Here we go again. The US Government is trying to convince us how great the economy is booming. Umm. BS! (I sure am tired hearing how a rising tide raises all boats. Especially when the size of the boat affects how quickly and strongly that tide raises up the boats.)
Sure, you can massage the numbers- just like the government wants us to think.. And, the current massage technique is to use median incomes. Which shows that we had a median income increase of 3.2% over the past year, providing a median income of $ 59039. An all time high! Oh, wait! It’s exactly a 0.6% increase since 2000! Whoa! Let’s all celebrate, right?
There’s more. You see in 2013, the Census Bureau changed the way it computes median income. Why? Because it made the numbers look a little better than they did years ago. But, the Economic Policy Institute has continued to track income using the new AND the old methods. And, guess what? If we use the old method, median income is 1.6% BELOW where it was in 2007- and 2.4% below the 1999 levels. Woo-Hoo!
Or, I can quote you another set of numbers. Our total net worth has reached record territory. The Federal Reserve has determined that net worth has increased by $ 1.7 trillion in the second quarter (now at $ 96.2 trillion overall)- but that’s because home values are rebounding and stocks have been skyrocketing. And, this is the 7th quarter in a row that’s been happening.
Uh-oh. Who is a homeowner? About ¾ of the White population in the US. But, only about 40% of the Blacks and about 45% of the Hispanics. Hmm. Looks to me that we have a clearly defined case of wealth inequality. Since about ½ of Americans own stocks (52% to be precise) that gain sounds more widespread. Except more than 93% of the top 10% in wealth own stocks, with the next decile (top 11-20% of incomes) dropping below 82%, the next one (top 21 to 30% of incomes) below 70%, with stock ownership barely at 50% for the median income (40 to 59.9% of income strata). Again, mostly the rich benefit by the rise in stock prices.
You know it gets worse.
Because if you examine all US income, the data demonstrate the real effect of income inequality. If one is in the bottom 20% of US households, income growth since 1999 has been -9%. (Yes, that means it’s dropped 9%!). Those in the next 1/5 (20 to 40%) experienced a 2.6% drop. The median incomes (40 to 60%) also experienced negative income growth to the tune of -1.9%. But, rest assured, the top 20%? Their income grew- but that data is really skewed, because the top 5% really accounts for the entire increase of that strata! You see the strata from 80 to 85% had a very slight increase of 0.3%, but the top 5% exceeded 1% growth. (Yes, that means the overall numbers still are pretty putrid.)
How about this massage? The 1% managed to accrue 24% of all US income; plus the median net worth for White families (~$171,000) was some 10 times that for Blacks ($17,600). Yet, less than 20 years ago, the 1% controlled a still large, but smaller amount (17% )of the US income.
And, now, for the first time ever, the bottom 90% didn’t eke out even ½ the US income. Which contrasts dramatically with what the bottom 90% took in just 20 years ago- more than 60% of the total income.
Here comes the piece de resistance! The income growth is more related to the fact that part-timers are finally getting more hours to work and more people per household are working. By gender, the numbers are also disheartening. Men (roughly 58% of the full-time working population earned almost $ 52K, while women (42.49% of the working population) only earned $ 41,250 or so.
We have to remember, that numbers don’t lie. But, how the numbers are presented can provide a completely different picture than what is truly happening.