On September 19, 2013, Jason Notte writes on MSN Money:
The Census Bureau’s poverty report issued earlier this week included some income statistics that were a bummer for middle-class families hoping for a return of the good old days of prosperity. Turns out that even in those days, families were bringing in roughly the same as now.
According to the Census Bureau, median annual household income in the U.S. in 2012 was $51,017, less than the 2011 median of $51,100. That 2011 number followed two straight years of decline and is nowhere near the $56,080 average salary from 1999. In fact, 2012’s real median household income is still 8.7% lower than it was in 2007, just before the recession.
Even by those mileposts, the news is discouraging for the middle class. But before those relative boom years just before the crash of the early 2000s and the absolute cratering of 2008, median income in 1989 — right before the recession of the early ’90s — was an inflation-adjusted $51,681, according to The Washington Post’s Wonkblog.
That means middle-class families have not gained any ground in the past 24 years. Worse, they actually lost more than 600 bucks over that time. The price of the average movie ticket then was $4, compared with $8 now. And the price of a gallon of gas hovered around a dollar, compared with the $3.60 average now. But sure, why not dock middle-class families a few Benjamins and see how the economy likes it?
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 fail 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.
