 percent, about one in three households has more than $10,000 in stock. Among the 1 percent, nearly nine in 10 households do.
In short, inequality has increased in the past decade, leaving the 99 percent with smaller and smaller proportions of income and wealth. And it has many economists, public policy wonks, and, well, protesters very, very worried. As put by Nobel laureate Joseph Stiglitz, “growing inequality is the flip side of something else: shrinking opportunity. Whenever we diminish equality of opportunity, it means that we are not using some of our most valuable assets—our people—in the most productive way possible.”
Oh, and about the 43 percent of supposed freeloaders? Well, many of them are due directly to the Bush tax cuts! This is the very definition of chutzpah – murdering your parents and then pleading for leniency because you are an orphan. So, give loopholes so less middle class people pay taxes (largely subsidies for breeding and land ownership), and then berate poor people for not paying enough so you can raise their taxes. The flat tax proposal is much the same – insert loopholes for your rich buddies
[...] The short answer is: deductions and poverty. About half of households within that 47 percent do not end up paying federal income tax because they qualify for enough breaks to cancel their tax obligations out. Of that group, 44 percent are claiming tax benefits for the elderly, like an exemption for Social Security payments. And 30.4 percent are claiming credits for “children and the working poor,” like the child-care tax credit. The remainder get breaks for investment income, spending on education, itemized deductions, and a mish-mash of other things. When combined, it’s all enough to cancel out their income tax requirements.http://www.slate.com/articles/business/moneybox/2011/10/_53_percenters_conservative_campaign_against_americans_who_don_t.html
In short, it is not that they are not paying their taxes. It is that the country’s tax structure lets them off the hook. Indeed, you can draw a straight line between the Bush tax cuts and the growing number of households exempted from income tax. For instance, the 2001 cuts, extended under the Obama administration, doubled the child tax credit from $500 to $1,000 and expanded eligibility for the Earned Income Tax Credit among married taxpayers. Additionally, the Bush tax cuts lowered income taxes in every bracket, making it easier for a household’s liability to get fully offset by deductions and credits. And on top of all that, the stimulus bill introduced a host of further tax cuts.
That covers about half of the households that don’t pay any federal income taxes. The other half of households are just too poor to pay them. The Tax Policy Center provides a handy example: A couple with two children earning less than $26,400 per year pays no income tax if it takes standard deductions and common exemptions, for instance. “The basic structure of the income tax simply exempts subsistence levels of income from tax,” TPC’s Roberton Williams writes.
That pool of too-poor households has grown much bigger because of the recession and its aftermath: Average incomes have kept on declining even though the recession has officially ended, and millions of households have lost one or both of their wage-earners. Households are earning about 10 percent less than they did in 2007. About 12 percent of families live in poverty. That means a lot of folks simply aren’t eligible for income tax.
So what of the claim that the 53 percent are subsidizing the 99 percent? Well, just because 47 percent of households do not pay federal income tax does not mean that they do not pay any federal taxes. Indeed, almost everyone pays some: There are federal taxes for Social Security and Medicare, on gas, alcohol, and cigarettes. Plus, there are also state and local taxes, and property taxes. You’d have to be freegan to escape paying any tax at all.
And then there's this:
From 1979 to 2007, the inflation-adjusted pre-tax incomes of the highest-income 1 percent of families (in 2011, the 1 percent are those with incomes exceeding $441,000) increased 224 percent. Think that’s impressive? The incomes of the top 0.1 percent rose 390 percent. So where does that leave the rest of us?http://www.epi.org/blog/snapshot-income-gains-top-bottom/
For the bottom 90 percent of Americans, incomes grew just 5 percent over the same 28-year period. Whether it’s the bottom 90 percent or the OWS folks’ 99 percent, this much is clear: We have a winner-take-all economy and the substantial rise in economic inequality has prevented the vast majority from improving their living standards in line with what was possible. The nation’s not broke, even if the bottom 99 percent are.