Posted on 08/16/2004 12:53:07 PM PDT by NormsRevenge
WASHINGTON - Over two decades, the income gap has steadily increased between the richest Americans, who own homes and stocks and got big tax breaks, and those at the middle and bottom of the pay scale, whose paychecks buy less.
The growing disparity is even more pronounced in this recovering economy. Wages are stagnant and the middle class is shouldering a larger tax burden. Prices for health care, housing, tuition, gas and food have soared.
The wealthiest 20 percent of households in 1973 accounted for 44 percent of total U.S. income, according to the Census Bureau (news - web sites). Their share jumped to 50 percent in 2002, while everyone else's fell. For the bottom fifth, the share dropped from 4.2 percent to 3.5 percent.
Jobs and the economy top the list of voter concerns this election year. President Bush (news - web sites) touts a strong economy that is growing, but polls find that Americans have doubts and think jobs are scarce. John Kerry (news - web sites) is trusted more on the economy, with Democrats talking regularly of "two Americas," divided between the rich and everyone else.
That argument has merit, some private economists say.
"For those working in the bottom half of the pay scale, they're under an enormous amount of pressure," said Mark Zandi, chief economist at Economy.com.
New government data also shows that President Bush's tax cuts have shifted the overall tax burden to the middle class from the wealthiest Americans.
"We're just trying to get ahead." said Debbie Reames, 49, of Raytown, Mo., whose bank job of 24 years was sent overseas in February. "But it seems like we climb a few rungs and then we fall back again."
Reames has a new secretarial job, which pays $7,000 a year less than her bank job, and she works catering jobs for extra money. Her husband, Russ, can no longer work after an injury. One son is finishing college and another will start in the fall.
So the family budget tightened. That meant fewer cable channels, more meals at home, postponed doctor appointments, missed vacations, delayed credit card payments, all to "keep the wolf away from the door," she said.
The U.S. jobs market is soft, sending wages down. Hiring came to a near standstill last month, with companies adding just 32,000 new jobs overall, stunning economists who had expected seven times as many.
More than a million jobs have been added back to the 2.6 million lost since Bush took office, but they pay less and offer fewer benefits, such as health insurance. The new jobs are concentrated in health care, food services, and temporary employment firms, all lower-paying industries. Temp agencies alone account for about a fifth of all new jobs.
Three in five pay below the national median hourly wage — $13.53, said Sung Won Sohn, chief economist for Wells Fargo.
On a weekly basis, the average wage of $525.84 is at the lowest level since October 2001.
The income gap is showing up in booming sales of luxury items. Porsche Cars North America Inc. says sales are up 17 percent for the year. Strong sales at Neiman Marcus, Nordstrom and Saks Fifth Avenue overshadow lackluster sales at stores such as Wal-Mart, Sears and Payless Shoes.
Real estate agent Lance Anderson, 38, of Overland Park, Kan., expects a record sales year, as homeowners upgrade to more expensive homes and commercial clients expand. He recently took his family to Disney World for a two-week Florida vacation.
"My clientele, it seems as a whole, has seen positive growth," he said. So his family, including three children, now eat out more often and spend more on clothes. They recently bought two new cars and anticipate buying a larger house in the next few years.
Economists say wages should rise as companies boost hiring. But the growing gap between the haves and have-nots will remain.
Technology has eliminated many U.S. jobs, as has global competition, particularly from low-wage countries such as China. Highly skilled, educated workers in America will thrive as demand rises, Sohn said, while low-skilled jobs remain vulnerable to outsourcing.
"This really has nothing to do with Bush or Kerry, but more to do with the longer-term shift in the structure of the economy," Sohn said.
Many Americans own stock, if only through their company's 401K and matching programs. This is propaganda playing on the long-outmoded views of people who just *barely* remember the Depression. In reality, a war against stockholders and against home ownership *is* a war against the middle class, because that's where the vast majority of middle-class assets are tied up.
the part about the tax cut is nonsense of course.
but some of the other points in this article are well taken with regards to wages, offshoring, expansion of lower paying service jobs, etc.
As if the same people are in those same quintiles over that period of time.
Over 2 Decades?
