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Independientemente del año, la remuneración promedio de un asalariado norteamericano, en dólares constantes, nunca sobrepasó el nivel alcanzado en...... ¡1978!

You just gotta' love Spanish exclamation points! For those of you who don't read Spanish, I read the above quote in today's Clarin, a well-known local newspaper in Argentina. They have had other stories about the American economy this week, but today's article, The Gap Widens Between Rich and Poor in the US, called for a diary. Here is what that quote actually means:

Regardless of the year, the average salary of an American employee, in constant dollars, never surpassed the level reached in ......1978!

Basically, folks, we're making 1970's salaries and the rest of the world is noticing. Today's article originated with Le Monde and the New York Times Syndicate. I am sure that Argentines won't be the only ones reading this news today.

Why does it matter? Why should other nations be concerned about the earning potential of the average American? Perhaps because many of these countries have been using us as a model. We are quickly proving that a Democracy run on the Capitalist model may not be sustainable in the long run.

Those of us in progressive circles have been discussing this issue for a long time. We understand that our economic prosperity is also tied to climate change and to our unsustainable lifestyles. Many people fear that as countries like China and India gain economic clout and their huge populations enter the middle class, we will no longer have sufficient resources to supply goods to all of those middle class families.

But what is a nation to do? Many countries thought that by following the US model, they were creating an economy that could support their citizens while providing room for growth. After all, a country whose economy cannot grow is deemed a failure in the broader scheme of things.

What the US is beginning prove is that growth cannot be sustained forever. Our current double dip recession is proof of that. I would imagine that what scares many world citizens, though, isn't that the US model is failing - it's that the US model is proof that the status quo of many other nations, like Argentina, where the gap between rich and poor is huge and there are few pathways to leave poverty and enter the middle class, will remain. What's worse in the United States is that we are also demonstrating that it is easier to leave the middle class and become poor. The article in Clarin quotes are own Census Bureau Report released earlier this week:

El ingreso promedio por hogar está en Estados Unidos en su nivel más bajo en quince años. La gran pobreza explota. El ingreso anual de un hogar promedio, en dólares, bajó a partir de ahora por debajo del nivel que tenía en Estados Unidos hace quince años. Esto es lo que se desprende del informe titulado “Ingresos, pobreza y cobertura de salud en los EE.UU en 2010”, publicado el martes por la Oficina de Censo.
The median household income in the United States is at its lowest level in fifteen years. Extreme poverty explodes. The annual income of an average household in dollars recently fell below its lowest level in the United States fifteen years ago. This is stated in the report titled "Income, Poverty and Health Coverage in the U.S. in 2010," released Tuesday by the Census Bureau.

As world citizens, we might rejoice and think that our failure could be a warning knell that lets other nations know they are on the wrong track. But I have my doubts. Corporations run more than just the United States and few nations know how to measure their gross national product in ways other than measuring the market value of final goods and services. According to Wikipedia, GDP is common indicator of measuring a countries standard of living as well. We just don't know any other way to measure success. Or do we?

As we in the US are struggling with our own economic model and demanding changes from our government, perhaps it is also time for us to start demanding changes in how we measure our economic success. This won't necessarily create jobs, but it would force the government to stop making economic decisions based on what is best for the market and started making decision based on what is best for the population of the country.

There are many different methods to chose from and all of them remove corporations as the center of attention though they don't ignore economic growth all together. They place it in balance with other items:

