The economy in 2013: The rich got richer

Here’s something for someone who is middle class and anti-union to consider:

The decline of unions — 11.3 percent of workers were represented in 2012 compared with 20.1 percent in 1983 — has advantaged bosses at the expense of their employees.

Why does this matter?

Even those with college degrees are having trouble keeping up, he said. While they earn more than those with less schooling, they’ve seen no real wage growth in recent years. The median income of men 25 years of age and older with a bachelor’s degree was $56,656 last year, 10 percent less than in 2007 after taking account of inflation, according to Census data.

Surely someone did well last year. Stock prices set an amazing number of records:

[R]ecord-high stock prices are enriching wealthier Americans, exacerbating polarization and bringing income inequality to the political forefront. Even independent government agencies like the Securities and Exchange Commission and the Federal Reserve have been dragged into the debate. …

The richest 10 percent of Americans earned a larger share of income last year than at any time since 1917, according to Emmanuel Saez, an economist at the University of California at Berkeley. Those in the top one-tenth of income distribution made at least $146,000 in 2012, almost 12 times what those in the bottom tenth made, Census Bureau data show.

Read the whole article at Bloomberg.

 

Workers were paid more in the 1970s

Robert Reich, the labor secretary during the Clinton administration, has a documentary out called “Inequality for All.” It focuses on the nations growing economic inequality.

The most frustrating revelation in the documentary though is the realization that a worker was better paid and had more economic opportunity 40 years ago than today.

If you get a chance, go see the movie. But do it quickly. If it arrives in your city, it won’t be there very long. The multiplexes are making room for the holiday fare you’ll go to see in order to forget your financial problems.

 

Representative income inequality

Can a congressman be concerned with income inequality when his income has risen faster than that of his constituents?

From the Washington Post:

Between 1984 and 2009, the median net worth of a member of the House rose by more than 21/2 times, according to the analysis of financial disclosures, from $280,000 to $725,000 in inflation-adjusted 2009 dollars, excluding home ­equity.

Over the same period, the wealth of an American family has declined slightly, with the comparable median figure sliding from $20,600 to $20,500, according to the Panel Study of Income Dynamics from the University of Michigan.

The accompanying charts on the net worth of senators and representatives is worth taking a look at. Both chambers are filled with millionaires, which leaves you with the impression that the odds are totally against an average person being able to successfully run for a seat.

All you need to know about class warfare

Check out this episode of “The Daily Show,” where Jon Stewart tears apart the idiots at Rupert Murdoch’s Fox News and Fox Business channels for saying it’s unfair to tax the rich because the poor don’t pay their “fair share” of taxes.

Then go to this clip from PBS that shows most Americans are out of touch with income inequality in the U.S. When presented with three charts, they thought Sweden‘s distribution was where America stood. As for the chart that represented America’s distribution, most people though it was a chart for a Third World country. (Just for the record, the third chart, where things were distributed equally, was idiotic, and people who selected that one shouldn’t be allowed to operate heavy machinery.)

There is no excuse for anyone not understanding what the distribution of wealth is in this country.

Here’s a chart posted on various blogs back in February:

The truth is out there. Not the “truth” created by Fox News, but the thing rational people call reality.

If your world view has been shaped by Fox, and if you fall for the GOP line that the rich are under assault and the poor are a bunch of freeloaders, you are a sad, sad human being.

Class warfare: The rich have already won

I’ve been harping on this for a while.

For years, statistics have depicted growing income disparity in the United States, and it has reached levels not seen since the Great Depression. In 2008, the last year for which data are available, for example, the top 0.1 percent of earners took in more than 10 percent of the personal income in the United States, including capital gains, and the top 1 percent took in more than 20 percent. But economists had little idea who these people were. How many were Wall street financiers? Sports stars? Entrepreneurs? Economists could only speculate, and debates over what is fair stalled. …

The top 0.1 percent of earners make about $1.7 million or more, including capital gains. Of those, 41 percent were executives, managers and supervisors at non-financial companies, according to the analysis, with nearly half of them deriving most of their income from their ownership in privately-held firms. An additional 18 percent were managers at financial firms or financial professionals at any sort of firm. In all, nearly 60 percent fell into one of those two categories.

One other thing to consider. It appears that 40 years ago, the executive class had more integrity than it does today. This is a look back at the 1970s when Dean Foods, a dairy company, was run by Kenneth Douglas, who made a handsome $1 million a year (in today’s dollars), not much by current executive standards:

Most years, board members at Dean Foods wanted to give Douglas a raise. But more than once, Douglas, a former FBI agent who literally married the girl next door, refused.

“He would object to the pay we gave him sometimes — not because he thought it was too little; he thought it was too much,” said Alexander J. Vogl, a member of the Dean Foods board at the time and the chair of its compensation committee. “He was afraid it would be bad for morale, him getting a big bump like that.”

Read the full Washington Post story. If you’re not in that top bracket, things don’t look good for you.