Income Growth Over Time

[EastMed]

When income grows, who gains?

(You can use the two sliders to select any period from 1917 to 2008


http://www.stateofworkingamerica.org/pages/interactive#/?start=1917&end=1918

 

[palemale]

When income grows, who gains?

(You can use the two sliders to select any period from 1917 to 2008


http://www.stateofworkingamerica.org/pages/interactive#/?start=1917&end=1918

What is particularly interesting about this chart is to see the differences during Democratic verse Republican administrations. For the most part, under FDR, Kennedy/Johnson, the bottom 90% get approximately 67%-75% of the income growth. Under Reagan, the opposite is true.

I also compared the 25 years after FDR's election to the 25 years after Reagan's election. The results, after FDR the richest 10% of the population got 26% of the income growth, while the bottom 90% got 74% of income growth. Twenty-five years after Reagan, the richest 10% of the population got 90% of income growth, the bottom 90% got 10% of income growth. As people honor Reagan on his 100th birthday, we ought to remember that Ronald Reagan was the beginning of the end of the middle-class and broad-based prosperity. I'd like to piss on his grave.

 

[T-Rexx]

That's a remarkable graph.

Average incomes declined over the GWB years by $432, but incomes of the richest 10% grew. Not surprisingly we got a depression (depressions happen when too much money becomes concentrated in the hands of too few).

The gap between the rich and the poor in the USA is now worse than many third world countries. We are a banana republic.

And the Republicans keep demanding more bananas!

 

[Kulindahr]

That's pretty damning. All the way along, the upper ten percent keep gaining. There's something wrong with a system that does that.

 

[Harke the Boeotarch]

^ Not if you're one of the 10%.

 

[Zeno Lorea]

The rich get richer and the poor get pregnant.

 

[cityboy-stl]

So according to the graph in the past 20 years the richest 10% received 96% of the income growth and the rest of us received 4%. Will one of the republicans on this board please explain how this is not the government sponsored wealth redistribution that you rant and rave against - because I don't get it?

 

[thermodynamics]

This is a very serious problem that we seem unwilling to fix.

 

[Kulindahr]

So according to the graph in the past 20 years the richest 10% received 96% of the income growth and the rest of us received 4%. Will one of the republicans on this board please explain how this is not the government sponsored wealth redistribution that you rant and rave against - because I don't get it?

This should be good.

 

[palemale]

Nah. Any substantive questions put to the JUB conservatives is answered by crickets.

 

[jackoroe]

I'm actually getting pretty good at smelling a George Soros sponsored group. This one smelled particulary badly. EPI, an admittedly "progressive" organization took $3 million from Soros.

Through his charity, the Open Society Institute, Soros funds groups such as ACORN that are among the most influential in America.
Since 1999, OSI has given grants to John Podesta's Center for American Progress ($1.8 million), Center on Budget and Policy Priorities ($3.7 million), Economic Policy Institute ($3 million), Institute for America's Future ($965,000), and the Center for Policy Alternatives ($1.4 million). In the same period OSI has given Tides Foundation and Tides Center, which distribute often-anonymous grants to radical and anti-American groups, a staggering $20.8 million.

http://spectator.org/archives/2009/11/04/killing-capitalism-soros-style/print

So, let's be aware of the screwball leanings of the source we're dealing with. And now that we are, so what? The source would have us believe that wealth in terms of income is static. It isn't a pie with a finite number of slices, anyone can create wealth. Ask Bill Gates or Steve Jobs. They didn't bemoan the fact that others had more than they did, they created a product or service that people wanted to buy. America isn't about equality of outcomes. Never has been.

If you look at overall wealth, which is a far more telling number than just income, it really isn't all that different than what it was in 1922. The really rich control about 34% and everybody else has about 66%. Oddly enough, the most equitable time in the chart isn't during the great income redistribution of FDR's administration. But in 1976 when Gerald Ford was President. The rich controlled just 20% of the wealth and everybody else had 80% of all the wealth.

Table 3: Share of wealth held by the Bottom 99% and Top 1% in the United States, 1922-2007.
Bottom 99 percent Top 1 percent
1922 63.3% 36.7%
1929 55.8% 44.2%
1933 66.7% 33.3%
1939 63.6% 36.4%
1945 70.2% 29.8%
1949 72.9% 27.1%
1953 68.8% 31.2%
1962 68.2% 31.8%
1965 65.6% 34.4%
1969 68.9% 31.1%
1972 70.9% 29.1%
1976 80.1% 19.9%
1979 79.5% 20.5%
1981 75.2% 24.8%
1983 69.1% 30.9%
1986 68.1% 31.9%
1989 64.3% 35.7%
1992 62.8% 37.2%
1995 61.5% 38.5%
1998 61.9% 38.1%
2001 66.6% 33.4%
2004 65.7% 34.3%
2007 65.4% 34.6%
Sources: 1922-1989 data from Wolff (1996). 1992-2007 data from Wolff (2010).

