U.S. Census Data Shows Vast Accumulation of Wealth By a Relative Handful; the Midwest Has Been Especially Ravaged by the Economic Slump
2009 Income Gap in the U.S. Highest on Record
Socialist Equality PartySeptember 29, 2010
Figures released Tuesday by the US Census Bureau reveal sharply worsening conditions for tens of millions of Americans under the impact of the economic crisis and the accumulation of vast wealth by a relative handful.
Some of the figures, for particular states and regions, are simply staggering. Michigan residents experienced a 6.2 percent decrease in median income in the course of one year, from 2008 to 2009, while Illinois has suffered a 24 percent increase in poverty in the past decade. More than 36 percent of Detroit’s population officially lives in poverty.
Overall, the 2009 American Community Survey reveals that median household income fell in the US nearly 3 percent between 2008 and 2009, from $51,726 to $50,221. This was the second consecutive year in which household incomes dropped. Median income declined in 34 states, and increased only in sparsely populated North Dakota.
“Thirty-one states saw increases in both the number and percentage of people in poverty between 2008 and 2009,” reported the Census Bureau in a press release. “No state had a statistically significant decline in either the number in poverty or the poverty rate.”National median income is down 4 percent from its peak when the recession officially began in December 2007. Last year alone, noted the Washington Post, accounted for $1,500 of that average loss.
The Associated Press, based on an analysis of the Census Bureau numbers, reports that,
The income gap between the rich and the poor “grew last year to its widest amount on record as young adults and children in particular struggled to stay afloat in the recession.”The US also has the greatest income disparity among the advanced capitalist countries.
The proportion of Americans living in extreme poverty, defined as half the derisory official poverty line, or $10,977 for a family of four, rose from 5.7 percent in 2008 to 6.3 percent last year, an 11 percent increase in the number of people living in dire circumstances in one year. The 2009 figure was the highest level since the US government began tracking the very poor in 1975. To the everlasting shame of the American political establishment, the District of Columbia, home to the US government, has the highest proportion of residents living in extreme poverty of any state or district, 10.7 percent.
The top 20 percent of the population, those making more than $100,000 a year, took in nearly 50 percent of all income generated in the US in 2009,
while the 44 million people living below the poverty line received only 3.4 percent.“That ratio of 14.5-to-1 was an increase from 13.6 in 2008 and nearly double a low of 7.69 in 1968” (AP).The top 5 percent of the US population in terms of income, those making $180,000 or more, added slightly to their annual incomes last year.
The most revealing statistics, however, relate to the wealthiest 1 percent, 1/10 of 1 percent and 1/100 of 1 percent of the population—no news about their gains in 2009 has been reported yet.
New York, Connecticut, Texas and the District of Columbia, along with the territory of Puerto Rico, had the largest gaps between rich and poor. Similar income gaps, reported AP, existed in major cities such as New York, Miami, Los Angeles, Boston and Atlanta. Some 22 percent of Mississippians live in poverty, the highest proportion of any state’s population, and only five states (Alaska, Connecticut, Maryland, New Hampshire and New Jersey) had fewer than one in 10 residents living in poverty in 2009.
Other social phenomena reported by the Census Bureau are associated with job losses and declining incomes:
- Median property values for owner-occupied homes dropped 5.8 percent in 2009 when adjusted for inflation. More homes are empty, as the share of vacant units has grown every year since 2006, to 12.6 percent in 2009. Fewer people are moving, either from their current homes or their current states. Home ownership declined for the third year in a row to 65.9 percent, from a peak of 67.3 percent in 2006. The average size of a household living in a rental unit has increased since 2006.
- People are delaying marriage, especially in the working class. For the first time since the government began recording such data, less than 50 percent of women 18 and over were married in 2009. The share of adults 25 to 34 who have never been married climbed to 46.3 percent in 2009. “The decline in marriage is greater among the poor and less educated” (USA Today).
- Americans have fewer cars, as the percentage of homes with more than one automobile declined in 2009.
- The poverty gap between young and old has doubled since 2000. Official child poverty is now 21 percent, compared to 9 percent for older Americans. The figures in 2000 were 16 percent and 10 percent, respectively.
- The AP reports research indicating that “lower-skilled adults ages 18 to 34” suffered the “largest jumps in poverty last year as employers kept or hired older workers for the dwindling jobs available.”
- The number of US households receiving food stamps rose by 2 million in 2009 to 11.7 million, the highest level on record. Forty-six states experienced increases in food stamp use.