  • Human development index (HDI)– up until 2009 report HDI used GDP as a part of its calculation and then factors in indicators of life expectancy and education levels. In 2010 the GDP component has been replaced with GNI.
  • Genuine progress indicator (GPI) or Index of Sustainable Economic Welfare (ISEW)
  • The GPI and the ISEW attempt to address many of the above criticisms by taking the same raw information supplied for GDP and then adjust for income distribution, add for the value of household and volunteer work, and subtract for crime and pollution.
  • Gross national happiness (GNH) – GNH measures quality of life or social progress in more holistic and psychological terms than GDP.
  • European Quality of Life Survey – The survey, first published in 2005, assessed quality of life across European countries through a series of questions on overall subjective life satisfaction, satisfaction with different aspects of life, and sets of questions used to calculate deficits of time, loving, being and having.[25]
  • Gross national happiness – The Centre for Bhutanese Studies in Bhutan is working on a complex set of subjective and objective indicators to measure 'national happiness' in various domains (living standards, health, education, eco-system diversity and resilience, cultural vitality and diversity, time use and balance, good governance, community vitality and psychological well-being). This set of indicators would be used to assess progress towards gross national happiness, which they have already identified as being the nation's priority, above GDP.
  • Happy Planet Index – The happy planet index (HPI) is an index of human well-being and environmental impact, introduced by the New Economics Foundation (NEF) in 2006. It measures the environmental efficiency with which human well-being is achieved within a given country or group. Human well-being is defined in terms of subjective life satisfaction and life expectancy while environmental impact is defined by the Ecological Footprint.
  • OECD Better Lives Dashboard - The better lives compendium of indicators produced in 2011 reflects some 10 years by the organisation to develop a wider of set of indicators more closed attuned to the measurement of wellbeing or welfare outcomes. There is felt to be considerable convergence (in 2011) in high income countries about the kinds of dimensions that should be included in such multi-dimensional approaches to welfare measurement - see for instance the capabilities measurement research project capabilities approach.

I have to admit that of all these models, the one that resonates with me the most is the Gross National Happiness or GNH index. Here in the US, there is a movement to inform more people of this index and to remind folks that in our own Constitution we are guaranteed three rights - Life, Liberty, and the Pursuit of Happiness. We have a Constitutional Mandate to offer Congress - they should measure the very thing that we pursue, Happiness. The Seattle City Council has already adopted the Happiness Initiative.

This is one of the joys about living in a foreign country. I can read an article about the United States in a foreign language, start thinking about connections between our own nation and others in the world, investigate a little on the internet, and find people who are already talking about solutions to the problems I am thinking about. One of the sorrows about living in a foreign country is that I have no recourse for action in the United States itself; I have no place I call home where I can lobby local politicians in person to begin considering the kind of changes that are happening in places like Seattle. But you can. Those of you who live in the US can take this idea to your local city councils, to your state representatives, even to your US Representatives, and have a conversation with them. You can plant the next seed.

Originally posted to A Progressive Military Wife on Sat Sep 17, 2011 at 10:47 AM PDT.

Also republished by Global Expats, ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement, LatinoKos, America Latina, Daily Kos Foreign Language Edition Group Newsletter, EcoJustice, and Community Spotlight.

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Comment Preferences

  •  Argentina should know! (3+ / 0-)
    Recommended by:
    angelajean, basquebob, guinea

    Argentine workers have never surpassed their 1950 salaries.

    The Rent Is Too Damn High Party feels that if you want to marry a shoe, I'll marry you. --Jimmy McMillan

    by Rich in PA on Sat Sep 17, 2011 at 10:58:22 AM PDT

  •  Good analysis, but you should be aware (5+ / 0-)

    your link to the Clarin article "The Gap Widens Between Rich and Poor in the US" actually links back to your diary, so you're referencing yourself.  A small oversight, but one you might want to fix.

    "I speak the truth, not as much as I would, but as much as I dare, and I dare a little the more, as I grow older." --Montaigne

    by DrLori on Sat Sep 17, 2011 at 11:10:15 AM PDT

  •  Tipped & recced. Excellent analysis & view (6+ / 0-)

    from outside the U.S. popped bubble.

    Meteor Blades seems to do an outstanding job of community moderation despite the abject failure to be perfect.

    by catilinus on Sat Sep 17, 2011 at 11:19:03 AM PDT

  •  At times like these (5+ / 0-)

    ...American's outside the US will be able to help more than from the inside. Just keep doing what you are doing.

    Repulished to the Foreign Language Edition Group Newsletter.

  •  The average Argentina salary is $7000 per working (2+ / 0-)
    Recommended by:
    alizard, Boreal Ecologist

    person.  

    I wouldn't be laughing yet if I were Argentinian.  Argentinians today are making about as much as they did in the.... 1930s.

    I've come to the conclusion that most countries are all the same, full of ignorance of other countries and false pride.  

    •  And before someone mentions cost of living (2+ / 0-)
      Recommended by:
      ladybug53, angelajean

      The cost of a detached single family home in Argentina is only about 25% cheaper than the US median for single family homes.  And you have to put in 20% down, and there's no 30 year fixed mortgage in Argentina.

      •  I don't believe the Argentines are laughing at all (4+ / 0-)

        Just the opposite. I think those who are paying attention are very concerned. Too much wealth in the world is tied to American interests.

