Why it seems your income is treading water

Most Americans' compensation has risen only $59 since 1966, according to a new analysis. The top 10% of earners fared far better.

By Aimee Picchi Mar 26, 2013 12:50PM

Image: Piggy bank (© Le Club Symphonie/Ian Nolan/Photodisc/Getty Images)A lot has changed since 1966, when "Star Trek" first aired on TV and Toyota (TM) introduced the Corolla


But one thing that hasn't budged much is Americans' inflation-adjusted income, according to a tax analysis by Pulitzer Prize-winning journalist David Cay Johnston.


For Americans in the bottom 90%, the "vast majority averaged a mere $59 more in 2011 than in 1966," writes Johnston, who adds that the figure is "jaw-dropping."


That means most Americans gained only enough income to buy movie tickets, popcorn and soda for a family of four -- for just one visit to the multiplex per year. 


Not all Americans saw their wages stagnate, however. Since 1966, the top 10% of earners saw their incomes jump by $116,071, reaching $254,864 in 2011, Johnston writes. His analysis is based on research by economists Emmanuel Saez and Thomas Piketty. (As I wrote in MSN moneyNOW last month, Berkeley economist Saez recently found that only the top 1% saw average real income growth between 2009 and 2011.)


"That disparity in income growth rates comes as the total federal tax burdens on those at the top have been slashed, compared with 1966, especially for the long-term capital gains that account for about a third of total income at the very top," Johnston points out. 


Johnston's analysis provides a sobering long-term look at why so many Americans feel they're working harder than ever to keep their heads above water. With rising costs for everything from food to a college education, a $59 income gain over four decades isn't going to help.


To be sure, some other recent research indicates the rich have gotten socked by higher taxes, with federal tax bills approaching 30-year highs. 


But in more bad news for America's struggling middle and lower classes, the very rich don't necessarily have priorities that align with have-nots, according a study from Vanderbilt University researchers


Today's Daddy Warbucks "are much less willing than others to provide broad educational opportunities, including 'spend(ing) whatever is necessary to ensure that all children have really good public schools they can go to' or 'mak(ing) sure that everyone who wants to go to college can do so,'" according to the researchers, who surveyed 83 Chicago-area residents with an average wealth of $14 million. 


The elite also oppose government redistribution of wealth, favor lower estate tax rates and lean toward supporting cuts in social programs such as Social Security to reduce the deficit, the study found. 


But the uber-wealthy are also more likely to be politically active, with two-thirds of them contributing to campaigns and giving an average of $4,633 to candidates or organizations in the previous year. 


More on moneyNOW

101Comments
Mar 26, 2013 1:41PM
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In 1966 my father was the sole income for our household and his job provided medical coverage for the family. Today I am seeing young families with both mom and dad working low wage jobs that provide no benefits at all, and not even treading water. Do the studies take into account single or duel income house holds. If not we may not even be treading water, looks like we maybe drowning. America can not sustain it self on part time minimum wage jobs, with a government trying to provide everything else the good jobs use to include, health insurance, retirement plan, and benefits, just to give the illusion that the American Dream is alive and well. We need our jobs back from overseas and from the traitors who sent them there.   .   .  
Mar 26, 2013 1:05PM
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"The elite also oppose government redistribution of wealth"

 

No shlt sherlock?

Mar 26, 2013 2:14PM
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and even worse in the last 7 years I have no raises and lost benefits. I am supposed to be 'glad' and 'lucky' to have kept my job, but I wonder......my family is paying a price for this and will for years to come.  I am white-collar and middle class but feel like I am stuck in a deep hole.
Mar 26, 2013 3:13PM
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Tax rates, spending cuts, baby boomers are sucking the system dry, the young generation refuses to work, I want to keep what I earn........

These are all ways to keep America divided while the super rich control everything.  The ones in government get gifts from lobbyists in return for tax exemptions then when they leave government they are put on the boards of the same companies.  Unlimited campaign contributions have made it so only the super rich can run for office so it's become one big super circle of friends enriching each other at America's expense.

Think about it, America spends 17.5% GDP on health care and 40 million have been without coverage.  Most countries spend 14.5% and cover everyone, why?  Well paying $6.00 for a pill that you can get anywhere else for 50 cents or allowing hospitals to charge $40.00 for a pill dispenser which is in fact a paper cup might be part of it?  Now multiply that by BS and imagine it in the defense department and every other department and throw in subsidies like farming, oil, unions and everything else you can think of and you get where the country is today. 

The super rich telling you it's your neighbors fault while it's them all along.......

Mar 26, 2013 2:48PM
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Board of Directors Scam: I know some will say they EARNED it. Really?  Fortune 500....

Median pay for outside directors, over $200,000, average work week, Less than 5 hours.

Here's the Rub, they get to actually vote on their own pay. Do you?


Mar 26, 2013 3:30PM
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People who aren't Republicans can't just be labeled as socialist, etc. Some might suggest that I am such. That is Not the case. Everyone by now has heard about the 17 year old that got  $30mil from yahoo.

