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While the wealthiest Americans are outpacing many of their global peers, a New York Times analysis shows that across the lower- and middle-income tiers, citizens of other advanced countries have received considerably larger raises over the last three decades.
That is the 2nd paragraph of this important article in today's New York Times whose title I have borrowed for this post.

And as the very next paragraph tells us

After-tax middle-class incomes in Canada — substantially behind in 2000 — now appear to be higher than in the United States. The poor in much of Europe earn more than poor Americans.
The analysis is based on studies of 35 years worth of data.

We tend to look at median income data or mean data.  The gaps in median are closing with other nations, and our mean data is distorted badly by the skewing of increased income towards those at the top of the income pyramid, while many Americans are actually seeing their income shrink.

As one key paragraph notes:

The struggles of the poor in the United States are even starker than those of the middle class. A family at the 20th percentile of the income distribution in this country makes significantly less money than a similar family in Canada, Sweden, Norway, Finland or the Netherlands. Thirty-five years ago, the reverse was true.

The study on which the article is based

counts after-tax cash income from salaries, interest and stock dividends, among other sources, as well as direct government benefits such as tax credits.
 We should of course remember that those at the top of our income pyramid often have a greater percentage of their earnings as after tax cash income -  they are not responsible for payroll taxes on stock income, they have a lower tax rate on capital gains and carried interest, and even much of their salaries are not subject to social security taxes which the vast majority of Americans pay 5.65% on all of the salary whereas for the wealthy it can easily drop below 1% of salary.

We still have the world's highest per capita GDP, but that represents a distortion of what is happening, as the increases in income since the recovery began have increasingly flowed to an ever narrower segment of the American population while other Americans have either seen their incomes stagnant or in too many cases actually shrink in real dollars, this at the same time as the programs of the social safety net that should help cushion hard times are being limited, cut back, or even eliminated.

Pay is rising faster in Canada and several European nations than it is in the US.

The study focuses on three reasons.

The first is that educational attainment is rising more slowly in the US than in the rest of the industrialized world in the last three decades.  Here I will note that time span, and remind readers that our current insane approach to educational policy at a national level begins at the same time as that decline, with the release of A Nation at Risk under the Reagan administration in 1983, continued with Goals 2000 during the administration of the first Bush while Bill Clinton was head of the National Governors Association, through No Child Left Behind, Race to the Top, and now Common Core and the accompanying tests.  That we continue to double down on the kinds of policies that have created the problem is beyond belief except that it serves the agenda of those who want to shift the expenditures of public education in private hands and/or devalue public institutions of all kinds.

I will push fair use a bit to quote the relevant material on the other two:

A second factor is that companies in the United States economy distribute a smaller share of their bounty to the middle class and poor than similar companies elsewhere. Top executives make substantially more money in the United States than in other wealthy countries. The minimum wage is lower. Labor unions are weaker.

And because the total bounty produced by the American economy has not been growing substantially faster here in recent decades than in Canada or Western Europe, most American workers are left receiving meager raises.

As you look at the material in those two paragraphs, consider the following.

We built the American middle class in the period largely in the 1950s, when

- the highest incremental personal tax rates exceeded 90%
- corporate taxes paid a substantial proportion of the total tax revenues of the federal government
- social security tax rates were less than half of what they currently are, and the cap on wages subject to them was at a lower percentage of average wages than is currently the case
- the capital gains tax rate exceeded 30%
- around 1/3 of private sector employment in the US was unionized.

So at a time when our average wages grow more slowly, we have changed tax and employment policies in a fashion which further punishes those not at the top, and we wonder why our economic inequality is growing?

Then consider the following comparisons of increases in median income since 2000

Britain   19.7%
Canada  19.7%
Ireland   16.2%
Netherlands 13.9%
Spain      4.1%
Germany  1.4%
US          0.3%

Meanwhile we unleash the economically powerful to further distort the political process.  This after we have already seen Republicans consistently oppose programs that could make a difference, such as

-  pay equity for women
-  raising minimum wage
-  raising taxes on passive income
-  extending unemployment compensataion
-  stimulating the economy (ARRA)
-  exttending medical coverage  (ACA, Medicaid)

while cutting aspects of the social safety net, such as nutrition assistance, unfortunately too often with weak Democrats joining in.