Four million people in the Midwest, once a global industrial and economic center, live in extreme poverty, an increase of half a million in 12 months. Nearly 3 million children live in poverty in the area, an increase of almost a third in a decade. Median household income in the US Midwest declined from $54,600 in 1999 to $48,400 in 2009. Eight million people in the region have no health insurance.
The Detroit News noted Tuesday that,
“Michigan families have been hit the hardest by the recession, with incomes plummeting and poverty rising at rates seen nowhere else in the country.”Median household income in the state has dropped nearly 21 percent since 2000, or almost $12,000, the biggest decline in the country.
The ranks of the poor swelled in Michigan by 159,000 in 2009 alone. The number of children living in poverty in the state rose to more than half a million in 2009, or 22.1 percent. Approximately 30,000 single-mother households with children in Michigan were poor last year. The state’s national ranking in household income fell from 16th in 2000 to 35th in 2009.
According to US census officials in Detroit, with whom a WSWS reporter spoke, while the overall poverty rate in the city is 37 percent, for those under 18 it is 51 percent.
In neighboring Ohio, the official poverty level reached nearly 16 percent in 2009, or one in six residents. Nearly 1.5 million people in Ohio are now counted as poor, up from 1.2 million in 1999. Seven percent of the population (800,000 people) lives in extreme poverty in the state, an increase of 45 percent. Nearly 200,000 more Ohio children were poor in 2009 than in 1999. Median household income fell more than $7,000 over the same period.
In Indiana, 14.4 percent of the population lives in poverty, or some 900,000 people, up from 560,000 in 1999. The number of those in extreme poverty in Indiana in 2009 (400,000) was up 60 percent over 1999 (250,000). The child poverty rate increased by 68 percent (from 11.7 to 19.7 percent) in the decade 1999-2009.
Poverty increased among Illinois residents by nearly a quarter during the same 10-year period. In Chicago in 2009, more than 10 percent of the population lived in desperate poverty and 31.2 percent of children were categorized as poor.
Florida experienced the second sharpest decline in household income in 2009 after Michigan, 5.7 percent, while in California in 2009 one in seven people lived in poverty.
In the face of widespread—and growing—economic suffering, the American political establishment remains cold and indifferent, concerned only with defending the wealth and privileges of a tiny minority. As of late Tuesday afternoon, neither the White House nor any leading Democratic Party website carried a response to the Census Bureau figures, which register a portion of the impact of the greatest economic crisis since the Depression of the 1930s.
Census Bureau Releases 2009 American Community Survey Data
U.S. Census Bureau Press ReleaseSeptember 28, 2010
The U.S. Census Bureau today released the results of the 2009 American Community Survey (ACS), one of a series of data products the Census Bureau is releasing in the coming months that provides information on the nation's population. Today's release is based on survey responses collected over the course of the 2009 calendar year and provides data about the nation's socioeconomic, housing and demographic characteristics. The first set of 2010 Census data, including the nation's population and congressional apportionment figures for the states, will be released by the end of 2010, as required by law.
“Collectively, ACS and census data are critical components of the nation's information infrastructure, providing data essential to our economy and our communities,” Census Bureau director Robert Groves said. “ACS data are required by numerous federal programs and for planning and decision making at the state and federal level. ACS data help communities and businesses create jobs, plan for the future, establish new businesses and improve our economy.”Focusing on the population's characteristics, the ACS complements, but is different from, the 2010 Census population data. As a complete count of the population, the 2010 Census data are critical for people who need to know how many people live in the United States and where they live. The ACS data, on the other hand, are based on a sample survey of the nation and describe how we live by providing estimates of key social, economic and housing characteristics.
Today's release covers more than 40 topics, such as income, educational attainment, housing and family structure for all geographies with populations of 65,000 or more.
In December, the Census Bureau will release the first set of ACS statistics for all geographic areas, regardless of size, using data collected between 2005 and 2009. A third set of 2009 statistics covering all areas with populations of 20,000 or more will be released in January 11, 2011, based on data collected between 2007 and 2009.
In addition to the ACS data released today on the Census Bureau website, the Census Bureau is releasing a set of briefs on seven topics: poverty, median household income by state, men's and women's earnings by state, food stamp/Supplemental Nutrition Assistance Program receipt by state, health insurance coverage among children, disability among the working age population and usual hours worked (see: http://www.census.gov/acs/www/data_documentation/2009_release/>). Thirteen additional briefs based on today's data will be released on this website on October 12.