I assume that those 2 decades don't encompass the Clinton years as I'm sure the income gap closed during those 8 years:-)
Most people who are considered "rich" got that way by working hard, not piling up consumer debt by buying crap, living within a budget, resisting the temptations of consumerism and immediate gratification. They didn't get that way by stealing from the poor, scamming shareholders, inheriting it from their corrupt parents or winning the lottery, as the RATs and DUmbasses would have us believe.
Fortunately, evil, wealthy whites and their house African Americans in the, well, House, are able to surpress field hand blacks as they always have, by importing illegal Mexican aliens to do all the entry level jobs. This will keep blacks in a oppressed state and the black racist thugs in control for years to come. The Jesses, Mafoomis, Maxines and Shartons of the country take crumbs but keep the great African American underclass on the job for the neocommunist dems. "Jesse, step on over there and fetch me another julep; that's a good boy. Jesse, you are a credit to your race."
The reason the author chose to compare today to 1973 (30 years ago!) is because the income gap increased much more under Clinton than under GWB. It's actually dropped significantly under Bush, since the wealthy lost so much in the stock market.
Well, quite frankly cable tv is not an essential. We don't bother with it and "more meals at home" - oh the horror! I thought eating out was a luxury and something you did on special occasions. You can't do without going to the doctor, but as for the missed credit card payments - hey stop buying stuff on credit and learn to wait and save.
1) This is not supported by any statistic in the article. Purchasing power of even the poorest fifth has probably increased due to productivity / wage gains / deflation via Wall Mart. But you couldn't prove or disprove the author's absolute statement with any data from the article. The author made it up. It is likely wrong.
2) If recollection serves, 80% of the bottom 20% of wage earners don't stay there. Most of the bottom 20% are recent high-school and college graduates who work their way out of the bottom 20% within 5 years. Also, many of the bottom 20%-ers are retired people who pick up a job because they are bored. How many actually stay in the bottom 20%? Very, very few. This is a highly income-mobile country.
3) Fixing massively high marginal tax rates so that the economy can grow (see: Reaganomics, the current state of Economics) results in high earners keeping more of what they earn, and lifting all boats simultaneously. The author failed to provide a purchasing-power-index example that supports his claim that the bottom 20% are worse off. It is likely that the top 20% got better off faster, which is a reason for income disparity and its growth. But that is not the same as the bottom 20% becoming worse off. According to many surveys, the bottom 20% became better off, just more slowly. Just goes to show: Socialists prefer everyone be equally miserable rather than some being extra happy.
4) This is a U.S. centric study. World-wide, we (Amerca and our policies of free trade) have lifted billions of people out of poverty, while our own lifestyles have improved (see longevity as one of many examples). While it is not necessarily the job of U.S. politicians to create a climate in which foreigners can succeed, it is certainly a salutory effect of good world-leadership. Let's include the Chinese, Indian, Indonesian, South American, etc. people who have come from starvation into the middle class, and re-run those numbers.
I challenge the author to come up with one objective, normalized statistic that shows Americans worse off in 2004 compared to 1980. I know of none.
Freeking hatchet job by a journalism / communications major.
Just GOT to 'equalise'(destroy the superior part of?) the gene pool?
"United Nations, Kofi Annan Strongly Condemn Israel, All Jews Everywhere Ever." :)
The amazing thing is there are many-- even here in the FR--- that believe this nonesense!
I just wonder how much of the wealth redistribution went to trial lawyers I keep hearing of Billions.
Problem is, then he is a millionaire and John-John will be after all his ill gotten gains....
Read chapter3 THE REVOLT OF THE RICH in the book THE NEXT AMERICAN REVOLUTION. Best chapter I ever read. Basically, the rich used the various civil rights movements to undo the NEW DEAL. and sure enough, we have minority and civil rights galore, with income inequality not seen since the 1920's.
What do these dimwits think will happen? That someone who is an average factory worker will earn as much as a doctor, lawyer, or someone trained in computer technology? The question is not that there will be disparities in wealth accumulation, the question is do average Americans have opportunities to increase their personal wealth with hard work and smart choices. The answer is unequivocally yes!
And how many cable channels did they have in 1973?
Tax the Rich !
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.