Thirty-Five Cents for One Person, Sixty-Five Cents for Ninety-Nine

Let’s quit fooling ourselves. Across the board, economists are reporting 1% of the U.S. population holds up to 35% of the country’s net worth, and that moves to over 40% if home ownership of the 99% isn’t counted. That reflects a widening gap from the disparity of the1950s of 31%. We are moving backward to before the stock market crash of 1929 when it was 44%.

To press the point, on March 13, 2001 the Sunday newspaper supplement, Parade, ran its annual jobs report of Americans. Photos of wage earners ran with their annual income and job title. The lowest was $7,000 for a lifeguard and the two highest were a Las Vegas plastic surgeon earning $1,000,000 and a California real estate agent with $1,605,000. Throw those three out and I bet the rest look like the face of the rest of the country.

The third top salary was $177,000 (an astrologer), which means no one was listed as earning between that and the one million. I’m sure they exist, though in fewer numbers because a lot of them have been fired lately. That leaves us bottom fishes to look about and see where we live. Throwing the lowest and two highest out, the total wages for the remaining forty-seven was $3,017,000, or an average of $64,191. Parade listed the median (half above, half below) annual salary as $28,580.The $28,580 figure has real implication because the federal poverty level for a family of four in 2009 was $22,050, only $7,000 less than these healthy, productive, and willing to work men and women in Parade earned.

There are a number of people shown that I would guess overstated their earnings. I know because at one time I was one of them. Small business owners and independent entrepreneurs are notorious for both innocently, but wrongly or purposely exaggerating their personal income. They know how much money they took in during a year and some of them publicly report that, which doesn’t make any allowance for cost of doing business, but it sure sounds better.

That aside, why play with these salary numbers at all?

Because it’s estimated that since 2000 an item that cost $20 would now cost over $25, a 25% increase. What all this currently means is, that for every one dollar in this country, 35 cents goes to one person and 99 people share 65 cents. That’s worse than the ever repeated glass ceiling of 70 cents women make compared to a man’s dollar. A ceiling is knocking on a few male noggins, too.

What’s to be done? I’m not sure, and what makes it worse is this widening gap has grown since the mortgage industry debacle. Big business appears to be recovering without seeming to scuff their Italian shoes, while many of us have been cleaned out of the job market like lint from their wallets. Too many people are scrambling for jobs at lower wages than they had three years ago so food can be set on the table the night before the house is repossessed.

In the iconic study by Michael I. Norton and Dan Arierly in Perspectives on Psychological Science, they presented a sample of Americans with three pie charts showing income distribution of anonymous countries. One showed five evenly distributed income ranges, the second had the distribution of the U.S. and the third was Sweden with close to a third of its citizens earning the highest amounts. Few Americans cared for the evenly distributed example, but the majority myopically thought we had Sweden’s distribution.

The people pictured in the Parade magazine deserve better. They work hard and they deserve the wages that keep them further above the poverty level than they are receiving. But, until a majority of working Americans quit kidding themselves about how greedy top management has become, and stands together for higher wages, it’s not going to change.

References

Abele, Robert, Parade, March 13, 2011.
Domhoff, G. William, Wealth, Income, and Power, www.sociology.ucsc.edu/whorulesamerica/power/wealth.html.
Norton, Michael I., and Dan Ariely, Building a Better American — One Wealth Quintile at a Time, Perspectives on Psychological Science.
US Government CPI data, www.usinflationcalculator.com.

 

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