3/15/2012 2:17 PM ET|
Fast-growing income gap in US
Statistics paint a picture of a widening divide between the rich and the poor, with incomes of the rich going up much more than those of everyone else.
If you're an "average" American, you earn close to $40,000 a year -- pretty good money compared with the rest of the world.
But recent data from a number of sources conclude that the average U.S. income, while solid among its peers around the world, still leaves many grappling to make ends meet. Additionally, the 2011 U.N. Human Development Report finds the gap between the rich and poor in the U.S. continuing to widen.
First, what seems to be good news: For 2010, the average U.S. income was $39,959, according to the Social Security Administration. However, the median income -- meaning half of Americans made more, half made less -- was substantially lower, at $26,364.
The U.N. analysis uses yet another measurement. That report puts the United States' gross national income per capita at $43,017, relatively high compared with its industrialized counterparts. The top 10 per capita countries are:
- Qatar, $107,721
- Lichtenstein, $83,717
- United Arab Emirates, $59,993
- Singapore, $52,569
- Luxembourg, $50,557
- Kuwait, $47,926
- Norway, $47,557
- Brunei, $45,753
- United States, $43,017
- The Netherlands, $36,402
Overall, the U.S. placed fourth in the U.N. study's Human Development Index, which measures three basic factors of human well-being: a long and healthy life, education and standard of living. Norway, Australia and the Netherlands occupy the top three spots.
The comprehensive U.N. study examines a number of factors, including income, environment and gender equality, with a focus on identifying programs and strategies that are effective in promoting well-being and prosperity.
What 'average' will buy
Unfortunately, in the U.S., an average $40,000 income often means living paycheck to paycheck and, perhaps more significant, living beyond your means. To that end, the Federal Reserve reported a nearly 10% jump in overall consumer debt in November 2011, to $2.48 trillion -- the biggest one-month percentage increase in overall debt in more than 10 years.
"The average American struggles," says Ronald Hill, a professor at Villanova University who has studied poverty worldwide. "They have an old car they're struggling to keep on the road, they may be late with rent payments, and they can't afford to send their kids to college. At $40,000 a year, they probably haven't been on a vacation in five years. They feel great restrictions."
Moreover, the U.N. study also says the growth in financial inequality in the United States easily outpaces its peers. Moving down the list, it's not until you get to Chile (No. 44 in the overall study) that there's a faster-growing gap between the wealthy and the poor.
According to the Internal Revenue Service, the average U.S. income, when adjusted for inflation, declined 1% between 1988 and 2008, while Americans making $380,000 or more saw their incomes grow 33%.
"What's striking about the United States is that, comparable to other countries of comparable income, the inequality in the United States is much wider than any other country," says William Orme, a spokesman for the U.N. report. "That's not only the result of increasing concentration of wealth at the top but the stagnation of income for the bottom 75% over the last 10 years. The U.S. is certainly not unique in having little real significant income growth, but the disparity is more acute."
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"It's not until about $50,000 where people reach the place where they don't need any help, and it's not until the $60,000 to $70,000 range that they begin to stop living beyond their means," he says. "They would certainly be getting by, but they wouldn't be doing great. Realistically, you would almost need to double that income average in the United States to feel like you were living a reasonable life."
Don't know about the rest of you, but I take offense at this. "...where they don't need help." A condescending, smug, trite, out-of-touch waste of space and resources trying to pass themself off as an intellectual is all I see behind these words.
It may come as a surprise to this person, but there are many who earn much less than this and are much more fiscally disciplined than their wealthier counterparts. They don't have outstanding debts and are, for the most part, self-sufficient.
Implying that a person's life is less "reasonable" based on their financial state is also absurd.
If unions are the problem how do you account for union membership being at lowest level since Reagan and in that time the disparity between incomes of the 1% and everybody else has grown tremendously. Why is during this same period of time when there have been a huge increase in worker productivity but yet wages are flat. This condition of increased productivity and flat wages occurred in 30s too. Gee what happened in the 30s?
