Source: Sarah Anderson, John Cavanagh, Chuck Collins, Sam Pizzigati, Institute for Policy Studies, and Mike Lapham, United for a Fair Economy, August 29, 2007
From press release:
With leading Presidential candidates turning up the heat on overpaid CEOs, a new report from the Institute for Policy Studies and United for a Fair Economy documents for the first time the extreme pay gaps that have opened up not just between U.S. business leaders and American workers, but between U.S. business leaders and leaders elsewhere in American — and European — society. CEOs of large U.S. companies last year averaged $10.8 million in total compensation, over 364 times the pay of the average U.S. worker, a calculation based on data from an Associated Press survey of 386 Fortune 500 companies. The top 20 private equity and hedge fund managers, pocketed an average $657.5 million, Forbes magazine estimates. That’s 22,255 times the pay of an average U.S. worker. Workers on the bottom rung of the economy have just received their first federal minimum wage increase in a decade. But the inflation-adjusted value of the new minimum, despite the hike, stands 7 percent below the minimum wage level a decade ago. CEO pay, in that decade, has increased over inflation by roughly 45 percent.
Source: U.S. Census Bureau, CB07-120, August 28, 2007
From the news release:
Real median household income in the United States climbed between 2005 and 2006, reaching $48,200, according to a report released today by the U.S. Census Bureau. This is the second consecutive year that income has risen. Meanwhile, the nation’s official poverty rate declined for the first time this decade, from 12.6 percent in 2005 to 12.3 percent in 2006. There were 36.5 million people in poverty in 2006, not statistically different from 2005. The number of people without health insurance coverage rose from 44.8 million (15.3 percent) in 2005 to 47 million (15.8 percent) in 2006. These findings are contained in the Income, Poverty, and Health Insurance Coverage in the United States: 2006 report. The data were compiled from information collected in the 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC). Much more summary material in this news release.
Related from the Census Bureau:
• Numerous Documents and Tables Can Be Accessed Here
• Income, Earnings and Poverty in the United States: 2006
Other related items:
• Number And Percentage Of Americans Who Are Uninsured Climbs Again: Poverty Edges Down But Remains Higher, And Median Income For Working-Age Households Remains Lower, Than When Recession Hit Bottom In 2001
Source: Center on Budget and Policy Priorities, August 28, 2007
• More Americans, Including More Children, Now Lack Health Insurance
Source: Center on Budget and Policy Priorities, August 28, 2007
• U.S. Uninsured Rate Climbs Again
Source: Daniel C. Vock, Stateline.org, August 29, 2007
• Number of Uninsured U.S. Residents Increases by 2.2M to 47M in 2006
Source: Kaiser Daily Health Policy Report, August 29, 2007
Source: University of Michigan, Press release, August 7, 2007
The rich really are getting richer and the poor are getting poorer, a new University of Michigan study shows. The study–the most recent available analysis of long-term wealth trends among U.S. households is based on data from the Panel Study of Income Dynamics, conducted by the U-M Institute for Social Research (ISR) since 1968. Over the last 20 years, the net worth of the top two percentile of American families nearly doubled, from $1,071,000 in 1984 to $2,100,500 in 2005. But the poorest quarter of American families lost ground over the same period, with their 2005 net worth below their 1984 net worth, measured in constant 2005 dollars.
• Data and Documentation
Source: Hugh Price, Amy Liu, Rebecca Sohmer, Brookings Institution, Opportunity 08, August 2007
Middle-class prosperity is the cornerstone of the American Dream. Americans believe that through hard work and education families can enter the middle class and keep on climbing. However, recent evidence shows that, even with a rebounding U.S. economy, working and middle-class families are struggling more than in decades past, and upward economic mobility may not be continuing, even for those who work hard and play by society’s rules. Moreover, the road to middle-class prosperity is even rockier for minorities. Several time-honored pathways that lead to the middle class are postsecondary education, good jobs, living in viable neighborhoods, personal financial prudence, and entrepreneurship. This paper focuses on all but the last of these pathways of opportunity.
Source: NOW, PBS, Show 332, Airdate 8-10-2007
In America, the top one-tenth of one percent of earners makes about the same money per year collectively as the millions of Americans in the bottom fifty percent combined. This is putting a tight squeeze on the middle class, while leaving millions of others in the cold. This week, David Brancaccio talks with Pulitzer prize-winning financial reporter David Cay Johnston, as well as author and advocate Beth Shuman about the state of our country’s vast income divide and how it’s hurting those just trying to make ends meet.
