Thanks to a good friend of Sense on Cents for sharing an array of truly startling statistics about the distribution of wealth in our nation today. These stats are embedded in a recent article which ran at Yahoo Finance entitled, The Middle Class in America Is Radically Shrinking. Let’s review the statistics first and add comments later:
• 83 percent of all U.S. stocks are in the hands of 1 percent of the people.
• 61 percent of Americans “always or usually” live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.
• 66 percent of the income growth between 2001 and 2007 went to the top 1% of all Americans.
• 36 percent of Americans say that they don’t contribute anything to retirement savings.
• A staggering 43 percent of Americans have less than $10,000 saved up for retirement.
• 24 percent of American workers say that they have postponed their planned retirement age in the past year.
• Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.
• Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.
• For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.
• In 1950, the ratio of the average executive’s paycheck to the average worker’s paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.
• As of 2007, the bottom 80 percent of American households held about 7% of the liquid financial assets.
• The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.
• Average Wall Street bonuses for 2009 were up 17 percent when compared with 2008.
• In the United States, the average federal worker now earns 60% MORE than the average worker in the private sector.
• The top 1 percent of U.S. households own nearly twice as much of America’s corporate wealth as they did just 15 years ago.
• In America today, the average time needed to find a job has risen to a record 35.2 weeks.
• More than 40 percent of Americans who actually are employed are now working in service jobs, which are often very low paying.
• for the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.
• This is what American workers now must compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.
• Approximately 21 percent of all children in the United States are living below the poverty line in 2010 – the highest rate in 20 years.
• Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.
• The top 10 percent of Americans now earn around 50 percent of our national income.
Sense on Cents comments:
1. Our national prosperity will not be sustained in which the very few control the vast majority of the wealth.
2. Is it any surprise why major corporations buy political and regulatory cover? The money spent on lobbying has obviously paid huge dividends.
3. Are those in lower income categories there because of the business practices of those in upper incomes? In my opinion, if we promote that reality (which many in our nation are wont to do), then I think we have lost our future. There remain real opportunities along with new avenues of growth in our nation. The spirit of competitiveness and drive, which has made our nation great in the past, is of paramount importance to drive our nation into the future. What is needed to spark that drive and competitiveness? An insatiable appetite for skills and education supported by the care and love of a strong family.
4. I strongly believe America needs to learn to live within, if not below, its means. Saving early and saving often needs to become a way of life. Allowing the savings to compound is the best path to wealth creation.