I have an MBA and accounting degree and make 40K. It isnt about education. In the 90s the CIS programs were huge and grads were getting out making 50-70K. Corporations figured out they could get it done cheaper overseas. There are tons of highly educated people that are unemployed or working as waiters. Age discrimination is a huge unenforced problem too.
IMO too many people are considered as living below the poverty line when a lot of income or assistance is not counted as income. In fact unemployment insurance is one of very few assistance programs that counts as income .Most government assistance programs, such as food stamps, housing, utilities, Medicaid, free school lunches, free cell phone with 250 minutes per month, WIC, SSI and etc. are not used by the Census Bureau when determining whether a person fell below the line, which is, currently, $22,314 for a family of four. By counting Food stamps as income there would be 3.9 million less people in poverty. If EITC (Earned Income Tax Credit, given to low income Americans had been counted as income there would be 5.6 million less people in poverty.
Let's put everyone on the same level by counting assistance as income.
We started talking about this problem 3 years ago and it still exists and you say is getting worse.
I think our government must like it just fine the way it is then, because they could do something about it if they wanted to.
The way we can solve this is : Become a MILLIONAIRE...
Not jealous, more horrified than anything Native537. I've never had the cushioning of a union, and I see what they get away with.
They cannot be fired easily if they are not performing - it takes a great amount of time and money to remove union employees that aren't up to par.
They work less hours than anyone - not supposed to take lunch to meet their hours - yet they take an hour everyday and work 7:00AM to 3:00PM.
Please, unions have the life.
It's not to say that the Banks, the Corporations, etc... are not the hugest factor but Unions have become a problem as well.
Unions were a good thing, now they are ridiculously overpaid, over-protected and lazy.
I work with Union people and they are nepotistic and hugley unfair. They get pensions, 35 hour workweeks, everything that someone non-union can only dream of.
We the people have come up with several ways to increase taxes and deal with our deficit and the unfair taxation of all those earning lett than 250K: tax religions, bust the unions, tax company profits at higher rates, tax companies that take their operations to other countries.
Gerrrr53: excellent points and I am in total agreement with your ideology and comments. Why can others NOT see this?
George W. was the antithesis of productivity, intelligence, political savvy and humanity.
The block everything do nothing Republicans can spin all they want about the deficit ... but the deficit belongs to them/Bush and the continued idiocy of the Bush tax cuts for the wealthy that are suppose to create jobs! INSTEAD THEY GOT ALL THE MONEY! They started the massive job losses, the bank failures, the auto industry in bankruptcy all with a needless unpaid for war. I'll take the present economy any day to those idiots. We've got an effective pragmatic leader in Obama who is cleaning up the mess with no help from them so celebrate our success in avoiding a massive depression caused by Republican leadership and the needless war! The deficit is coming down and will come down further!
How things are better in the last 31/2 years: I know the list of successes for this President will never be long enough for the Republicans..... even when the Dow hit 14,000 and their 401Ks have spilled over with money!......it will still be about banning contraception and going to war with them.
Negotiated a nuclear moratorium with North Korea!
24 months of job growth, rather than the 4,000, 000 jobs lost in the last 3 months of Bush
Bin Laden dead, Bush said he didn't care where he was..he didn't think about him much
Auto industry back and growing
Health care reform.. with preventive care which saves you money
401 Ks back
Credit card protection reform
Banking protection reform
Equal pay for women in the work force
TAX CUTS PROVIDED TO YOU unless you make over $250,000
A positive GDP
Ending of a useless war In Iraq
Stock Market back
Student loan reform
Pell Grant reform
Lowest interest rates in 50 years!!!
Killed 11 times as many terrorists as GW - That is a bonus
Started the withdrawal from Afghanistan
Removal of DADT
Managed a Natural disaster in the Gulf better than Bush handled a hurricane response.
Oil production coming from the US is at an all time high..rising oil and gas production, and a greater mix of energy sources and decreased consumption.
Stopped a pipeline that was opposed by the state it was going to run through until they can reroute it away from the aquifer.
Did I help you out and answer your question… Obama 2012
I agree with you 100%
Unions are the ruination of our country.
No longer needed, they are totally corrupted and in the politicians pockets.
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