Things are bad for the middle class.

They are even worse for the poor, even as the number of poor is increasing.

Consider this material from the final two paragraphs:

the poor in the United States have trailed their counterparts in at least a few other countries since the early 1980s. With slow income growth since then, the American poor now clearly trail the poor in several other rich countries. At the 20th percentile — where someone is making less than four-fifths of the population — income in both the Netherlands and Canada was 15 percent higher than income in the United States in 2010.
As we allow the political process to be distorted in a way that increases our economic inequity to ridiculous levels, we should remain aware that we are at increasing risk.

Given how much of the wealth and power comes from energy sources and those backing them, the only question may be which happens first, that the environment is permanently destroyed by anthroprogenic climate change, or America becomes so plutocratic/oligarchic that we lose the world's longest existing liberal democratic republic.

In either case, violence and disruption will not be far behind.

The question is whether we, the American people, are willing to take the actions necessary to prevent this from happening.

I wonder.

By contrast, Americans at the 95th percentile of the distribution — with $58,600 in after-tax per capita income, not including capital gains — still make 20 percent more than their counterparts in Canada, 26 percent more than those in Britain and 50 percent more than those in the Netherlands. For these well-off families, the United States still has easily the world’s most prosperous major economy.

Originally posted to teacherken on Wed Apr 23, 2014 at 05:53 AM PDT.

Also republished by Pushing back at the Grand Bargain and ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement.

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Comment Preferences

  •  Tip Jar (33+ / 0-)

    "Don't ask what the world needs. Ask what makes you come alive and go do it, because what the world needs is more people who have come alive." - Howard Thurman

    by teacherken on Wed Apr 23, 2014 at 05:53:32 AM PDT

  •  What will we do with all our giant foam (9+ / 0-)

    "We're #1!" fingers?

    We have only been #1 in proclaiming #1ness for a long time.

    In about 20 years or so, this news may filter down to all the Fox viewers and all the Tea Partyists. We will all be swimming out to the cruise ships by then to sell our cheap and colorful crafts.

    “Human kindness has never weakened the stamina or softened the fiber of a free people. A nation does not have to be cruel to be tough.” FDR

    by Phoebe Loosinhouse on Wed Apr 23, 2014 at 06:09:53 AM PDT

    •  The Fox viewers will be offered (7+ / 0-)

      scapegoats like single moms, welfare queens, illegal immigrants, etc to explain all of the above.

      The article and teacherken's laying out of how a strong middle class was built in the past offers two blueprints - how to destroy a middle class and economic opportunity in a generation or two, and how to build a strong middle class and sustainable economic growth.

      The challenge for Democrats is to "bumper sticker" this in a way that resonates and makes it clear - we know how to make this work for everyone, and we've seen in the last few decades the policies that ensure this economy only works for a few at the top.

      And then there is the laundry list of the policy changes that will help us build and support the middle class and economic opportunity for all again.

      And we can't just say it once, or only every two or four years. It has to be the central theme of the party and its message. Everything we say and do has to be put in that framework so it sinks in and resonates with people.

      Blue is blue and must be that but yellow is none the worse for it - Carlisle Wheeling

      by kenwards on Wed Apr 23, 2014 at 06:40:47 AM PDT

      [ Parent ]

    •  Thanks for diary ken :-) (3+ / 0-)
      Recommended by:
      tardis10, allie4fairness, alypse1

      Expats like my self know about this is issue. :-)

      You ran into a hardcore progressive whos just another working stiff with an MBA degree & vociferous labor union supporter

      by Democrats Ramshield on Wed Apr 23, 2014 at 07:00:01 AM PDT

      [ Parent ]

  •  It's a race to the bottom (9+ / 0-)

    and we're winning!

