On September 20, 2013, Karin Kamp writes on Moyers & Company:
A typical American household made about $51,017 in 2012, according to new figures out from the Census Bureau this week. That number may sound familiar to anyone who remembers George H. W. Bush’s first year as president or Michael Jackson in his prime. That’s because household income in 2012 is similar to what it was in 1989 (but back then it was actually higher: you had an extra $600 or so to spend compared to today).
That sobering statistic gives an indication of where the American middle class appears to be headed. Take a look below at a snapshot of where the middle class is now, the problems they face and what our Facebook audience has to say about squeaking out a living these days.
A note on the term “middle class”: There is no single, universal definition so we turned to economic analyst Robert Reich – who spoke to us this week – for some direction. Reich suggested defining middle class as those with income levels 50 percent above and below the median income. Median is a term that means the “middle of the middle.” Median earnings are a key indicator of how the middle class is doing.
A Snapshot
The income range to be considered middle class:$25,500 – $76,500
The median middle class household income in 2012: $51,017
and in 1989: $51,681Year inflation-adjusted median household income peaked at $56,080: 1999
Income needed in a two parent, two child home in St. Louis for an adequate living standard: $64,673
and in New York City: $94,676The Problem
Share of self-described middle-class adults who say it’s more difficult now than a decade ago for middle-class people to maintain their standard of living: 85
Percentage of Americans that consider themselves to be “lower class” (the highest percentage ever):8.4
Percentage increase in salary growth for the median worker from 1979 to 2012: 5
Percentage drop in average real income per family since 2007: 8.3
The median net worth of a family in 2010: $77,300
and in 2007: $126,400Percentage of Americans that are unemployed/underemployed rate: 14
Number of states in which poverty rates rose between 2007 and 2010: 46
Approximate poverty rate from 2009 to 2012: 15
The last time it remained at or above 15 percent for three years running: 1965
The Work
Average number of hours U.S. workers put in annually: 1,790
what the Norwegians work: 1,420
and the French: 1,479Percent increase in productivity from 1979 to 2012: 75
What the median middle-class income ($51,017) would be if wages grew at the same rate: $77,131
(Check out this handy tool from EPI to see what your income would be if it had kept up with productivity.)Number of guaranteed days of paid vacation given to U.S. workers: 0
Number of vacation days U.S. workers are entitled to, but don’t take, in a typical year: 175 million
Number of paid maternity days in Germany: 98 (100% pay)
Number of paid maternity days in France: 112 (100% pay)
Number of paid maternity days in U.S.: 0Number of industrialized countries that do not mandate paid maternity leave: 1
(yes, the U.S. is the only one that does not require paid leave.)The Costs
Average out-of-pocket health care expenses per household in 2012: $3,600
and in 2011: $3,280
and in 2005: $2,035Average amount needed to send a child to an in-state college for the 2012-13 academic year: $22,261
and for a private college: $43,289Percentage of Americans near retirement with less than $30,000 in their retirement accounts: 75
Percentage increase in housing prices since 1990: 56
Share of Americans that do not have enough money saved to pay their bills for six months: 3/4
The Inequality
Percentage of income gains captured by the top 1 percent in the first three years of the economic recovery: 95
Percentage income growth since 1967 for the top 5 percent of earners: 88
and for the top 20 percent of earners: 70
and for middle-income households: 20Average income of top 1 percent: $1.2 million
Average net worth of the top 1 percent: $16.4 million
The share of wealth held by the richest 400 Americans: 1/2
The median household net worth in 2010: $57,000
and in 1983: $73,000Percentage of the 1 percenters who said they were “middle class at heart”: 76
The total number of Americans living in poverty — with incomes of $23,492 for a family of four or $11,720 for an individual: 46.5 million
The reality is that middle class wealth, for the most part, is the value of their primary residences. On average their retirement plans, for those who have one, only have an average of $30,000. The middle class is the engine of consumer spending, and as a result have spent (with directly earned monies and consumer debt) itself virtually into oblivion with increasing indebtedness and income security. Those whose job earnings have enabled them to save, beyond expending income to pay necessary day-to-day and month-to-month living costs, have faired a bit better. But even so, though millions of Americans own diluted stock value through the “stock market exchanges,” purchased with their earnings as labor workers, their stock holdings are relatively miniscule, as are their dividend payments compared to the top 10 percent of capital owners. On the other hand, the rich are rich because they own wealth-creating, income-generating productive capital assets which earn them dividends, rent, and interest income. Thus their income gains are due to equity market valuations and major business ownershipt.
This difference or inequality is a matter of OWNING productive capital assets versus NOT OWNING and solely dependent on a job for income. As tectonic shifts in the technologies of production will continue to transpire, jobs will further be destroyed (which increases the number of people seeking employment) and the worth of labor devalued, as well as by globalization, which shifts employment to other countries where labor is less costly as well as regulations and controls.
Conventional economists continue to confuse the incomes that the wealthy rich class earn with the incomes earned from labor. What needs to be STRESSED is that the reason the rich are rich is because their earnings are generated by their ownership of wealth-creating, income-generating productive capital assets––not a job! Labor workers ONLY have a job (and increasingly less opportunity for good-paying jobs) as their source of income. And if they are creditworthy they will have managed to finance and pay for the purchase of a primary residence, which at the end of 30 or so years is the asset of their lifetime. But they dare not sell this asset (because they always need a roof over their heads) unless they can re-purchase another residence that meets their housing needs at less cost and benefit financially from a capital gain earning. But most Americans never even achieve this small degree of financial security and continuously live financially insecure their entire life.
This deplorable situation will worsen as long as we as a nation fails to address the REAL problem at the root of income inequality and poverty––CONCENTRATED OWNERSHIP of wealth-creating, income-generating productive capital. And to advocate for solutions that systematically broaden private sector individual ownership of the formation of FUTURE productive capital investment to empower EVERY American to accumulate over time a viable capital trust (super-IRA) portfolio of stock in diversified companies and reap the full earnings payout of corporate earnings as dividend income to support their livelihood and retirement. Such economic policy will build REAL financial security and wealth assets that generate annual incomes.
What is needed is leadership and government policies that result in the enrichment of EVERY citizen, not just those who already OWN America. How to achieve this solution is outlined in “Financing Economic Growth With ‘FUTURE SAVINGS’: Solutions To Protect America From Economic Decline” at NationOfChange.org http://www.nationofchange.org/financing-future-economic-growth-future-savings-solutions-protect-america-economic-decline-137450624 and “The Income Solution To Slow Private Sector Job Growth” at http://www.nationofchange.org/income-solution-slow-private-sector-job-growth-1378041490.
http://billmoyers.com/2013/09/20/by-the-numbers-the-incredibly-shrinking-american-middle-class/
