First of all, let’s be sure we have our terms straight. The median wage refers to the midpoint of money earned by everyone in the United States. In other words, it is the dollar figure wherein we see half of the wage earners bringing in above that amount, and half falling below it. What is that figure? In a country as rich as ours, you might think the midpoint to be somewhere in the $50,000 to $60,000 range, would you not? But no, it is actually less than half of the higher of these two figures. The American median wage is exactly $27,519.00.
Think of it. Half of the people in this enormously wealthy country of ours earn less than $27,519 a year. In essence, this means that more than 150 million people essentially scrape by financially. Remember, too, that the federal poverty guidelines (the amount below which an individual or family is “officially considered to be living in poverty”) stipulate $23,550 for the “typical” family of four people. Therefore, if only one person in a family of four is working, not an unusual situation these days, and if that individual earns some $27,500 a year, then this family escapes “official poverty” only by about $4,000 a year. And if another dependent were to be added, then they are considered to be living in poverty.
And that is not all. Before the so-called “Great Recession” hit in 2007, that median income level was actually almost $1,000 higher than it is now. What does this mean? It means that, in the ensuing years since then, and even now after the recession is “officially over,” Americans have actually lost money in terms of median income, and all this while prices for essentials such as food and medical care have gone up. Food costs, for example, have risen more than 12% above inflation in the past 6 years, and medical costs have soared from $1,100 per person in 1970, or 9% of GDP (gross domestic product), to $8,402 per person in 2010, or almost 18% of GDP.
The average wage is also another important and powerful indicator. Again, to be sure of our terminology, the average wage is calculated by adding up all of the money earned by Americans (including stocks, bonds, and other interest on investment), and simply dividing it by the total number of people in the country. That average wage is $42,498.00. For simplicity’s sake, let us round it off and call it $42,500.
There are a couple of interesting things about this figure, aside from immediately comparing it in our minds to exactly where we fall, each of us, in regard to it. One of these interesting facts is that, instead of it growing, which we normally would expect it to do, it actually shrank during the years of the recession. But it has risen in the past year by almost $500. When the average wage increases at a time when the median wage decreases, this essentially means that the income of those earning above the average wage is rising faster than those earning below it. In other words, the old adage remains true: the rich are, in fact, getting richer, while the poor are getting poorer. Big surprise, I suppose, most people might well say.
The above figures are probably the most important ones. However, let us take a look at a few more facts that round the picture out. One is that the majority of the income growth in the last year or so has taken place in the top quarter of Americans. Another, which I find somewhat startling, is that 67% of American workers earn less than the average of $42,500 per year. Put another way, only one-third of workers earn ABOVE average salaries.
Obviously, loss of jobs due to the recession has been one of the main culprits. As David Cay Johnston puts it in an on-line article in Al-Jazeera: “Had jobs grown since 2000 at the same rate as the population, last year the nation would have 11 million more people working.” He goes on to point out how this would have meant not only less misery and suffering for those millions who remain unemployed, but think also about the tax revenue lost to the government, which would have helped greatly with the deficit the Republicans are always talking about.
Adjusted for inflation, total real wages for most Americans have dropped fully 6% since 2007. But how have those at the top of the job market fared? The top 1% now collects almost 20% of all the money earned in the United States, an astounding figure by anyone’s calculation. Additionally, the income of that top 1% has risen 20%, compared to the mere1% increase for the remaining 99% of us. And if you expand your parameters to the top 10% of income earners, they now hold very close to 50% of all wealth in this country. The largest previous holding of wealth by the top 10% was at 46%, and that was in 1932. Indeed, if you make more than $50,000 a year, you earn more than almost three-quarters of all Americans, and if you happen to make $100,000, you earn more than some 93% of your fellow citizens.
It is, therefore, no myth that income inequality is growing very rapidly in this country. The Middle Class is struggling to hold its own, while the poor, or the near-poor, the working-poor as we have all heard, are losing more and more ground. In the meantime, what is Congress doing about all this? Instead of working with the Administration to find ways to get Americans back to work, and in so doing helping to fix an unsustainable deficit, they are dithering and delaying, shutting the government down for no good reason, and refusing to pay the bills we have already incurred. I blame the Republicans mostly for the mess, but if pushed, I could agree that there is blame enough for all involved.
You don’t have to have a doctorate in Economics to know what is needed: first of all, fix our unworkable and unequal tax code; second, work on an even-handed, reasonable, and equitable fix related to the growth in so-called entitlement programs; and finally, help people find jobs, jobs, jobs. I’ll pass over saying more about the terrible medical insurance muddle we’ve gotten ourselves into, since the Affordable Care Act, even with its flaws, has gone a long way toward helping to fix that. And why else do we elect representatives and send them to Washington in the first place? People are extremely concerned, and rightly so, and some people are desperate. Let us find a way to work together and fix the problems that actually exist, rather than fighting about issues that, in the end, do not really matter.
As we all know from the sonorous words of the Preamble of the United States Constitution, our national purpose must and should always be to “establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty for ourselves and our Posterity.” It is possible to do. We have done it before, and if we have the will, the determination, and the good sense, there is no reason why we cannot do it again. It is time for us to stop calling each other names, and instead to name the real problems we are all facing, so that, together, we can do what it takes to actually fix them.