Wages in America, Most of Us are Have Nots

There are 150,917,735 wage earners in this country for 2009.   That said, 24,315,992 of them earned less than $5000.    50% earned less than $26,261 in 2009.    There are only 0.794% of wage earners who get more than $250,000 per year and only 1.266% of American salaries are over $200,000.

 

ave median wage

 

David Cay Johnston, the well known tax journalist, found some scary wage data.

Every 34th wage earner in America in 2008 went all of 2009 without earning a single dollar, new data from the Social Security Administration show. Total wages, median wages, and average wages all declined, but at the very top, salaries grew more than fivefold.

The below graph shows the average wage per bracket and the percentage of wage earners in that bracket.

 

average wage worker

 

The above graph is from this data, wage statistics for 2009. I asked Mr. Johnston for the data he used and he sent me this link. Interesting how this level of breakdown is only available from the social security administration, and not easy to find at that!

Did you know over 16% of Americans didn't even make $5000 dollars last year and in fact this group averaged $2016 for an entire year?

Here is the latest quarterly data on wage and salary accruals, from the Q3 2010 GDP release. But this aggregate data does not show the wage breakdown, so as Mr. Johnston notes, the fact most of America is poor goes right by the press and bloggers.

 

Average wages

 

Below is a graph of the average wage index over time, not adjusted for inflation. Notice it's also misleading because it averages in those uber-rich salaries. Still, it's down 0.97% for the year and $40,934.93 is your average yearly salary in America. We're Poor in other words.

 

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The story the numbers tell is one of a strengthening economic base with income growing fastest at the bottom until, in 1981, we made an abrupt change in tax and economic policy. Since then the base has fared poorly while huge economic gains piled up at the very top, along with much lower tax burdens.

What is a median? That is where 50% of the total workers earn less than that number and 50% earn more. The median is different from an average, which just sums up all of the wages earned and divides by the total. But that total includes the uber-rich, which skews the average wage way, way up! Since the United States has high income inequality, it's important to look at the median. What this says is 50% of Americans are living on $26,261 or less. That's poor people! That's less than $505 a week before taxes!

 

workers per wage

 

Below is the cumulative average. Notice the 50% line, it's $26,261!   90% of all Americans earn less than $80,000 per year, 99% earn less than $200,000.  Think about a house payment for a $200,000 home, medical bills, retirement and higher education.   I'd say the middle class isn't being destroyed, it's already been destroyed from this data.

 

cumwages.jpg

 

What about the uber-rich? A very scary fact according to Johnston:

The number of Americans making $50 million or more, the top income category in the data, fell from 131 in 2008 to 74 last year. But that’s only part of the story.

The average wage in this top category increased from $91.2 million in 2008 to an astonishing $518.8 million in 2009. That’s nearly $10 million in weekly pay!

So, 74 people had a 500% salary increase during 2009. Right. Bottom line America is poor and most statistics don't show that. Johnston also notes this all started happening with the Reagan tax cuts, proof positive supply side economics is trickle upon the middle class and you know what kind of trickle we're talkin' about.

In this era, the incomes of the vast majority have barely grown while incomes at the top have soared. Reaganism has trimmed the base of the income ladder while placing a much heavier weight on the top.

Here is Johnston's article which has more alarm bells statistics.

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Comments

Poorer still

Because both parties don't do anything. Right now they are railing on offshore outsourcing, but they only got to it right before recess. Hire America and Buy American, should have been strictly enforced in the stimulus.

Btw, we've got some serious B.S. economics papers out there which I hope to get to, claiming "outsourcing is good for America". I'm still working on them, full of flaws, tricks, to make their conclusion match their "data", but that's another thing, one must read everything, and go back to the source with a critical eye.

Thank David Cay Johnston for this one, thank god he wrote about it.

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graphs

There was a request to make the graphs show better the lower wage distributions. The problem is I really need a non-linear scaling on the X-axis. I can offer up another graph to just say $100k, but the problem there is it doesn't show how most of America is stuck way in the bottom wage rungs where there are only a few uber-rich which distort so badly the average wage by over $14,0000 a year. So, I left the graphs to show that.

Let me know if anyone wants a graph going up only to say $100k or $150k or whatever.

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green shoots & coiled springs

Last year the metaphor for the "improving economy" was "green shoots".
I guess the "green shoots" didn't bloom so Bonddad has coined a new one "coiled springs".
Better was the old Alfred E. Newman saying "What me worry" or the depression era "Chicken in every pot"
Hopefully, the "shoots" will bloom and the "springs uncoil" before too many more millions lose there jobs and homes.

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from where?

The issues with small businesses are real and it's true Banksters are not lending to small business. But where is the great growth going to come from without some major policy changes? Jesus, why is it someone can be so wrong so often and still even read? I mean come on, a business cycle is not the real economy and so what, a private "think tank" with some VERY questionable "research" being "right" on a business cycle... so what? Look at this income distribution, look at the #'s of jobs offshore outsourced, the trade deficit, the fact that demand is the economy is almost zero...

where is this magic growth going to spring from? New bailiffs to kick people out of their houses?

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