The Demise of the American Middle Class In Numbers.
Over the past 60 years the American dream has gradually disappeared. The process was slow, so most people didn’t notice. They just worked a few more hours, borrowed a little more and cut back on non-essentials. But looking at the numbers and comparing them over long time periods, it is obvious that things have changed drastically. Here are the details:
1. WORKERS PRODUCE MORE BUT THE GAINS GO TO BUSINESS.
Over the past 63 years worker productivity has grown by 2.0% per year.
But after 1980, workers received a smaller share every year. Labor’s share of income (1992 = 100%):
1950 = 101%
1960 = 105%
1970 = 105%
1980 = 105% – Reagan
1990 = 100%
2000 = 96%
2007 = 92%
A 13% drop since 1980
2. THE TOP 10% GET A LARGER SHARE.
Share of National Income going to Top 10%:
1950 = 35%
1960 = 34%
1970 = 34%
1980 = 34% – Reagan
1990 = 40%
2000 = 47%
2007 = 50%
An increase of 16% since Reagan.
3. WORKERS COMPENSATED FOR THE LOSS OF INCOME BY SPENDING THEIR SAVINGS.
The savings Rose up to Reagan and fell during and after.
1950 = 6.0%
1960 = 7.0%
1970 = 8.5%
1980 = 10.0% – Reagan
1982 = 11.2% – Peak
1990 = 7.0%
2000 = 2.0%
2006 = -1.1% (Negative = withdrawing from savings)
A 12.3% drop after Reagan.
4. WORKERS ALSO BORROWED TO MAKE UP FOR THE LOSS.
Household Debt as percentage of GDP:
1965 = 46%
1970 = 45%
1980 = 50% – Reagan
1990 = 61%
2000 = 69%
2007 = 95%
A 45% increase after 1980.
5. SO THE GAP BETWEEN THE RICHEST AND THE POOREST HAS GROWN.
Gap Between the Share of Capital Income earned by the top 1%
and the bottom 80%:
1980 = 10%
2003 = 56%
A 5.6 times increase.
6. AND THE AMERICAN DREAM IS GONE.
The Probably of Moving Up from the Bottom 40% to the Top 40%:
1945 = 12%
1958 = 6%
1990 = 3%
2000 = 2%
A 10% Decrease.
Links:
1 = ftp://ftp.bls.gov/pub/special.requests/pf/totalf1.txt
1 = https://www.clevelandfed.org/Research/PolicyDis/No7Nov04.pdf
1 = http://2.bp.blogspot.com/_Zh1bveXc8rA/SuddUhLWUaI/AAAAAAAAA7M/iU2gefk317M/s1600-h/Clipboard01.jpg
2 – http://www.whitehouse.gov/omb/blog/09/04/27/CongratulationstoEmmanuelSaez/
3 = http://www.demos.org/inequality/images/charts/uspersonalsaving_thumb.gif
3 = http://www.bea.gov/national/nipaweb/TableView.asp?SelectedTable=58&Freq=Qtr&FirstYear=2008&LastYear=2010
4 = http://www.prudentbear.com/index.php/household-sector-debt-of-gdp
4 = http://www.federalreserve.gov/releases/z1/current/
5/6 = http://www.businessinsider.com/15-charts-about-wealth-and-inequality-in-america-2010-4?slop=1#slideshow-start
Overview = http://www.ourfuture.org/blog-entry/2010062415/reagan-revolution-home-roost-charts