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

 

[palemale]

Thanks for the post and cite, Jack. I'm not sure what your point is, however, because the article you cite presents a pretty damning portrait of the United States with regard to wealth distribution and income inequality. For example, Table 7 in the article shows that, with regard to income inequality in the world, the United States ranks 93rd out of 134 studied. Only 41 countries were worse.

Also, the person who did the studies you cite in the table updated his numbers, which showed that the top 1% increased their wealth to 35.6% by the end of 2009 from 34.6% in 2007. http://blogs.wsj.com/wealth/2010/04/30/top-1-increased-their-share-of-wealth-in-financial-crisis/

The article also included the following findings, which are truly alarming:

The Wealth Distribution

In the United States, wealth is highly concentrated in a relatively few hands. As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth (total net worth minus the value of one's home), the top 1% of households had an even greater share: 42.7%. Table 1 and Figure 1 present further details drawn from the careful work of economist Edward N. Wolff at New York University (2010).

Table 1: Distribution of net worth and financial wealth in the United States, 1983-2007
Total Net Worth
Top 1 percent Next 19 percent Bottom 80 percent
1983 33.8% 47.5% 18.7%
1989 37.4% 46.2% 16.5%
1992 37.2% 46.6% 16.2%
1995 38.5% 45.4% 16.1%
1998 38.1% 45.3% 16.6%
2001 33.4% 51.0% 15.6%
2004 34.3% 50.3% 15.3%
2007 34.6% 50.5% 15.0%

Financial Wealth
Top 1 percent Next 19 percent Bottom 80 percent
1983 42.9% 48.4% 8.7%
1989 46.9% 46.5% 6.6%
1992 45.6% 46.7% 7.7%
1995 47.2% 45.9% 7.0%
1998 47.3% 43.6% 9.1%
2001 39.7% 51.5% 8.7%
2004 42.2% 50.3% 7.5%
2007 42.7% 50.3% 7.0%

Total assets are defined as the sum of: (1) the gross value of owner-occupied housing; (2) other real estate owned by the household; (3) cash and demand deposits; (4) time and savings deposits, certificates of deposit, and money market accounts; (5) government bonds, corporate bonds, foreign bonds, and other financial securities; (6) the cash surrender value of life insurance plans; (7) the cash surrender value of pension plans, including IRAs, Keogh, and 401(k) plans; (8) corporate stock and mutual funds; (9) net equity in unincorporated businesses; and (10) equity in trust funds.

Total liabilities are the sum of: (1) mortgage debt; (2) consumer debt, including auto loans; and (3) other debt. From Wolff (2004, 2007, & 2010).

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

So, to answer the question posed by your cited article, "who rules America," it seems to me the answer is a cabal of greedy, blood-sucking capitalists. Wouldn't you agree?

 

[jackoroe]

The point is, that the rich have been pretty consistent in the amount of wealth they control over the long haul. There's nothing really new here except the intent to create class warfare by the anti-capitalists of the world, led by people like Soros.

You seem to side with the group that would have us believe that the amount of wealth or income we can create is finite. What is it that prevents you from making more money, if that's what you want? The answer is nothing. You simply need an idea that fills a need of consumers and the will to bring it to market.

It makes no more sense to hate the wealthy, than it does the poor.

 

[palemale]

The point is, that the rich have been pretty consistent in the amount of wealth they control over the long haul. There's nothing really new here except the intent to create class warfare by the anti-capitalists of the world, led by people like Soros.

You seem to side with the group that would have us believe that the amount of wealth or income we can create is finite. What is it that prevents you from making more money, if that's what you want? The answer is nothing. You simply need an idea that fills a need of consumers and the will to bring it to market.

It makes no more sense to hate the wealthy, than it does the poor.

The wealthy have rigged the system to hold onto their wealth. They can then use that wealth to own politicians in both parties, especially the Republican Party, to pass laws that entrench their power and wealth. Of course they very generously pay the poor and working class to fight and die in wars that help them make money and exploit the poor and working class of other countries. But hey, why hate them for that?

For just one small example of how the system is rigged, look at the following explanation of how corporations set executive compensation from the article you cite:

If you wonder how such a large gap could develop, the proximate, or most immediate, factor involves the way in which CEOs now are able to rig things so that the board of directors, which they help select -- and which includes some fellow CEOs on whose boards they sit -- gives them the pay they want. The trick is in hiring outside experts, called "compensation consultants," who give the process a thin veneer of economic respectability.