2009 ACS Highlights
Median Household Income
The American Community Survey is the successor to the former census "long form" that historically produced demographic, housing and socioeconomic data for the nation as part of the once-a-decade census. The decennial census program, which includes the ACS and the 2010 Census, serves as the basis for the allocation of more than $400 billion in federal funds to state, local and tribal governments every year. These vital data also guide planning in the private sector as well as the work done by policymakers at all levels of government and in communities of all sizes. All survey responses are strictly confidential and protected by law.
Changes in survey design from year to year can affect results. See http://www.census.gov/acs/www/data_documentation/2009_release/ for more information on changes affecting the 2009 data. See http://www.census.gov/acs/www/guidance_for_data_users/comparing_2009/ for guidance on comparing 2009 ACS data with data from previous years and the 2000 Census.
The Plundering of America (Excerpt)
By Jeff Nielson March 7, 2010
In several previous commentaries, I have criticized our system of income taxation as being fatally flawed. The primary flaw is that for the people at the top of the economic pyramid, income is usually only a tiny component of their increasing wealth. Generally, the vast majority of new wealth for the ultra-wealthy comes from the appreciation of assets, which are never (and can never) be taxed by an income-based system of taxation.
The ultimate result of an income-tax system is that wealth is relentlessly transferred out of the hands of the poor and middle class -- and into the hands of the ultra-wealthy. I have previously illustrated the net result of decades of income taxation in the United States, through some horrifying demographic data.
The top 20% of wealthiest Americans hold an obscene 85% of all wealth. Put another way, the “little people” who comprise the bottom 80% of U.S. society hold only a pitiful 15% of U.S. wealth -- the most lop-sided wealth distribution among all Western societies. However, while that data is bad enough, it gets much worse when we focus upon the top 1% of wealthiest Americans. These pseudo-aristocrats hold 35% of all wealth and 56% of all stocks held by Americans.
Put another way, as the Wall Street Oligarchs crow about the “amazing rally” in U.S. equity markets, 56 cents of every dollar of profit goes to just 1% of Americans. Meanwhile, the “little people,” the 80% of Americans on the bottom hold less than 15% of all stocks -- meaning that this Wall Street-manufactured “rally” is doing nothing to alleviate the economic suffering of the vast majority of Americans.
However, some new, economic data out of the U.S. has left me completely flabbergasted. While I was well aware of the Bush-era tax hand-outs to the wealthy, I did not truly understand the magnitude of that windfall. The numbers are totally shocking.
In 1995, during the Clinton-era, the top-400 wealthiest Americans 'earned' an average of $50/million per year in income, while paying an effective tax rate of 30% on those earnings. In 2007, a mere 12 years later, the effective tax rate for the “400” had fallen by 45%, thanks to the Bush hand-outs.
What is even more shocking (and despicable), however, was the rise in incomes of the “400.” In just 12 years, their average incomes rose from $50 million/year to $345 million/year -- a nearly 700% rise in incomes in just 12 years, or an average wage-hike of well over 50% per year. What makes this all the more despicable is that during this same period of time, the U.S. government (and Canada's government, as well) have been doing everything in their power to prevent the “little people” from getting any wage increases, at all.
In aggregate terms, this unequivocal decision to “take from the poor to give to the rich” has produced a wealth schism which literally has not been seen in our societies in over 70 years.
As you can see in the chart above, it is “deja vu all over again” as the share of increases in income for those Americans at the top is now at virtually the same level it was in 1929 -- just before the Great Depression began. While it would be inaccurate to say the Great Depression was “caused” by this grossly disproportionate schism in incomes, I will remind readers of one of my favorite quotations, from Greek philosopher, Plutarch -- nearly two thousand years ago:
An imbalance between rich and poor is the oldest and most fatal ailment of all Republics.
Thus, while the obscene plundering of America's wealth by the top 1% (courtesy of the Bush regime) did not cause the second “Greater Depression” in the United States, it will certainly make it much, much worse.
It goes without saying that the top 1% of Americans do not “earn” over 60% of all pay-raises in the U.S. Rather, this massive wealth-grab has been enabled by a society which has willingly submitted to what is nothing less than “economic rape.” Indeed, unlike real “rape victims,” we literally “asked for it.”