I have ZERO problems with that. In fact, he might end up being underpaid. That's the risk you have on either side. I have ZERO problems with folks investing their money and making millions/billions in stocks or whatever.

The problem mostly centers around lazy CEOs claiming to EARN wages at companies where workers are doing most if not all of the work. The problem lies with dishonest players getting bailed out by the FED/Government while the rest of us are left to fend for ourselves.

Mar 26, 2013 3:02PM
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The biggest questions is how can anyone claim that most CEOs have EARNED 380 times the wages of the average worker. Some will claim that one guy barking is worth more than the guys actually doing most of, if not outright at times, all of the real work.  How many times do CEOs limit work via countless meetings and pointless new guidelines. Workers know how to do their jobs and our productivity increases have proven that over the years. What have they(CEOs) really proven?

But sure, you go ahead an claim how the barking dogs EARNED it. How dense do you have to be to buy that crap. That's not promoting socialism, that's promoting what use be called plain old commonsense.
Mar 26, 2013 2:27PM
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I am still trying to understand why so many think the elite have actually EARNED what some of them make. What proof does anyone have that they EARNED it. Meanwhile, these same folks will claim others have NOT EARNED a right to a Living Wage.

Thing is, you have to FIRST EARN what you claim is your right to keep. Many at the top have not. Yet they are first to claim you haven't earned a darn thing. That's the madness that's sweeping this country.

Mar 26, 2013 1:33PM
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   They do not support the redistribution of wealth? I suppose you find that suprising. Do you suppose the bottom wage earners would support redistribution of wealth?

   I think that I should keep what I work for and earn and you should do the same. Explain to me why I am wrong to think so.

Mar 26, 2013 3:04PM
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What else I would like to know is, where the heck can you take a family of four to the movies, get popcorn, and soda all for 59$???
Mar 26, 2013 8:28PM
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The US dollar is the benchmark of the world ! Other countries buy oil? They pay in US dollars , not their currency . That being said the only place in the world to print the US dollar is the federal reserve who is pumping 85 billion a month into wall street devaluing the US dollar . Once the US dollar is no longer the benchmark of the world and another currency takes over we are toast , the USA...Will no longer be able to print our way out of debt . The FEDs better tighten up the money soon or our dollars will be worthless and gas will be 20$ a gal and a big mac will cost 15$ That a boy Ben running the USA into the ground. With your QE program . Watch it happen America ... Its the demise of the US dollar as the main currency of the world. Other countries are already moving their gold out of the USA . And are selling their products in other currencies than the dollar. <<< Thanks Ben you Harvard POS.... 
Mar 27, 2013 7:16AM
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 "One in 5 now collect food stamps."

 

That's at least 80 million Americans.  Would you reather have machines spit out cheap facsimiles of formerly well-made goods and no jobs, or jobs makling well-made goods and a robust economy? Time to take a serious look at where we are headed America.

Mar 26, 2013 10:41PM
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Good point Float'.....Yeah, just try taking away a "rich person's" Social Security...

It's good for them, but not the masses..

Mar 26, 2013 8:07PM
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And people wonder why there are 50 million Americans on food stamps.  We will be just another 3rd. world country in a few more years.  
Mar 26, 2013 10:34PM
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Quote:

"But the uber-wealthy are also more likely to be politically active, with two-thirds of them contributing to campaigns and giving an average of $4,633 to candidates or organizations in the previous year." - end quote


Excuse me, but there are other ways to be politically active besides donating to some candidate.

Are you implying that those of us who don't have money to donate AREN'T politically active?

and -

Quote:
"The elite also oppose government redistribution of wealth, favor lower estate tax rates and lean toward supporting cuts in social programs such as Social Security to reduce the deficit, the study found. " - end quote.
Of course. The middle class and working class don't need the money they paid into Social Security like the elite need their money. Most of us wouldn't know what to do with 2 extra bathrooms and 7 bedrooms that no one uses....and we'd have to clean them ourselves, right?
Har har har.

Car elevators for everyone!

Mar 26, 2013 2:04PM
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"The elite also oppose government redistribution of wealth, favor lower estate tax rates and lean toward supporting cuts in social programs such as Social Security to reduce the deficit, the study found."

How is this news and why was money spent on a study for this? Here's the thing, I went to school so I could make more money than someone flipping burgers. My boss invested more time/money so that he *could* be the boss. Do I think someone flipping a burger who only has a high school diploma (if that) should make what I did when I worked harder to get where I am? No. Do I think I should make as much money as my boss since he invested more time and money into his education? No.

How about I work and keep what I earn. My boss works and keeps what he earns. If you want more than that, there are programs available to people who want to better themselves. I was able to go back to school and the state paid for since they said I had no marketable job skills. There are options other than loans if you're willing to look hard enough for them.
Mar 26, 2013 5:33PM
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The leech class expands, the middle class shrinks, and the socialist crusade moves forward...

Mar 26, 2013 9:40PM
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So the average income only went up $59 but people have been spending like it's doubled.

We all exist to serve the 10%.

Mar 26, 2013 3:17PM
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In Mpls, cost of a family of 4 each with popcorn/pop to the movies is closer to $75.
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