Study shows a stunning gap between U.S. rich and poor

The rich have left the poor far behind in the United States.

That's according to data posted on the Web site of the National Union of Public and General Employees.

It shows that the top one percent of income earners obtained two-thirds of the income gains between 2002 and 2007.

The gap between the top one percent of income earners and the bottom 90 percent is greater than at any time since 1928, according to the NUPGE.

The data came from an analysis of Internal Revenue Service Records by economists Thomas Piketty and Emmanuel Saez.

Here's some of the other information that appears on the union site:

  • 2007 marked the fifth straight year in which income gains at the top outpaced those of the rest of the population.
  • The proportionate share of the nation’s total income going to the top 1% of households also rose sharply, from 16.9% in 2002 to 23.5% in 2007. This  was a  larger share than at any time since 1928. (In 2000, at the peak of the 1990s boom, the top  1% took home 21.5% of total national income.)
  • Income gains have been even more shocking among those at the extreme top of the income scale.
  • The incomes of the top 1/10th of 1% of U.S. households grew by 94% or by $3.5 million between 2002 and 2007.
  • The overall share of the total national income flowing to the top 1/10th of 1% rose from 7.3% in 2002 to 12.3% in 2007.
  • These are the most lopsided figures  in Piketty-Saez data going back to 1913, surpassing even the previous peak in 1928.
Comments (15) Add New Comment
ExcellenceInAmerica.com
So What? All this demonstrates is that it is still possible in America for the poor to become rich.
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Canada
I am very interested about what is happening in BC. It seems like there would be a lot of similarities. Under Gordon's reign we have achieved the unprecedented title of worst child poverty in Canada.
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Canadian Young Earn Less
Young earn less than parents did: Census

Young people entering the job market today earn less money than their parents did a generation ago, according to new census data released by Statistics Canada.

In fact, it's a trend that began a quarter century ago and doesn't appear to be slowing down – especially for young men entering the workforce.

Across all age groups, median salaries for full-time workers have changed little in 25 years. Workers today make, on average, a mere $53 more than they did in 1980, when adjusted for inflation, according to the census.

That stagnation mainly afflicted the middle class. The top earners in Canada saw their wages increase 16.4 per cent since 1980, while the bottom rung saw a 20-per-cent decrease.

For the 25- to 29-year-old group, it's also a story of decreasing fortunes.

In 1980, median earnings for full-time male workers in that age group – the time when people are generally starting their careers – were the equivalent of $43,767 in 2005 wages. By the year 2000, they dipped to $38,110 and in 2005 they stood at $37,680.

http://www.thestar.com/article/420331
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Buy Made in Canada
It is simple economics. Every product you buy not made in Canada is making your poorer and the rich richer.

Moving jobs and products offshore is done to increase profits.
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seth
Actually statistics show that is far less likely that a poor American become wealthy than a poor person in any other Western Democracy.

The third world nutrition, legal, housing, medical and education available to the bottom third (mostly republican voters) are some of the reasons. America's status as the most corrupt political and legal system in the Western world is a major factor.
seth
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the affordability gap
Spending Differences Between Canada's Rich and Poor

* 34% of low-income households had high-speed Internet access compared to 89% of high-income households.
* 40% of poor households had cell phones compared to 85% of wealthy households.
* 31% of poor households had pets compared to 62% of wealthy households.
* Spending on transportation was more than 15 times higher in high-income households than low-income ones - $17,366 compared to $1,074.
* Spending on recreation was three times higher - $8,449 versus $2,680.
* 12% of poor households spent money on sports equipment compared to 61% of wealthy ones.
* Rich households were more than three times more likely to have computers than poor ones - 80% to 26%.
* 10% of poor households visited museums compared to 48% of wealthy homes.
* 15% of the poorest group spent money on the performing arts versus 57% for the richest.
* 36% of the poorest group spent money on eye care, compared to 72% of the richest.
* 64% of rich households spent money on dental care compared to 29% of poor households.

http://www.policyalternatives.ca/reports/2009/09/article2312/?pa=BB736455
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Two Scoops
@Buy in Canada
"Buy Made in Canada "
Not necessarily, if we buy imported products at cheaper prices it can open up capital to spend on Canadian services.