How could “the little people” (who now wield little, real power in our societies) be responsible for having most of our wealth stolen from us? Apart from the fact we continue to submit to a system of taxation which (inevitably) robs-from-the-poor to give-to-the-rich, we willingly endorsed the destruction of trade unions in our societies -- swallowing the economic propaganda fed to us by the corporate media-empire, like the moldy tripe that it was. Unions are corrupt.” “Unions are greedy.” “Unions cause inflated wages for their members -- which hurts our economy.”
Let me be perfectly clear here: I am not defending unions as “bastions of economic purity.” Having worked in four different unions while I was working my way through seven years of university, I saw (first-hand) all the flaws exhibited by these organizations. Yes, there is “corruption.” Yes, there is “greed.” Yes, unions do result in higher wages for their members than if they were not in a union. However, the issue here is perspective.
Power corrupts. Absolute power corrupts absolutely.” This tautology applies to all members of our society, and as these words of wisdom make explicitly clear, they are more applicable to those on top (i.e. those who come closest to “absolute power”), who are corrupted the most.
Is there any other group of people in the world more corrupt than the Wall Street Oligarchs? In previous commentaries, I pointed out how these Oligarchs are the most-ruthless and most-hypocritical people on the planet.
As for “greed,” the numbers above clearly demonstrate that the greed of the rich makes the (supposed) “greed” of the little people appear to be nothing but a pathetic joke, in comparison. However, that data merely represents the “tip of the iceberg.”
Notice how during the years when trade unions were their strongest (during the 1960's) -- and supposedly at their “greediest” point -- that the little people still didn't come close to getting their share of the income pie. The bottom 99% at their absolute best only obtained 65% of total wage increases, only 2/3 of their rightful share. Keep in mind that even that statistic is badly skewed by the fact that the wealthiest members of the bottom-99% (i.e. the rest of the top-20%) took home most of those wage-increases. Thus, when trade unions were at their absolute peak of power, they were able to extract only about half the wage increases which their members (i.e. the people) were rightfully entitled to.
Thanks to the apathy of the flocks of sheep who masquerade as “citizens” in our societies, unions in North America have been nearly destroyed, and the public sector unions are virtually the only unions which have been allowed to survive.
What is the attitude of the average American toward these public sector unions? They want to see them crushed, if not abolished, altogether. Having learned nothing from the last 40 years of their economic oppression, instead of looking to increase union-representation for themselves (as the first step in reversing this scenario), instead, these petty, ignorant people can only think of stripping away the same rights and benefits which these sheep willingly threw away for themselves.
Yes, U.S. public sector unions do much better for their members than for the non-union knuckle-draggers who did away with their own unions. However, as the economic data clearly indicates, the wages and benefits which public sector unions have obtained for their members are nothing but 'economic crumbs' compared to the obscene fortunes which the ultra-wealthy have plundered from American society.
Let me return to the final (faulty) accusation which has been directed at trade unions: that their “excessive” wage increases “hurts our economy.” The “evidence” which the propagandists use to supposedly justify this economic fiction dates back to the 1970's.
First, Nixon defaulted on the gold-obligations of the United States, taking the entire, global monetary system off of a “gold standard” -- for the first time in history -- meaning that none of the world's currencies were “backed” (officially) by any hard asset. This also allowed the banksters (for the first time in history) to engage in their dilutive, money-printing without any economic restraints.
Inflation immediately began to soar, and (along with concurrent political events) this led to the “Energy Crisis” of the 1970's -- where the newly-formed OPEC cartel announced they would no longer allow the United States to plunder all of their petroleum wealth at only a fraction of its real value.
There can be no questioning the legitimacy of OPEC's grievances, since the numbers are unequivocal. As I have often discussed in my commentaries on silver, it is a very basic truth of economics that any good which is “under-priced” will be “over-consumed.” If McDonald's announced that it would start selling “Big Mac's” for a penny apiece, we would all start eating hamburgers (or eating more of them) and cows would become “an endangered species.”
The obvious fact that we have a “supply crisis” in the crude oil market today is unequivocal proof that crude oil has been under-priced throughout most of the last several decades.
With the “spike” in the price of oil, an inflation-spiral began in our societies. I would ask all the union-bashers out there to please let me know which of the preceding events was the “fault” of trade unions? Nixon's gold default? The abolition of the gold standard? The reckless money-printing of the banksters? The plundering of Arab oil-wealth, which led to the formation of OPEC. Pardon my ignorance, but I fail to see how trade unions played any role at all, in the creation of the 1970's inflation-spiral.
