Pardon me, but I think the fact that the total incomes have not risen for five years and that incomes actually fell for four straight years -- the first time that has happened since World War II -- is pretty signifcant.
The news came in the New York Times this morning (emphasis mine): "Americans earned a smaller average income in 2005 than in 2000, the fifth consecutive year that they had to make ends meet with less money than at the peak of the last economic expansion, new government data shows."
The story goes on ...
While incomes have been on the rise since 2002, the average income in 2005 was $55,238, still nearly 1 percent less than the $55,714 in 2000, after adjusting for inflation, analysis of new tax statistics show.
The combined income of all Americans in 2005 was slightly larger than it was in 2000, but because more people were dividing up the national income pie, the average remained smaller. Total adjusted gross income in 2005 was $7.43 trillion, up 3.1 percent from 2000 and 5.8 percent from 2004.
Total income listed on tax returns grew every year after World War II, with a single one-year exception, until 2001, making the five-year period of lower average incomes and four years of lower total incomes a new experience for the majority of Americans born since 1945.
Wow. Income was climbing every year since WWII. Then the Internet bubble. Fortunately, we had the Bush tax cuts to help pull our economy out of the crapper. Right?
Well, at least it worked for millionaires, billionaires and everyone else who doesn't WORK for a living:
The growth in total incomes was concentrated among those making more than $1 million. The number of such taxpayers grew by more than 26 percent, to 303,817 in 2005, from 239,685 in 2000.
These individuals, who constitute less than a quarter of 1 percent of all taxpayers, reaped almost 47 percent of the total income gains in 2005, compared with 2000.
People with incomes of more than a million dollars also received 62 percent of the savings from the reduced tax rates on long-term capital gains and dividends that President Bush signed into law in 2003, according to a separate analysis by Citizens for Tax Justice, a group that points out policies that it says favor the rich.
So how does the White House defend its fiscal performance? Shame? Disgrace? Anger?
Mr. [Tony Fratto, a White House spokesman] said the fact that nearly all of the growth in incomes was among those in the upper reaches of the income ladder and that the majority of investment tax breaks went to those making more than $1 million "is not a very interesting story."
Interesting to the rest of us
This is why working Americans feel angry, anxious and believe the American Dream is slipping away (PDF).
According to Change to Win's latest American Dream survey, this anger is matched by growing distrust of politicians and wealthy corporate interests who most believe have too much power in Washington.
- Workers are deeply negative on the direction of the economy. By over a 2 to 1 margin, they believe the economy is headed in the wrong direction (64% "wrong track" and 26% "right direction"). This negativity is strong across all demographic groups, and mirrors findings from our August survey.
- Workers are feeling left behind in any supposed economic growth. Over four out of five workers (82%) agree (56% strongly) that "No matter what you hear about the economy, working families are falling behind."
- These economic woes underpin workers' pessimism towards reaching the American Dream both today and for their children in the future. Seventy-four percent believe it is becoming harder today to achieve the American Dream, with 16% saying it is about the same and only 7% saying it is becoming easier. This concern extends to the next generation, as 69% believe it will be harder for their children to reach the American Dream.
- Working Americans are angry about the disproportionate power wealthy and corporate interests have over them, and see this as a major barrier to the American Dream. When asked to rate reasons for why the American Dream is becoming more difficult to reach, workers believe that:
- "Corporations have gained too much power in the political system and that has hurt working people" (71% rate 10-8, 53% rate 10)
- "Corporations are too focused on short-term profits rather than investing in their workers and the future" (71% rate 10-8, 47% rate 10)
- "The government gives tax breaks and special favors to the rich while neglecting working and middle class families" (69% rate 10-8, 54% rate 10).
The Solution?
Despite the economic pessimism, a strong majority of workers believe restoring the American Dream is possible if business would work with unions and other organizations.
Workers do not believe the American Dream is about getting rich.
It's about getting the basics. Economic security, health care, a retirement you can live on and providing a better future for your kids. This is the American Dream.
And who do workers see as providing these fundamental improvements. Well, it's not the Bush Administration, which has at best ignored workers. No, a significant majority of working Americans feel joining unions or workers' associations will help working people achieve many of the important elements of the American Dream, such as:
- Having a job that pays enough to support a family (92% helpful, 64% definitely helpful)
- Having affordable quality health care that you can depend on (89% helpful, 60% definitely helpful)
- Being able to ensure your children have the opportunity to succeed (82% helpful, 53% definitely helpful).