2005 Incomes, on Average, Still Below 2000 Peak
Source: David Cay Johnston, New York Times, August 21, 2007
New IRS Data Pegs Cost of Special Low Tax Rates on Capital Gains
and Dividends at $92 Billion in 2005 Alone -Three-Quarters of the Tax Cuts Went to Best-Off 0.6 Percent
Source: Steve Wamhoff, Citizens for Tax Justice, August 10, 2007
Source: Council 31, American Federation of State, County and Municipal Employees (AFSCME), July 2007
From press release:
Council 31 of the American Federation of State, County and Municipal Employees (AFSCME) have issued a new report documenting low wage levels that keep patient-support staff art Resurrection Health Care hospitals mired in poverty and unable to support their families. Resurrection Health Care (RHC) is the second largest non-profit hospital system in the Chicago metropolitan area. It encompasses eight hospitals, as well as nursing homes, home health services, and outpatient clinics.
Entitled Coming Up Short: Resurrection Health Care’s Distorted Pay Priorities, the report depicts a starkly skewed pay structure in which the compensation of RHC hospital executives significantly exceeds national norms while the meager wages of patient-support staff (housekeepers, laundry and food service workers) fall far short of self-sufficiency standards in the Chicago area.
Source: Thomas Lemieux, W. Bentley MacLeod, Daniel Parent, Institute for the Study of Labor, IZA DP No. 2850, June 2007
We document that an increasing fraction of jobs in the U.S. labor market explicitly pay workers for their performance using bonuses, commissions, or piece-rates. We find that compensation in performance-pay jobs is more closely tied to both observed (by the econometrician) and unobserved productive characteristics of workers. Moreover, the growing incidence of performance-pay can explain 24 percent of the growth in the variance of male wages between the late 1970s and the early 1990s, and accounts for nearly all of the top-end growth in wage dispersion (above the 80th percentile).
Source: Frank S. Levy, Peter Temin, MIT Department of Economics Working Paper No. 07-17, May 1, 2007
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We provide a comprehensive view of widening income inequality in the United States contrasting conditions since 1980 with those in earlier postwar years. We argue that the income distribution in each period was strongly shaped by a set of economic institutions. The early postwar years were dominated by unions, a negotiating framework set in the Treaty of Detroit, progressive taxes, and a high minimum wage – all parts of a general government effort to broadly distribute the gains from growth. More recent years have been characterized by reversals in all these dimensions in an institutional pattern known as the Washington Consensus. Other explanations for income disparities including skill-biased technical change and international trade are seen as factors operating within this broader institutional story.
Source: Olivia Golden, Pamela Winston, Gregory Acs, Ajay Chaudry, Urban Institute, Paper 7, June 12, 2007
This paper for the Charles Stewart Mott Foundation conceptualizes a framework for a new safety net for low-income working families that is rooted in their most essential needs. It is organized around five key goals:
1. enabling parents to meet their family’s needs while working in lower-wage jobs,
2. helping families weather gaps in parental employment,
3. supporting parents’ job advancement,
4. helping parents combine work and child-rearing, and
5. improving children’s well-being and development.
The paper describes these families’ circumstances, discusses gaps in current safety-net programs, and explores possible alternative approaches to meeting families’ most pressing needs.
Source: Isabel Sawhill of The Brookings Institution and John E. Morton of The Pew Charitable Trusts, Economic Mobility Project (Pew Charitable Trusts), 2007
From press release:
American men have less income than their fathers’ generation did at the same age, according to a new analysis released today by the Economic Mobility Project, an initiative of The Pew Charitable Trusts. Comprised of a Principals’ Group of experts from The American Enterprise Institute, The Brookings Institution, The Heritage Foundation, and The Urban Institute, the project seeks to investigate the health and status of economic mobility in America.
According to the report, men who were in their thirties in 1974 had median incomes of about $40,000, while men of the same age in 2004 had median incomes of about $35,000 (adjusted for inflation). Thus, as a group, income for this generation of men is, on average, 12 percent lower than those of their fathers’ generation. While factors other than cash income also contribute to economic mobility, these data challenge the two-century-old presumption that each successive generation will be better off than the one that came before. The findings rely on new analysis of U.S. Census Bureau data.