        I think the rich in Argentina are clueless to the problems both in the US and here in their country. The biggest problem is that the richest people really have very little idea about the poverty of their own citizens. Most people with money believe that the poor are all immigrants, and/or work illegally, and/or would rather take government assistance than work at all.

        Hmmm... does this sound like anyone you know in the United States? Just because they may be worse of than we are doesn't mean we aren't headed in the same direction.

        I would love to know where you get your facts about the Argentines making what they did in 1930... do you happen to have a link?

        •  Consider the source (0+ / 0-)

          I realize that quoting this site will get me Donuted up, but it looks like this page has been well-researched.

          Further, comparison
          between hourly wages in 1911 and 1914 for Buenos Aires, Paris, and
          Marseilles in seven different job categories shows that wages in Buenos
          Aires were 80 percent higher than those of Marseilles in all
          categories, and 25 percent higher than in Paris in most categories.
          Until World War I, although per capita income in the United States
          was much higher than in Argentina, the average wage of an immigrant
          to Buenos Aires was similar to that of an immigrant to New York.

          Make of it what you will.

  •  I for one made more in the 1980's (6+ / 0-)

    than I do now (I had my first kid in 1978 and did not go back to working until 1981...so can't really compare to that year).

    My house then was about 1/4 the cost of my present home, and my property taxes now are about 8 times what they were then.

    In early 80's I was doing great.  Today I am flat broke.   And retirement (probably won't get to do that) is only a few years away.  

    I fall down, I get up, I keep dancing.

    by DamselleFly on Sat Sep 17, 2011 at 04:18:03 PM PDT

    •  That floors me... (0+ / 0-)

      I can't believe you are paying property taxes at 8 times the rate you did in the late 1970's.

      I know you are probably not living in CA... or at least not in the same property that you owned at that time. A lot of their budget problems can be tied to Prop 13 which froze property rates unless a property changes hands. Thanks to Ronald Reagan for that one.

      •  This is true for most US locales now (2+ / 0-)
        Recommended by:
        angelajean, Bluefin

        As federal dollars decline, local entities are more and more turning to property taxes to make up the shortfall. At one time, property taxes were primarily designated for schools, but now they have to support the general services in most cities and counties.

        In my state, there is a constitutional amendment going back to the Great Depression that forbids reappraising or raising property taxes more frequently than every five years unless the property is sold. They have developed a lot of ways to get around that, including "pre-appraisal" (appraising in a year when property values are high, then applying that when they can, rather than using the value in the year the tax is changed).

        Note that before 1998, property was only reappraised when it was sold, now there is a regular schedule and all property is reappraised (1/5 of all non-commercial property is reappraised every year).  For example, property values here (like in most places) expanded during the housing bubble and collapsed in 2009. My "regularly scheduled" reappraisal was in 2010 and the value of my property dropped about 15%, but my taxes went up about $1500 thanks to "pre-appraisal". (My salary didn't, of course, but that isn't much of a surprise.) There is an appeal process, but it takes about 4 years with the backlog, and in the meantime I still have to pay the taxes. (And if the past is anything to go on, even if I "win" reappraisal, I won't get that overpayment back.}

        The reason they were the good old days: we were neither good nor old.

        by carolita on Sun Sep 18, 2011 at 10:49:05 AM PDT

        [ Parent ]

  •  Economics, as generally practiced, (3+ / 0-)
    Recommended by:
    angelajean, alizard, Bluefin

    like accounting is limited to economic activity that can easily be measured in currency.  DIY is left out totally and the underground economy is only partially captured.

    When life was good for my blue collar grandparents in the 1920s, it came in part from my grandfather and his relatives building his large brick house (land and materials paid for with cash), the fruit trees and vegetable garden in the back yard, and the wine and beer he made in his basement.    

    •  That is the kind of life we often like to envision (2+ / 0-)
      Recommended by:
      Marie, Sue B

      for ourselves but it is increasingly unrealistic for the majority of people. We don't have enough land for everyone to have their 1/2 acre and grow what they need. We need to find ways to improve our living circumstances with smaller amounts of land or even land that is communally owned and shared. Otherwise, I just don't see how we, as a nation, can do it. As individuals, sure, we can survive. But to find a way for the majority to have a decent life, to be able to pursue happiness, is getting increasingly more difficult.