@Canadian Young Earn Less
The reason why young people are making less than their parents is because the boomers are being to reluctant to retire and are keeping jobs that should have shifted by now.
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bankrupt?
This last August the Conservatives quietly made it MUCH harder for the middle class to declare bankruptcy. In other words you can be forced to pay more money than ever before to declare bankruptcy or be prevented from declaring altogether (perpetual debt).

Some of the changes to Canada's bankruptcy now in effect

Consumer proposal threshold

* The debt limit for filing a consumer proposal has been raised from $75,000 to $250,000, excluding a mortgage on a principal residence.

Surplus Income

* If you are bankrupt and have surplus income of $200 or more each month, the bankruptcy period is automatically extended from nine months to 21 months. In the case of a second bankruptcy, the bankruptcy period is extended to 36 months.

Secured Lenders

* A secured lender cannot terminate a contract simply because you have filed for bankruptcy. For example, if a bankrupt individual has a car loan and the payments are up to date, they may continue to pay the car loan and keep the car, even if they go bankrupt.

Income Tax Threshold

* Individuals that owe more than $200,000 in income tax, and that debt represents more than 75 per cent of their total debt, including penalties and interest, must now go to court to get a discharge.

the new rules mean:

1. More money to the bank.
2. Still no limit on cc interest.
3. Still no limit on fees.
4. Still no limit on who can get credit under what conditions.
5. The banks will be laughing all the way to... the bank, because now their most vulnerable customers have almost no "last resort" option available.

http://www.theglobeandmail.com/globe-investor/
personal-finance/changes-to-canadas-bankruptcy-laws-kick-in/article1292325/
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Billy Jack Douthwright
... does this mean that they are due for a cyclical 'Depression'?.., and if so, does anyone want to make a guess about what forms of economic reform will result?
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Em
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Money Supply
The increase in this gap correlates with the incredible expansion in money supply since Alan Greenspan started forcing interest rates down after the tech bubble burst. The rich got richer because they have first crack at the new money being introduced. By the time it makes it to poorer hands, the market has adapted to the new supply and the value of those dollars has decreased.

Canada is caught between a rock and a hard place because if we let our dollar float above the tanking US dollar we will lose a lot of customers in our biggest marketplace.
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mapleirdgepss
With the amount of homelessness and squalor on the streets of Vancouver, I find the hypocrisy of this article breath taking. At least the USA doesn't falsely purport to care about the have-nots. Canadians bleat endlessly about its compassionate society while the evidence on the streets says otherwise. In fact, of all the developed countries I've visited, Canada has the worst in your face social problems I've seen. Clean up your own disgusting act Canada before criticizing others. You are nothing special.
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hypocrites
mapleirdgepss wrote:"Clean up your own disgusting act Canada before criticizing others. You are nothing special."

Do you know how bad they got it in Somalia. We're not as bad as Honduras...

It's just that when we look in other peoples back yard and see their mess we can continue to ignore our own.
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Erin Jo
It is hard for anyone to become wealthy, especially the poor. Lets not be ignorant, not everyone wants, or can achieve wealth.
The American dream only applies to those who've been socialized into dreaming it.

Maybe the communists are on to something.
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vancanada
Canada, as much as the US, has swallowed the line that if we work hard enough, we will get rich. Why else are the Conservatives the ruling party? Why has the Liberal party moved more and more to the right over the years? Public resources are thoughtlessly tossed to the free market, and its each man for himself. We've adopted the notion of "taxpayer" over public citizenry, depriving the poor of even the dignity of recognition. And yet, so many still hold fast to the delusion that they are more likely to become rich than fall into the sad abyss of poverty.
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