household net worth middle-class income wealth lower class

US Poverty -- Record Numbers Persist
median household safety net richer poorer wealth gap disparity

US Incomes Fall to 1989 Levels. How Did That Happen?

For much of America, the economic downturn has produced not one lost decade but two. At least the Brits are talking about a real solution. We trim, blend, and append six 2012 articles on maldistribution of income from: (1) Los Angeles Times, Spt 11, by T. Hsu; (2) AP, Spt 12, by H. Yen; (3) Los Angeles Times, Spt 16; (4) Los Angeles Times, Spt 11, by D. Lazarus; (5) CS Monitor, Spt 12, by M. Trumbull; and (6) Ekklesia by B. Meaden.

by Tiffany Hsu, by Hope Yen, by LAT Editors, by David Lazarus, by Mark Trumbull, and by Bernadette Meaden

The number of Americans who consider themselves to be in the lower class is growing, rising to a third of Americans from a quarter four years ago.

Those who place themselves on the lower income rungs tend to be more pessimistic and stressed and less secure and satisfied than their better-off peers.

The group of people ages 18 to 29 who consider themselves in the lower class ballooned in 2012 to nearly 40% from 25% in 2008. The percentage shrinks with age -- only 20% of Americans of retirement age feel the same.

Democrats are more likely than Republicans to assign themselves to the bottom social circle -- a third say they meet the criteria, from 29% in 2008. But the number of self-described lower-class Republicans soared to 23% from 13%.

Less than 30% of the middle and upper classes had trouble paying bills last year; 64% of lower income people struggled to do so.

To read more

The ranks of America's poor remained stuck at a record level last year while household income dropped.

For last year, the official poverty line was an annual income of $23,021 for a family of four.

By total numbers, roughly 46.2 million people remained below the poverty line last year, unchanged from 2010. That figure was the highest in the more than half a century that records have been kept. The 15 percent poverty rate was about the same as it was in 1993 and was the highest since 1983.

Sparsely populated New Mexico had the highest share of poor people, at 22.2 percent. New Hampshire, which levies only a property tax and that includes both a tax on buildings [counterproductive] and on land [a stimulus], had the lowest, at 7.6 percent.

In the middle portion of the income distribution, middle-class Americans with earnings between $20,000 and $62,000 received less of the nation's total income, taking in just 23.8 percent, a new low. In 1980, the share taken in by similar middle-income groups was 29 percent.

To read more

More Americans would have been impoverished last year if not for federal and state governments' spending on safety net programs.

The rising tide of the U.S. economy hasn't lifted all boats. The 20% of Americans with the highest incomes captured an even larger share of the earnings in 2011, while the rest collected the same share or less.

The vast majority of Americans continue to see their fortunes slide. In 2011 the median income fell for the fifth year in a row. It fell for all four ethnic groups tracked by the census and for women and men alike.

As long as the fruits of the recovery are modest and reaped mainly by the highest incomes, the median income will continue to drop and the poverty rate won't go down.

In the meantime, though, lawmakers should resist the impulse to cut spending on unemployment benefits, tax credits and other targeted aid to the poor. The demand for that aid will drop on its own once the economy is back at full strength, but we're not there yet.

To read more

The rich aren't just getting richer. They're getting a lot richer.

And you're getting poorer.

The wealth gap between the richest Americans and the typical family more than doubled over the past 50 years.

The top 1% had 125 times the net worth of the median household as of 1962. But by 2010, the disparity reached 288 times.

The median household saw its net worth drop to $57,000 in 2010, down from $73,000 in 1983. It would have been closer to $119,000 had wealth grown equally across households.

The top 1%, meanwhile, saw their average wealth grow to $16.4 million, up from $9.6 million in 1983.

What's to be done? Tax reform.

To read more

The economic downturn has produced not one lost decade but two.

But the federal safety-net programs helped keep people out of poverty.

The typical US household saw its income fall last year to 1989 levels.

Median incomes fell 1.5 percent in 2011, while the official poverty rate remained essentially unchanged at 15 percent.

A family right in the middle of the income spectrum had an income of $50,054, which is actually lower than the 1989 median level of $50,624 expressed in 2011 dollars.

Why the hard times? And what can be done about it?

Those questions were already urgent before this latest data release.

Technology and globalization change the nature of jobs. Many middle-wage jobs can be automated and outsourced.

A wage premium for the educated, the decline of labor unions, and the failure of the minimum wage to keep up with inflation have been among the factors widening the income gap between the rich and the middle class or poor.

Some say the rising level of public debt [mainly for war] is an obstacle. Others cite high levels of regulation and "crony capitalism," in which government policies favor some industries or companies at the expense of others.

Two other factors are demographic aging of the population (income typically goes down as people hit retirement age) and a skewing of new jobs in 2011 toward the lower end of the wage spectrum.

Many argue for stronger education, better matching of skills with job opportunities, and an effort to overhaul the nation's fiscal policy, including taxes.

Some 21.4 million Americans would be in poverty were it not for Social Security income, including 14.5 million people over age 65 and others who are on disability insurance.

To read more

JS: Most commentators argue for jobs, schools, and taxes. However, make-work jobs don’t create a surplus and waste a human being’s life. Schools have lots of room for improvement in the relevancy department but there’s already a glut of PhDs driving cabs. And taxes taking from the rich, giving to the poor while charitable fails to distinguish between individual earnings and individuals merely corralling an unfair share of the common wealth. One factoid of note above is that America’s least poor state is the state with a quasi land tax.

Church Action on Poverty is currently bringing the debate to towns and cities up and down the country through its Tax Justice tour.

For Christians, and all people of faith, there could hardly be a fairer tax than a land tax. If we believe that the earth was created for everybody to share equally, it is hard to justify a small elite benefiting exclusively from large parts of it.

As John Stuart Mill said: "Landlords grow rich in their sleep without working, risking or economising. The increase in the value of land, arising as it does from the efforts of an entire community, should belong to the community and not to the individual who might hold title."

To read more

JS: And as Henry George noted so long ago, progress always brings poverty. The only solution is to quit leaving so much wealth on the table where an elite few grab it by hook or crook, enriching themselves at the expense of everyone else.

People must get over the phony requirement that all income must come from labor. Already, people tacitly acknowledge all income can not come from labor, when they pass minimum wage and go on strike, making evident that politics must pad the paycheck of jobs where the value of the labor is not enough. And the rich don't get rich by contributing labor of exceedingly high value; they're just better connected and benefit from corporate welfare, tax loopholes, and the like. No, in reality, a fair income and a socially-useful job only somewhat overlap. Hence we need an income apart from our labor, one from our society's land.

Society must recover its own values -- the values it imparts to sites and resources -- and share them, which can be done by disbursing Citizens’ Dividends (a la Alaska’s oil share) or by trying to spend the public revenue fairly on social programs that benefit all equally (not an easy task).

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Editor Jeffery J. Smith runs the Forum on Geonomics and helped prepare a course for the UN on geonomics. To take the “Land Rights” course, click here .

Also see:

A New Heresy -- Abolish Corporate Income Taxes
http://www.progress.org/2011/bracket.htm

If the state won’t collect the commonwealth …
http://www.progress.org/2011/localtax.htm

US rich see taxes drop dramatically yet …
http://www.progress.org/2011/luxury.htm

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