More than 52 million
Americans live in economically distressed communities
By Sandy
English
28 September 2017
A new analysis of Census data shows that the so-called economic
recovery under the Obama administration was an unmitigated catastrophe for the
20 percent of the American population that live in the poorest areas of the
United States and that gains of jobs and income have gone overwhelming to the
top 20 percent richest areas.
“The 2017 Distressed Communities Report,”
published by the Economic Innovation Group (EIG), analyzes the census data for
2011-2015 for people living in each of the nearly 7,500 American zip codes
according to several criteria.
The EIG’s Distressed Communities Index (DCI) considers the
percentage of the population without a high school diploma, the percentage of
housing vacancies, the percentage of adults working, the percentage of the
population in poverty, the median income ratio (the percentage of median income
that a zip code has for its state), the change in employment from 2011 to 2015,
and the change in the number of businesses in the same period.
The report divides the findings for zip codes into five quintiles
based on these indicators, rated from worst- to best-performing: distressed, at
risk, mid-tier, comfortable, and prosperous.
The results show that distressed communities—52.3 million people or
17 percent of the American population—experienced an average 6 percent drop in
the number of adults working and a 6.3 percent average drop in the number of
business establishments.
“Far from achieving even anemic growth from 2011 to 2015,” the
report notes, “distressed communities instead experienced what amounts to a
deep ongoing recession.”
Further, “fully one third of the approximately 44 million
Americans receiving SNAP (Supplemental Nutrition Assistance Program or food
stamps) and other cash public assistance benefits (such as Temporary Assistance
for Needy Families (TANF)) live in distressed communities.” The report notes
that most distressed communities have seen zero net job growth since 2000.
Residents in these zip codes are five times more likely to die
than those in prosperous zip codes. Deaths from cancer, pregnancy
complications, suicide, and violence are even higher. “Mental and substance
abuse disorders are 64 percent higher in distressed counties than prosperous
ones, with major clusters in Appalachia and Native American communities where
rates exceed four or five times the national average,” the report continues.
One other important and alarming fact which the report highlights
is that over a third of the distressed zip codes contain so-called “brownfield”
sites—areas which are polluted or contaminated in some way. Not only do these
have impacts on real estate and business development, they present a whole
array of health hazards to the very poorest Americans.
Distressed communities can be found all over the United States but
are concentrated in the South: 43 percent of Mississippi’s zip codes are
distressed, followed by Alabama, West Virginia, Arkansas and Louisiana.
According to the report, [the South] “is home to a staggering 52 percent of all
Americans living in distressed zip codes—far above its 37.5 percent share of
the country’s total population.”
After this, the Southwest and Great Lakes region have the largest
share. In the Northeast, most distressed communities tend to be found in urban
areas and in the South, primarily in rural areas.
The biggest cities with the largest numbers of distressed zip
codes are Cleveland, Ohio, Newark, New Jersey, Buffalo, New York, Detroit,
Michigan and Toledo, Ohio. Mid-sized cities with the highest number of
distressed zip codes include Youngstown, Ohio, Trenton, New Jersey, Camden, New
Jersey, Gary, Indiana, Hartford, Connecticut and Flint, Michigan.
Urban counties with the highest number of distressed zip codes
include Cook County in Illinois, with Chicago at its center, Los Angeles County
in California, Harris County in Texas, with Houston at its center, and Wayne
County in Michigan, encompassing Detroit. Most of these urban areas were once
industrial centers and home to the industrial working class.
Distressed zip codes that have a majority of minorities living in
them are more than twice as likely to be distressed as zip codes that are
majority white. “In total,” the report notes, “45 percent of the country’s
majority-minority zip codes are distressed and only 7 percent of them are
prosperous.” At the same time there are numerous distressed communities that
are almost completely white. A quarter of the total distressed population is
under 18.
The report found that the economic benefits of the recovery after
the 2008 recessions have gone to the top quintile of zip codes, where the
wealthier layers of the population live, including not only the very rich but
also the upper middle class.