However, once that spiral began, to the horror of the wealthy, all of our trade unions became “radical.” They made the “unreasonable” demand to their employers that if inflation was at a 10% annual rate that they wanted 10% raises for their members -- so that their members weren't being punished for Nixon's gold default, the abolition of the gold standard, the reckless money-printing of the banksters, and the formation of OPEC.
It was at this time that large corporations had finally managed to acquire a virtual monopoly over the “free press” of our societies. They immediately took advantage of this ability to control the “news” by re-writing history.
Suddenly, it was not Nixon's gold-default, the abolition of the gold standard, the reckless money-printing of the banksters, and the back-lash from Arab oil producers which had “caused” the inflation-spiral in the world's economies. Indeed, the propaganda-machine even changed the name of this economic phenomenon. It changed from an “inflation spiral” to a “wage-price spiral.”
In other words, instead of characterizing events truthfully; namely, that unions responded to the inflation created by our governments by seeking compensatory wage-increases, the propaganda which was sold to the sheep was that this entire “wage-price spiral” was caused by the 'evil' trade unions -- whose “crime” was that they did not believe their members should be getting poorer every year.
The rest, as they say, “is history.” The sheep turned on their own unions. They allowed our governments to “fix” the inflation problem they created by destroying our societies' trade unions. Concurrently, these same governments refused to shorten the work-week -- to reflect the beginnings of “structural unemployment” which had started to take hold in our labour markets.
For those unfamiliar with this term, “structural unemployment” is unemployment which is permanently “structured” into our labour markets so that even at the peak of each business cycle, a growing number of people would never find employment.
This has been a basic dynamic of our economies since the birth of capitalism, and the original “work week”: seven days a week, twelve hours a day. Since technology always eliminates jobs faster than it creates new applications, every few decades it was necessary to shorten the work week -- otherwise a steadily growing number of workers would never find a job.
Our governments stopped this evolution, freezing our work week at the current five-day, forty-hour work-week, which has been a standard for more than half a century. At the same time that our unions were destroyed (the only protection for workers) our governments have allowed “structural employment” to reach its highest level in history.
Thus, in addition to workers having no protection, they also had all of their “job security” robbed from them, since unlike a generation earlier, where a worker could quit a job if he was unhappy -- and look for a new/better one; with millions of permanently unemployed workers ready/willing/able to take the jobs of existing workers and work for even lower wages, we effectively became a society of “slaves” totally dependent on pleasing our “masters” for our economic survival...
The Culprit: Enormous and Growing Inequality of Incomes
Some may feel this book is just as polarizing as the current state of politics and media in America. The decades-long decline in income taxes of wealthy individuals is cited in detail. Wage earners are usually subjected to the FICA taxes against all their ordinary income (all or almost their entire total income). But the top wealthy Americans may have only a small percentage (or none) of their income subjected to FICA taxes. Thus Warren Buffett announced that he pays a lower tax rate than his secretary. Buffett has cited income inequality for "poisoning democracy."
When you search the 'Net for Buffett quotes on inequality, you get a lot of results showing how controversial he became for stating the obvious. Drawing attention to the inequity of the tax regime won him powerful enemies. Those same people are not going to like the authors for writing Winner-Take-All. They say these political science people are condescending because they presume to tell people their political interests.
Many studies of poverty show how economic and political policies generally favor the rich throughout the world, some of which are cited in this book. Military spending and financial bailouts in particular favor the wealthy. Authors Jacob Hacker and Paul Pierson document a long U.S. policy trend favoring wealthy Americans. This trend resulted in diminished middle class access to quality healthcare and education, making it harder to keep up with the wealthy in relative terms. Further, once people have lost basic foundations of security, they are less willing and able to take on more risk in terms of investing or starting a business.
The rise of special interests has been at the expense of the middle class, according to the authors. Former President Carter talked about this and was ridiculed. Since then government has grown further from most of us. Even federal employees are not like most of us anymore. In its August 10, 2010 issue, USA Today discussed government salaries:
"At a time when workers' pay and benefits have stagnated, federal employees' average compensation has grown to more than double what private sector workers earn, a USA TODAY analysis finds."An excellent documentary showing how difficult it is to address income inequality is One Percent, by Jamie Johnson of the Johnson & Johnson family. Collapse: How Societies Choose to Fail or Succeed, by Pulitzer Prize-winner Jared Diamond. Collapse: How Societies Choose to Fail or Succeed shows examples of what can happen when a society disregards a coming disaster until too late. I hope that Winner-Take-All will prompt people to demand more of elected officials and to arrest the growing income gap for the sake of our democracy.
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