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Tag Archives: inequality
As income gains go to the 1%, the rest of us wonder, where is the recovery?
In his updated paper, Striking it Richer: The Evolution of Top Incomes in the United States, Emmanuel Saez explains that while the top 1% of wages earners lost the most during the Great Recession — this always happens — they’ve also made the most gains during the recovery.
Do you know who is not feeling the gains from the economic recovery? You guessed it, the 99%.
One of the most damning statistics from the study shows that the 1% is accumulating wealth at a staggering rate again. According to the paper, “In the first year of the recovery, 93 percent of all income gains went to the top one percent.”
Furthermore, Saez concludes that the recovery was “uneven” and this can help explain “recent public demonstrations against inequality.”
Another study from the Economic Policy Institute proves just how sad the situation has become. Even a college education does not get you as far anymore. Statistics show that “In 2011 the hourly wage of entry-level male college graduates was just a bit over $1.00 higher than in 1979, a rise of 5.2 percent over thirty-two years.”
To learn more about Saez’s paper, NPR has a nice write up below:
Paychecks for young adults getting slimmer
By Eve TahminciogluYoung adults may be facing their own version of “The Hunger Games” when entering the workforce today because they’re probably going to be hungry for more money.
Wages for young workers have been declining for more than a decade. They fell off a cliff during the Great Recession to levels not seen since the 1970s for certain groups of entry-level workers, according to new data from center-left think tank the Economic Policy Institute.
(OK, maybe it’s not exactly “The Hunger Games” just yet. In that dystopian future, depicted in a trilogy of novels and now a movie, a reality TV show follows teens fighting to their death, with the winner earning food for his/her home state. But you get our point.)
Not surprisingly, the news is worse for those with less education; and the pay gap between entry level men and women no matter what the education level is still alive and well.
Entry-level wages for high school graduates were actually lower than they were in the 1970s. For college grads, starting wages were below what their counterparts pocketed in the late 1990s. Today, the average wage for all these young adults, no matter education level, is about $15 an hour.
And whether they have a college degree or not, women still aren’t bringing home as much bacon as the men, but the gap has been narrowing. The good news, unfortunately, is partly attributable to the fact that the guys are getting paid less because of the economy.
“When the labor market is strong for workers the prospects for young workers are very strong, and when the labor market is weak their prospects are very weak,” maintained the Institute’s president Lawrence Mishel about the data that’s part of his forthcoming book ‘The State of Working America” due out in August. “The recent decade affirms this general finding, as the wages of entry-level workers have fared extremely poorly during this period of general wage stagnation.”
Here’s a breakdown of the numbers:
- The entry-level hourly wage of a young male high school graduate in 2011 was 25.3 percent less than that for the equivalent worker in 1979, a drop of roughly $4.00 per hour in 2011.
- Among women, the entry-level high school wage fell 14.2 percent over the same period, and dropped by $1.64 last year.
- Wages for high-school educated women are still far below those of their male counterparts, a gap of 15 percent.
- In 2011 the hourly wage of entry-level male college graduates was just a bit over $1.00 higher than in 1979, a rise of 5.2 percent over thirty-two years.
- Women college grads did better, with their wages growing by 15.4 percent, or $2.50, from 1979 to 2011.
- The gender pay gap among this group, however, still persists. The hourly wage for college educated men was $21.68 in 2011, compared with $18.80 for women.
Too bad young adults don’t qualify for child ticket prices anymore. Adult tickets for the upcoming “The Hunger Games” movie are going for $11 a pop.
Pulling Back the Curtain: Exposing the one percent behind big bank bonuses
On January 23rd, The New Botton Line — an organization challenging banking influence in our country — released a report titled, “Pulling the Curtain Back: The 1% Behind the 2011 Big Bank Bonuses.”
The publication explains how large banks, despite the excesses of the housing bubble and the consequences of the housing market collapse, continue to pay out large bonuses and salaries while middle class families suffer.
Bank executives realize that public opinion is against them and have tried to say that overall compensation is down. However this is untrue. According to the report, “The nation’s top six banks—Bank of America, JP Morgan Chase, Wells Fargo, Citigroup, Morgan Stanley and Goldman Sachs—paid out $144 billion in bonuses and compensation this year, making 2011’s payday the second highest on record for these six firms.”
This is what really hits home. Banks offered questionable loans before the housing bubble reached its zenith, asked for government support when things went bad, and then failed to take any responsibility for their actions. Instead, banks continue to lobby for reduced regulations, while middle class workers are just struggling to pay the bills.
The report also gives examples of how banks executives and board members could take responsibility and make things right…
- Just half of the banks’ bonus and compensation pools would be enough to write down the principal on all underwater mortgages in the country.
- If the six banks took half of their bonus and compensation pools and put it directly into a jobs fund, they could create 1.8 million jobs and still have enough money left over to pay the average employee $60,605.
- Just 72% of the $144 billion in bonuses and compensation at the top six banks would have been enough money to plug the $102.9 billion in budget holes for all 50 states for the current fiscal year.
To read more about the report, click on the links below:
Americans work more, get less
Income inequality is growing in the United States, and the results are not pretty.
Baltimore, plagued by high unemployment, has been hit particularly hard by the recession. Local residents, as they walk by boarded up shops or empty street corners, are left to ponder the economic future of their city.
For those of us lucky enough to be employed, what do we have to look forward to in the coming years? Unfortunately, this outlook is also bleak. While CEOs and top executives are raking in the money, average wages are stagnant. Last year, “CEOs at the largest U.S. companies made an average of 343 times the median worker salary.” This is up from 43 times in 1980.
According to a Mother Jones piece titled, “Overworked America: 12 Charts that will make your blood boil,” Americans — despite working longer hours and working more efficiently — are getting the short end of the stick. Check out some of the grim statistics below:
- If the median household income had kept pace with the economy since 1970, it would now be nearly $92,000, not $50,000.
- Corporate profits are up 20% (a good statistic on its own, but not when combined with wage numbers)
- The average income for the top 1% of wage earners has gone up over 240 percent.