    If the pilot's good, see, I mean if he's reeeally sharp, he can barrel that baby in so low... oh you oughta see it sometime. It's a sight. A big plane like a '52... varrrooom! Its jet exhaust... frying chickens in the barnyard!

    by Major Kong on Wed Apr 23, 2014 at 06:25:30 AM PDT

    •  Well yes and no (0+ / 0-)

      typical of the NYTs, the article is essentially indecipherable.

      For example, despite that headline they have a subheading (and accompanying graphic) showing: The United States’ once-strong lead in middle class incomes is shrinking.

      IOW, we're still ahead, just less ahead than we used to be.

      •  No. (6+ / 0-)
        The findings are striking because the most commonly cited economic statistics — such as per capita gross domestic product — continue to show that the United States has maintained its lead as the world’s richest large country. But those numbers are averages, which do not capture the distribution of income. With a big share of recent income gains in this country flowing to a relatively small slice of high-earning households, most Americans are not keeping pace with their counterparts around the world.
        bold emphasis mine
        •  Well, the graphic they present shows otherwise (0+ / 0-)

          did you see it?

          Like I said, this type of undecipherable mishmash is increasingly characteristic of the NYTs slide into irrelevance.

          •  The blockquote is from directly below the graph. (3+ / 0-)
            Recommended by:
            cybrestrike, unfangus, Lefty Coaster

            I would hardly characterize it as undecipherable. You could suggest that the graphic is unnecessary or misleading but it's only undecipherable if you don't take the time to simply read.

            •  It is undecipherable insofar as the graphic (0+ / 0-)

              shows completely the opposite as what the text says.

              So you say I don't take the time to simply read.

              I could easily turn that around and say that you don't take the time to simply look at the actual data.

              •  What data? (1+ / 0-)
                Recommended by:
                cybrestrike

                The information I need is in the blockquote. I don't need to examine every goddamned graph to comprehend what the article is saying.

                btw, I also did say this

                You could suggest that the graphic is unnecessary or misleading
                but your response is to take it personally and make it about you. Weird.
                •  No, the graphic shows the actual data (0+ / 0-)

                  IT is what is key, not some half-assed interpretation in the text that for all we know, Judith Miller wrote.

                  •  The graph is an average. (1+ / 0-)
                    Recommended by:
                    poco

                    And after reading the article it becomes clear that because the rich are gaining so much at the expense of everyone else it skews the data. That is the real take-away from the graph and the article. It's called "context" and more often than not it's important when it comes to understanding the information being presented.

                    Again, you could suggest the graph is unnecessary or misleading because people may simply look at the graph without reading the context in which it is being presented. It could give someone a false impression which is what the paragraph below informs us.

  •  It's still a great Country (5+ / 0-)

    to be rich in.

    This is the real "ownership society" . . . wherein if you're not on top those who are own you.  You scorned Bush when he first said it, and then you turned around and voted for it . . .

    Fake Left, Drive Right . . . not my idea of a Democrat . . .

    by Deward Hastings on Wed Apr 23, 2014 at 06:27:03 AM PDT

  •  More change we can believe in! n/t (2+ / 0-)
    Recommended by:
    allie4fairness, cybrestrike

    Dogs from the street can have all the desirable qualities that one could want from pet dogs. Most adopted stray dogs are usually humble and exceptionally faithful to their owners as if they are grateful for this kindness. -- H.M. Bhumibol Adulyadej

    by corvo on Wed Apr 23, 2014 at 06:34:57 AM PDT

    •  The data is from 2010. (0+ / 0-)

      President Obama had been in office only a year at that point, and we were still digging out from the Bush recession and facing the worst economic crisis since the Great Depression.

      Nice try, though.

      How about I believe in the unlucky ones?

      by BenderRodriguez on Wed Apr 23, 2014 at 10:33:48 AM PDT

      [ Parent ]

      •  yes, because the current Administration (0+ / 0-)

        had thoroughly rejected the economic policies of the Reagan-through-Dubya Era, and proposed a drastic change in direction . . . right?

        That's what chained CPI is about . . . right?  Or those toothless corporate-based "opportunity" projects he's floating to a handful of states?

        And before you start the usual litany of "Can't do anything because of Republican intransigence": Yeah, maybe he can't do anything. But I can't give him points for trying if he doesn't try.  