      •  Was focused more on the DIY (1+ / 0-)
        Recommended by:
        angelajean

        part and not a 1/2 acre to grow one's own food.  

        The economy, as measure by GDP, was smaller when more of us cooked our own meals, sewed some of our own clothes, etc.  We freak out about China's GDP growth failing to recognize how much of that is merely monetizing  DIY.  Many of those DIY skills are lost in the process.      

        •  That I agree with 100% (2+ / 0-)
          Recommended by:
          Sue B, Marie

          We do need more DIY and/or folks more willing to pay for people to do some of those things for them. For example, in Argentina, people don't throw things away... they repair them or have them repaired. That provides jobs for other locals and keeps money flowing in the local economy but doesn't require a lot of new resources. We need to start thinking that way in the US. We waste way too much.

          When we lived in Texas, I was amazed at how many Goodwill Stores exist. People buy new things ever year and where just willing to donate year old items to the Goodwill. Here in Buenos Aires, there is a single Salvation Army in a city that is the size of a small state. There just isn't much of a market for used items because folks use things until they fall apart or break for good.

          •  Or simply reconize that the more DIY (1+ / 0-)
            Recommended by:
            angelajean

            squeezed out of an economy makes it more fragile.

            Am reminded of the time my trusty -- and heavily beaten up in a house remodel - vacuum cleaner died.  I felt fortunate to have found repair store and for eighty dollars (iirc) got a new motor and hose.   I proudly shared this with my very frugal mother.  She looked at me as if I were crazy and said, "You could have bought a new one for a hundred."  Somehow she had moved on from the world in which she raised me and I hadn't.  (Ecologically, I was still right.)

  •  Red wine, skiing and soccer! (0+ / 0-)

    Pretty much my 3 favorite things in the entire world and Argentina does all 3 very well.  If only Messi would start playing well for the Albiceleste.

    But there's a very large Brazilian community here in Utah.

    If people are willing to leave a place whose economy is stronger than Argentina's to move to a freezing cold place with goofy liquor laws and a futebol team that would be laughed out of the Brazilian or Argentinean league; then I have to wonder if we really have it so bad here.

    •  I think you need to take another look at the (1+ / 0-)
      Recommended by:
      bozepravde15

      Argentine economy. The last few years have proven to be good ones for the nation. Inflation is still high but under better control. The industry that Argentina has created for itself means that they are creating more jobs that keep more money in Argentina. I am shocked by all of the items with the tag "Industria Argentina" on them.

      As to people leaving Brazil for the US - many still believe in the American Dream. Do you? And, if you believe in it, do you think the majority of the population can attain the American Dream or only a few?

      •  As I commented to Utahrd, most Brazilians who come (1+ / 0-)
        Recommended by:
        angelajean

        here come both for a vague idea of the American dream, but even more so to make extra money so they can live a better live in Brazil itself. With American wages and Brazilian prices, they can find themselves with a nice house and fancy electronics (flat screen tvs are quite expensive in Brazil as compared to here, though prices are dropping). Any sort of idea that the Brazilians coming here are from the lower classes (the case for many Central Americans and Mexicans) should be dispelled by geography, only the middle classes can afford the flight and the visa. Brazilians here are a lot more similar to Russians and Indians, the immigrants here often have college degrees, but unable to work with their Brazilian qualifications, they take menial jobs or jobs that allow them to fly under the radar. However, unlike Russians and Indians, Brazilians have a very high return rate.

        Mas eu tenho certeza que se eu não morrer, nada nessa vida vai me surpreender.

        by bozepravde15 on Sun Sep 18, 2011 at 05:53:37 PM PDT

        [ Parent ]

    •  Myself, I'm half Brazilian, though my dad never (2+ / 0-)
      Recommended by:
      Utahrd, angelajean