The process has been explained in detail by a retired CEO of DuPont, Edgar S. Woolard, Jr., who is now chair of the New York Stock Exchange's executive compensation committee. His experience suggests that he knows whereof he speaks, and he speaks because he's concerned that corporate leaders are losing respect in the public mind. He says that the business page chatter about CEO salaries being set by the competition for their services in the executive labor market is "bull." As to the claim that CEOs deserve ever higher salaries because they "create wealth," he describes that rationale as a "joke," says the New York Times (Morgenson, 2005, Section 3, p. 1).

Here's how it works, according to Woolard:

The compensation committee [of the board of directors] talks to an outside consultant who has surveys you could drive a truck through and pay anything you want to pay, to be perfectly honest. The outside consultant talks to the human resources vice president, who talks to the CEO. The CEO says what he'd like to receive. It gets to the human resources person who tells the outside consultant. And it pretty well works out that the CEO gets what he's implied he thinks he deserves, so he will be respected by his peers. (Morgenson, 2005.)

The board of directors buys into what the CEO asks for because the outside consultant is an "expert" on such matters. Furthermore, handing out only modest salary increases might give the wrong impression about how highly the board values the CEO. And if someone on the board should object, there are the three or four CEOs from other companies who will make sure it happens. It is a process with a built-in escalator.

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

 

[EastMed]

For wealth inequality see here

http://extremeinequality.org/?page_id=8

Source from Federal Reserve Board, et al.

 

[Kulindahr]

The wealthy have rigged the system to hold onto their wealth.

They also have it rigged to make wealth trickle upward, so that they pay less and earn more when they do the very same things people lower on the ladder do. I've been looking at banking costs, and it's astounding how much the poor are charged in fees just for being poor, and how many fees are waived for the rich, merely because they're rich. It isn't just a matter that someone taking a $50k certificate of deposit earns twice the interest of someone taking a $5k one, or that someone with deposits of over $250k can get a loan at lower interest than someone with deposits of $2.5k, it's fees coming from the right and left at people who live paycheck to paycheck when those fees are waived completely if you have deposits over some figure, often $10k. Looking at a couple local banks, here are some fees the poor have to pay but are waived for the wealthy:

overdraft fee ($49)
late payment fee ($49)
insufficient payment fee ($39)
late deposit fee ($39)
change of address fee ($29)
low balance fee ($30)
low activity fee ($30)
check/debit card fee ($49/yr)
money order fee ($19 or 3%)
cashier's check fee ($29 or 3%)
balance transfer fee ($29)


Beyond those, if I want to buy a new car, if I have fewer than four accounts and a total balance of less than $25k, the best rate I can get on a loan is 7.9% -- but if I have five or more active accounts and a balance of $100k or above, I can get a loan for the same exact vehicle at 3.24%.


Spin it as you wish; these are nothing but charging the poor for merely being poor and rewarding the rich for merely being rich. Conservatives love to talk about an attitude of entitlement, but here's a very real one they overlook: the conviction of the rich that they are entitled to fleece everyone else, entitled to behave irresponsibly, entitled to manipulate the system -- and be both rewarded and honored for it.


And the fact that the top 1% of the people in this country could jointly write checks to totally rebuild the country's transportation infrastructure (for example) and not even notice the money was gone, yet do nothing of the sort, tells me they consider the United States of America not something they love or have any loyalty to, but a playground for their convenience and amusement.

 

[Jack Springer]

Yes, always look at the "about" section of a web site -- and usually do a little more digging.

The majority of the board of directors are the heads of America's unions.

So the web site will have an agenda - you have to keep that in mind.

 

[maxpowr9]

Spin it as you wish; these are nothing but charging the poor for merely being poor and rewarding the rich for merely being rich. Conservatives love to talk about an attitude of entitlement, but here's a very real one they overlook: the conviction of the rich that they are entitled to fleece everyone else, entitled to behave irresponsibly, entitled to manipulate the system -- and be both rewarded and honored for it.

Normally, I would side with you on economic issues but I stand against you here. You are blinded by your own hatred to see the truth. It comes down to one word: risk. Low income people typically have low credit scores due to either defaulting on a loan, making late payments or little diversity in assets. Wealthy people usually have good credit scores for the opposite reasons and therefore, have the ability to get lower rates due to being less risky.

Sure it kind of sucks with the current system but it is makes sense from a business standpoint.

 

[palemale]

Sure it kind of sucks with the current system but it is makes sense from a business standpoint.

So does child labor, indentured servitude and dumping toxic waste in the rivers, but we don't tolerate any of that.

 

[Kulindahr]

So does child labor, indentured servitude and dumping toxic waste in the rivers, but we don't tolerate any of that.

Add bribery and kickbacks to that list.

It is an inequitable system, and that is anti-liberty. And when fees are charged to one person and not to another, for the same exact thing, that is corruption, pure and simple. That it is set up to fleece the poor and use the take to reward the rich is all the more despicable.