        Dogs from the street can have all the desirable qualities that one could want from pet dogs. Most adopted stray dogs are usually humble and exceptionally faithful to their owners as if they are grateful for this kindness. -- H.M. Bhumibol Adulyadej

        by corvo on Wed Apr 23, 2014 at 11:32:09 AM PDT

        [ Parent ]

        •  Chained CPI? Really? (0+ / 0-)

          You mean that thing that's never going to happen? You have a better chance of a Martian invasion occurring.

          Of course Obama has "proposed a drastic change in direction." He didn't just propose it, though. He signed it into law: The Affordable Care Act.

          This one's from the White House website, so I'm sure you'll dismiss it:
          Economic benefits of ACA

          This one's from the NYT's Economix blog:
          From the NYT

          How about I believe in the unlucky ones?

          by BenderRodriguez on Wed Apr 23, 2014 at 11:59:12 AM PDT

          [ Parent ]

          •  Chained CPI? (1+ / 0-)
            Recommended by:
            RabbleON

            You mean that thing that Our President proposed?

            Oh, and yes, he did sign the Heritage Foundation's act into law.  A shame he didn't start negotiations from something resembling a Democratic Party position.

            Dogs from the street can have all the desirable qualities that one could want from pet dogs. Most adopted stray dogs are usually humble and exceptionally faithful to their owners as if they are grateful for this kindness. -- H.M. Bhumibol Adulyadej

            by corvo on Wed Apr 23, 2014 at 12:01:26 PM PDT

            [ Parent ]

  •  Yay for the tarsands ! (?) (0+ / 0-)
    After-tax middle-class incomes in Canada — substantially behind in 2000 — now appear to be higher than in the United States.
    •  I see that critical thinking hasn't improved, (4+ / 0-)


      But expected!!

      And 'tarsands' benefit what and how many Canadian's!?

      "If military action is worth our troops' blood, it should be worth our treasure, too; not just in the abstract, but in the form of a specific ante by every American." -Andrew Rosenthal 10 Feb. 2013

      by jimstaro on Wed Apr 23, 2014 at 07:16:24 AM PDT

      [ Parent ]

      •  They broadly benefit most Canadians (0+ / 0-)

        insofar as Alberta has BY FAR the largest per capita income and federal government policy distributes income from "rich" provinces (which these days pretty much is limited to those with oil extraction) to the rest of the provinces.

        In other ways, the tarsands provide a safety valve for people in poorer provinces (e.g., the maritime provinces that don't have oil) to gain employment.

        Plus infrastructure manufacturing spills over to some degree to the declining industrial base of Ontario, keeping that province afloat.

        •  Really?!!! (2+ / 0-)
          Recommended by:
          unfangus, ontario


          Like here in the states, clown, the damage being done is the burden of the masses, i.e. infrastructure costs etc., not the few benefiting, and profiting, from!!!

          But alas, that FOX speak you seem to relish, and for a looooong time, wiped out any, not told to, thought process!!

          "If military action is worth our troops' blood, it should be worth our treasure, too; not just in the abstract, but in the form of a specific ante by every American." -Andrew Rosenthal 10 Feb. 2013

          by jimstaro on Wed Apr 23, 2014 at 07:28:23 AM PDT

          [ Parent ]

    •  Much more then (0+ / 0-)


      Infrastructure, also health issues thus costs from as well as environmental issues and cost from including cleanup after the messes, and more!!

      That weighs on economic growth and is much much worse, now, here in the states!!

      Or don't you pay attention?! My bad, what a silly question!!

      "If military action is worth our troops' blood, it should be worth our treasure, too; not just in the abstract, but in the form of a specific ante by every American." -Andrew Rosenthal 10 Feb. 2013

      by jimstaro on Wed Apr 23, 2014 at 09:06:40 AM PDT

      [ Parent ]

      •  After what is it, 3 hours or so, you (0+ / 0-)

        have yet to offer an alternative explanation for the relative vigor of the Canadian economy over the past decade.