      immigrated here (was raised by single American mother) I can tell you that the Brazilians here in the Northeast are almost entirely from the Brazilian middle class, they come here to make more money than they could with Brazil's still relatively low wages, even for professionals. Yet in the past 5 years, I'd guess about 1/3rd of the Brazilians here have gone home, either satisfied with the new house they built with the money they sent back, or put off by the small chances for steady work. Across the Boston area, Brazilian small businesses have gone out of business in droves because they no longer have enough customers (A pizza place I loved that was run by Brazilians just recently closed within the past month). A certain segment of Brazilians will stay in the US (the ones brought here young who are far more American than Brazilian, the ones who made it good here and the ones who marry Americans) but more and more are going home. I personally know over 50 Brazilians who have gone back within the past year alone. Even Japanese Brazilians are leaving Japan (understandable, given the circumstances there). A very VERY large proportion of Brazilians abroad (not including the ones in Japan) are from the states of Minas Gerais and Paraná, relatively wealthy states with decent sized middle classes. Comparatively, the state of São Paulo (where my father's origins are, it's basically Brazil's New York) has contributed very few people to the diaspora, because it is the center of the economic boom. (I have only met one person here from SP, and they were from the Southern part of the state)
      http://news.bbc.co.uk/...
      http://www.globalpost.com/...
      http://articles.latimes.com/...

      Mas eu tenho certeza que se eu não morrer, nada nessa vida vai me surpreender.

      by bozepravde15 on Sun Sep 18, 2011 at 05:50:02 PM PDT

      [ Parent ]

  •  I believe it went up during Clinton in late (1+ / 0-)
    Recommended by:
    angelajean

    1990's but, other than that, the rich have gotten richer....and the middle class stagnated.

  •  Sorry I missed this yesterday (1+ / 0-)
    Recommended by:
    angelajean

    am now following you to make sure I don't miss anything in the future.

    Excellent analysis and perspective.

    "We are normal and we want our freedom" - Bonzos

    by matching mole on Sun Sep 18, 2011 at 01:22:35 PM PDT

    •  Thanks matching mole! (0+ / 0-)

      I don't publish enough about what I read in the local paper. I need to do it more often, especially when they write about the US. I have a diary I had started earlier this week in my drafts about a similar article but written by a local writer instead of LeMonde and NYTimes Syndicate. I'll see if I can get it finished!

  •  I am also certain that this recession (1+ / 0-)
    Recommended by:
    angelajean

    has drained families in new ways.

    I am, for instance, the current sole breadwinner of an adult child and grandchild.  My daughter was going to school; ready to start her junior year in the teaching program of the local university.  Budget cuts (one month before the start of the new year) will make it so that it will not begin till next year.  Her job involved working at the college and it was cut as well.  While she had never applied for any other benefits she and her daughter used food assistance and because she is out of a job that was cut (they will only pay for my granddaughter's food because she has no job - go figure)

    On top of that I have another family member who is all but homeless - he has worked for nearly forty years as a builder and there is just no building going on around here. The few jobs available go to young men who can be paid less.  His unemployment has run out and he may have a place to move  I keep putting food back in the pantry in case he will need help.

    I am sure that aside from the lack of wages going up there is a strong ripple effect of so much unemployment and families struggling to take care of their members who could once manage easily on their own.  Its hard.  Every penny is inspected and you have to discipline yourself to say no to every expenditure.  

    •  I think what angers me most about all of this (0+ / 0-)

      is hearing that older employees are losing jobs to younger, lesser paid employees. We are pitting ourselves against one another. Something is inherently wrong with that picture.

      In America, we are taught to value the 'bargain.' But I think that we have out-bargained ourselves too many times.

      We don't pay farmers for growing great food and they have resorted to mono-crops and massive pesticide use to make their work pay.

      We don't provide pensions for many of our citizens and then wonder why they need assistance when it comes time to retire.

      We don't provide health insurance because it would be too expensive yet we already spend more money that nations who have single payer programs.

      We are constantly trying to cut and save, cut and save, and we value Walmart over the corner store. We are going to pay for it over and over again.

      I'm sure we could come up with many more examples. It just makes me sick.

  •  Gotta love some of the jingoism in these comments (1+ / 0-)
    Recommended by:
    angelajean

    how can those ARGENTINES talk about bad wages, they hardly make $7,000 a year! As I commented on a previous diary, the main focus is that parts of Latin America (especially the Southern cone) is rapidly improving as far as living statistics go, and even though wages there are less than ideal, they have very good rates in life expectancy, crime (Argentina and Uruguay have the same murder rate as the US, while Chile's is significantly lower) and improving health statistics. Considering how rapidly we are falling, and that we are fast becoming a joke, perhaps it's time to put the jingoism away?

    Mas eu tenho certeza que se eu não morrer, nada nessa vida vai me surpreender.

    by bozepravde15 on Sun Sep 18, 2011 at 05:57:11 PM PDT

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