HALF OF AMERICANS EARN LESS THAN THE MEDIAN WAGE

By Paul

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.

THE DOWNSIDE AND SHARP EDGES OF CAPITALISM

By Paul

The recent passing of Baroness Margaret Thatcher has brought to mind the many changes she was responsible for bringing about in Great Britain during the time when she was Prime Minister there.  While it is true that the England of the late 1970’s could in many ways be described as something of a dysfunctional society, and what the new PM did may have brought a certain degree of economic stability to the country, much of what was done also unfortunately brings to mind what we used to say about Vietnam way back in the 60’s, that is, that we may have to destroy the country in order to save it.

Mrs. Thatcher, like so many other conservatives both in the UK and in the United States, was a great believer in “get-what-you-can-for-yourself-ism.”  The underlying philosophical position here is pretty much every man and woman for him or herself, and if you can’t cut it for some reason, then you deserve what you get, namely, nothing.  As a result of her policies – and much the same can be said for President Ronald Reagan and company in this country – the rich got much richer, the middle class got a little bit, although we have seen nothing but stagnant growth ever since, and the poor got, as they say, bupkis.  Bupkis is a Yiddish word referring to beans, but in truth the term was used because the small roundish shape of the beans reminded people of goat droppings.  And goat droppings are pretty much what the poor can expect these days from our own more updated version of Thatcher/Reaganism.

If it is true that a society can be judged on how it treats its least fortunate members, then I fear that we are in for some well-deserved condemnation.  The recent, and for many still very much present, economic recession cum depression has left a lot of people out in the cold.  And that term can and should be taken literally in many instances.  Homelessness has increased drastically, and there are currently more than a million and a half people in this country living as best they can, whether that be in their cars, camping out at the home of a friend or relative, or actually out in the street.  Hunger, too, is a daily fact of life for many people, not just in far off lands ravaged by war and drought and predatory or dysfunctional governments, but here in the United States as well.  Fully 1 in 6 Americans is classified as hungry.  33 million people are listed as “food-insecure,” and a staggering 16 million are labeled “very food-insecure.”  And this in what is still proudly referred to as the richest country in the world.

Don’t get me wrong.  I am not arguing for communism in America.  In all practical terms, that discredited philosophy has long since exited from the world political stage (as someone ought perhaps to remind Kim Jong Un), or even for socialism, God forbid, which some Americans appear to feel is akin to throwing their sick and aged grandmother out into the street.  But in a country the size of, and with the wealth and resources of the United States (even in spite of the recession), it is and should be a great shame on all of us that almost 50 million people are living in poverty.  For those interested in percentages, this comes to something in the neighborhood of 16% of our population.  And that is up from 37 million back in 2007, right before the recession hit, and an almost incredible jump up from only 12.5% back in 1997.

And these are just the aggregate figures.  The picture is far more dire if we drill down and take a look at specific communities of poverty and dispossession.  For Hispanics, the numbers are more like 26.6% (in 2010) living in poverty, and for Blacks it was 27.4%.  The rate of increase for children under the age of 18 jumped from 20% to 22% that same year.  And for the moment anyway, at least until President Obama’s much maligned Affordable Health Care Act kicks in (discourteously, in my opinion, referred to as Obamacare), there are still some 50 million Americans without health insurance.

I could go on with statistics.  Any of us could.  They are out there for everyone to see with the mere click of a mouse.  For example, the above figures do not reflect the fact that official levels of poverty do not include cuts in governmental programs that assist the poor, such as Food Stamps.  If all this is calculated into the mix, the numbers rise even more precipitously and more alarmingly.  Unfortunately, after a while we become inured to the numbers, in a similar way as we often do with the facts surrounding global warming. And it is easy to quickly feel hopeless and overwhelmed, or to throw our hands up and say, but what can anyone do?

Some of the more obvious answers to this question, such as giving to charities or volunteering one’s talent and energies, let us say, might not resonate with everyone.  Many may not have either the money or the time to take these on.  Additionally, and again making an analogy to the fight against global warming, it’s easy to say that small steps taken by individuals are of little overall benefit in the long run, given the enormous magnitude of the problem.  And I don’t deny that there may be some truth to this.  I have always believed that for us to do anything really serious, for example, about the disastrous warming of the globe that we are currently witnessing, what is needed are macro actions on the level of governmental and inter-governmental programs.  Something of the same can be said in regard to poverty, as well.

The battle against poverty, however, is perhaps one that can best be undertaken on a country-by-country level.  Just look, as an example, at how poverty rates have escalated in Egypt after the tumult of the recent elections there.  It is clear that one of the obvious causes of poverty in the world is the degree of chaos and political instability that a country is experiencing.  In the United States, on the other hand, as dysfunctional as Congress may be, we have probably not quite reached the level of disruption and upheaval found in some other parts of the world.  Still, political stability notwithstanding, the facts and especially the figures stand by themselves. Many American children and adults suffer the demeaning and debilitating consequences of a life lived in poverty.

In my view, the very least we can and must do is to inform ourselves of what is happening.  This is, in fact, the first and most essential duty, and the solemn obligation of everyone privileged to live in a democracy, to find out what is happening in their own country.  There is no dearth of news sources available, from television, to newspapers, to the internet.  Find out what is going on.  Read, read, read, or at least critically listen to the news and to what commentators are saying.  It’s not that we always have to agree with what journalists have to say, but informative, well-formed, and well thought out analysis and reportage can be of enormous value.

Once informed, perhaps the next most important thing is to vote, and then to keep in touch with your elected representatives.  My advice is to choose those individuals who care for and about other people, and to vote out of office anyone who displays a callous disregard for helping those who are less fortunate.  Even so, it goes without saying, I suppose, that there will always be differing views people may have when it comes to deciding how to deal with the many problems related to poverty.  Which brings us back again to Ronald Reagan and Margaret Thatcher, and to their more contemporary political progeny.

All I can say is that, if I had my way, I would not want to see anyone elected who appears to believe that life is a tabula rasa, or that everyone starts out with the same basic socioeconomic advantages.  Yes, no argument, we all absolutely must work hard, and not willy-nilly expect the world to take care of us, irrespective of our beginnings.  But that is not the same as being ready to deal with people compassionately and empathetically, or the simple willingness to demonstrate a degree of human caring for those whom life has treated more harshly.  And any of us, by the way, might in the end wind up among the less fortunate.  So, be careful whom you condemn, and be willing to lend a hand when people are in need.  This, too, is a great hallmark of democracy, even if it is not necessarily the trademark of raw, sharp-edged capitalism.