Income Disparity In US Continues

Middle-class incomes have been stagnant for at least a generation, while the wealthiest tier has surged ahead at lighting speed.

In 1988, the income of an average American taxpayer was $33,400, adjusted for inflation. Fast forward 20 years, and not much had changed: The average income was still just $33,000 in 2008, according to IRS data.

Meanwhile, the richest 1% of Americans – those making $380,000 or more – have seen their incomes grow 33% over the last 20 years.

Experts point to some of the usual suspects – like technology and globalization – to explain the widening gap between the haves and have-nots.

But there’s more to the story.

One major pull on the working man was the decline of unions and other labor protections, said Bill Rodgers, a former chief economist for the Labor Department, now a professor at Rutgers University.

Because of deals struck through collective bargaining, union workers have traditionally earned 15% to 20% more than their non-union counterparts, Rodgers said. But union membership has declined rapidly over the past 30 years. In 1983, union workers made up about 20% of the workforce. In 2010, they represented less than 12%.

Without collective bargaining pushing up wages, especially for blue-collar work – average incomes have stagnated.

International competition is another factor. While globalization has lifted millions out of poverty in developing nations, it hasn’t been a win for middle class workers in the US. Factory workers have seen many of their jobs shipped to other countries where labor is cheaper, putting more downward pressure on American wages.

“As we became more connected to China, that poses the question of whether our wages are being set in Beijing,” Rodgers said.

Finding it harder to compete with cheaper manufacturing costs abroad, the US has emerged as primarily a services-producing economy. That trend has created a cultural shift in the job skills American employers are looking for.

While average folks were losing ground in the economy, the wealthiest were capitalizing on some of those same factors, and driving an even bigger wedge between themselves and the rest of America.

Continue via CNN

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One Comment to “Income Disparity In US Continues”

  1. I strongly suspect that neither political party really knows what to do regarding the economy, nor do the experts, although they have opinions and theories. The problem is simply too large, complex, and interconnected with economies of other nations, over which the US has no control.
    To fix most things in the universe, you have to get them to “sit still” at least for a short period of time, and suspend those outside factors bearing on the problem. This is a dynamic situation. If we as a society actually knew what worked, and could establish a cause and effect relationship with any certainty, we would have done it by now.
    Is it possible, as postulated by some, that the liberal, conservative, progressive, corporate and banking interests, and libertarian POWER FORCES in our society are laughing all the way to the bank, and that we minions with little money and power are the ones complaining? And that because of new technological advances in communication and the power of the Internet, the voice of the minions is now being disseminated with greater force, essentially saying, “Stop! Enough is enough!”?
    Furthermore, is this a case of the minions fighting for limited scraps at the bottom of the heap, while the real riches are controlled by a few? Have we at the bottom been pitted against one another?

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