        A decade, btw, in which Celine Dion permanently forsook the country, nascent efforts at developing technology (e.g., Northern Telecom and Blackberry crashed and burned), and so on  . ..  Manufacturing in Ontario left to go to low wage US sites, etc, etc.

        Leaving the mainstays - namely resource extraction - to propel the Canadian economy.  Of which the tarsands are the 900 pound gorilla.  

        Heck, I think they're as big of a group of fuckwads as anybody for taking this route, but I really don't get where you are coming from by denying this totally undeniable reality.

  •  And not just as care givers!! (3+ / 0-)
    Recommended by:
    aznavy, allie4fairness, cybrestrike


    Now, even boomers are moving back in with mom and dad

    The fate of what was forecast would happen, reaganomic, conservatism, capitalism, taking down what had been envied by the rest of the planet!!

    "If military action is worth our troops' blood, it should be worth our treasure, too; not just in the abstract, but in the form of a specific ante by every American." -Andrew Rosenthal 10 Feb. 2013

    by jimstaro on Wed Apr 23, 2014 at 07:07:43 AM PDT

  •  I really believe we need to become inclusinve.. (2+ / 0-)
    Recommended by:
    allie4fairness, cybrestrike

    and try and create a movement to get the money out of politics so we can begin to solve our issues. Until we fix the flaw at the core we are just fighting minor battles anything won can be lost soon after.

    The only thing that will make our bought and paid for congress do our bidding is a large movement people all across the country and to Washington putting a little fear of the masses in them.

    I thinks its our only chance to prevent a situation where things get so bad violence erupts instead of protests.

    Join the DeRevolution: We are not trying to take the country, we are trying to take the country back. Get the money out of politics with public financed campaigns so 'Of the People, By the People and For the People' rings true again.

    by fToRrEeEsSt on Wed Apr 23, 2014 at 07:31:11 AM PDT

    •  Problem with that... (1+ / 0-)
      Recommended by:
      ontario

      ...is that the fear of the masses was put into those politicians and oligarchs. It was called Occupy Wall Street. And it was brutally subjugated by the powers-that-be.

      The Grand Bargain must be stopped at all costs to protect the 99%.

      by cybrestrike on Wed Apr 23, 2014 at 07:59:39 AM PDT

      [ Parent ]

      •  No Occupy lacked focus and had a poorly defined... (1+ / 0-)
        Recommended by:
        ontario

        problem, it was good for creating awareness but had no chance of getting further. thanks to Occupy we have this discussion in the mainstream instead of the fringe, but the next movement must have a real solution to the actual problem.

        Join the DeRevolution: We are not trying to take the country, we are trying to take the country back. Get the money out of politics with public financed campaigns so 'Of the People, By the People and For the People' rings true again.

        by fToRrEeEsSt on Wed Apr 23, 2014 at 08:02:14 AM PDT

        [ Parent ]

  •  I understood it to be (0+ / 0-)

    that the middle class in other countries have gained on the US - while the US middle class is still OK - it has not made any gains in the last 14 years.  The US middle class is still ahead of most countries - (other than Canada).

    It's not tax policy - it's globalization - when you're at the top - and you want others to "catch up" - those with the most to loose were the middle class - the rich weren't about to take it on the chin.

    NAFTA and all the free trade agreements signed by Republicans and Democrats are more to blame than any tax or domestic policy.

    The care of human life and happiness, and not their destruction, is the first and only legitimate object of good government. - Thomas Jefferson

    by ctexrep on Wed Apr 23, 2014 at 07:33:35 AM PDT

    •  Is it important that the US be first in everything (0+ / 0-)

      , and the rest of the countries be second or worse on every measure, in everything? Just asking?

      "...stories of past courage can define that ingredient..... But they cannot supply courage itself. For this each man must look into his own soul." JFK Profiles in Courage "

      by ontario on Wed Apr 23, 2014 at 09:08:45 AM PDT

      [ Parent ]

  •  Great diary (0+ / 0-)

    Thanks Ken

    "If Wall Street paid a tax on every “game” they run, we would get enough revenue to run the government on." ~ Will Rogers

    by Lefty Coaster on Wed Apr 23, 2014 at 10:35:03 AM PDT

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