An interesting series of articles caught my attention today and yesterday. They had to do with our incomes in America. First off, let me say, I'm all for unfettered income growth opportunities. My question is Being the most creative country in the world...an economic juggernaut at times (maybe even now)...why have we created a situation where so much income is gained by so few while at the same time so many see their incomes decline.
It started off last night with 2005 Incomes, on Average, Still Below 2000 Peak. The average income for Americans fell 1% in 2005 compared to that earned in 2000, when adjusted for inflation.
Total income listed on tax returns grew every year after World War II, with a single one-year exception, until 2001, making the five-year period of lower average incomes and four years of lower total incomes a new experience for the majority of Americans born since 1945.
But there was growth in income among those folks in the top 1/4 of 1% (.0025) of income earners in the US. Their income grew by 47% for this same time period. ( You have to wonder then...without this group's income growth how great would the decline in total income for Americans be during this 'recovery'.)
* ...28 percent of the investment tax cut savings went to just 11,433 of the 134 million taxpayers, those who made $10 million or more, saving them almost $1.9 million each. [ 28 percent of the tax cut savings went to...1/100th of the population (.0001)]
*...$21.7 Billion in taxes were saved by this same group...of 11,433 American taxpayers.
* The nearly 90 percent of Americans who make less than $100,000 a year saved on average $318 each on their investments. [120.6 million Americans...$38 billion]
* They collected 5.3 percent of the total savings from reduced tax rates on investment income. 5.3% of the tax savings went to 90% of the population.
One WH spokesman described this as not a very interesting story. Another WH spokesman said he would not be able to make it to the end of this administration, just financially. He earns $168,000 a year.
And yet despite the decline in incomes...more and more of us are working longer and longer hours. This article, How I Didn't Spend My Vacation shares this factoid:
A 2007 survey by the travel Web service Expedia found that 23 percent of employed adults check work e-mail or voice mail on vacation, compared with 16 percent in 2005.
Lastly, this bit of data from CondeNast titled What Excessive Pay Package. It highlights the growing disparity between CEO pay and that of the average worker. It has sliding scale so you can see the growing disparity between 1970 and 2005. (That 2005 year keeps coming up...)
* 1970: US CEO's were paid 28 times more than the average worker.
* 1980: US CEOs were paid 54 times more than the average worker.
* 1990: US CEOs were paid 130 times more than the average worker.
* 2000: US CEOs were paid 548 times more than the average worker.
* 2005: US CEOs were paid 465 times more than the average worker.
So there's some progress made towards more realistic income packages for CEOs.
Again...Being the most creative country in the world...an economic juggernaut at times (maybe even now)...why have we created a situation where so much income is gained by so few while at the same time so many see their incomes decline.
I know the potential for rants and screeds from content like this. But then that's kinda the issue. It's polarizing, we're polarized. Historically speaking, there's ample data that shows country with a wide gap in income levels don't survive. Growth is the key to success. And when the gap between the haves and havenots becomes so great...then the path to that prosperity is lost to by the have nots. And growth is lost. Growth in jobs and oportunity occurs here...not there.
The sacrifices necessary to achieve that goal become too great or the goal too far or the two too disconnected. The social contract which includes the rewards from sacrifices for yourself and your children and the next generation is lost. Why bother becomes the motto instead of beacon of hope, land of opportunity, The American Dream.
What do you think?
Link to What Excessive Pay Package provided by Mark Hurst of Good Experience in his newsletter today.