These areas, which the DCI terms prosperous, and make up roughly
85 million Americans or 27 percent of the US population, have for the most part
the economic wherewithal to finance higher levels of education, have the lowest
housing vacancy, highest percentage of working adults, and have had the lion’s
share of job and business expansion.
“The job growth rate in the top quintile was 2.6 times higher than
nationally from 2011 to 2015, and business establishments proliferated three
times faster than they did at the national level,” the report notes.
“Prosperous zip codes stand worlds apart from their distressed counterparts,
seemingly insulated from many of the challenges with which other communities
must grapple. The poverty rate is more than 20 points lower in the average
prosperous community than it is in the average distressed one.”
The report makes much less of an analysis of the other three,
middle quintiles, the at risk, mid-tier, and comfortable categories, but it
does note some trends that address the overall trends nation-wide. “A
remarkably small proportion of places fuel national increases in jobs and
businesses in today’s economy. High growth in these local economic powerhouses
buoys national numbers while obscuring stagnant or declining economic activity
in other parts of the country.”
One of the more telling aspects of the report is that extreme
poverty in the US is presided over by both capitalist parties: Democratic and
Republic politicians have equal numbers of distressed communities in their
constituencies. Democrats, in fact, “represent six of the 10 most distressed
congressional districts.”
Another observation from the voting data, and one of the few that
looks at conditions beyond the bottom and top quintiles, is worth quoting in
full:
“President Trump accumulated a 3.5 million vote lead in counties
that fell into the bottom three quintiles of well-being (equivalent to 9.4
percent of all votes cast in these counties). A vast array of factors
determined voting patterns in the 2016 election, but it stands that the
‘continuity’ candidate performed better in the places benefiting most from the
status quo, while the ‘change’ candidate performed better in the places one
would expect to find more dissatisfaction.”
Broader figures and the historical view of wealth distribution in
the US—that one percent of the population control 40 percent of the wealth or
the decades-long decline in the percentage of the national income that goes to
the working class—is not brought out in the report but the data add to a
complete picture of social conditions across the United States, the character
and geographical distribution of social and economic conditions in a country of
more than 320 million.
The portrait provided by the EIG report is not simply one of
increasing misery and poverty for the bottom 20 percent, and not only one in
which only a minority of Americans are achieving anything like “prosperity,”
but of growing and explosive dissent among tens of millions.
It exposes as a bold-faced lie the claim that President Obama made
at the end of his second term, that “things have never been better” in America.
September 20, 2017
The Awful Future that
Looms for a Majority of Today’s Americans
When it comes to the future, an overwhelming majority of Americans
have adopted a mindset that is a variation of Isiah 22:12: “Let us eat, drink
and be merry for tomorrow does not matter.” Recently, federal debt
surpassed the $20 Trillion mark (additional state and local debt amount to
another $2.9 Trillion). That milestone
was greeted by the Ruling Class and a vast preponderance of the citizenry with
a yawn and a shrug of the shoulder. As the ongoing determination to
promote new entitlement spending and the refusal to rein in, but instead to
expand, existing programs continues unabated.
Any attempt to seriously discuss the financial fate of the nation
is ignored and dismissed with the proviso that its someone else’s problem for
another day down the road. In reality, this dilemma is not someone else’s
problem. The average life expectancy in the United States today is
79. That means that over 225 million citizens and non-citizens in the
country today will still be alive in 30 years.
And what will this nation be facing 30 years hence?
Recently, the Government Accountability Office as well as a number
of experts such as Price Waterhouse have projected what
that scenario will be if the country remains on its present course (with no new
entitlements such as single payer health care and government mandated and paid
maternity leave.) Note: All dollar amounts are in 2017 Dollars.
A. Federal, State and local government spending
currently amounts to $7 Trillion per year or 37% of the nation’s Gross Domestic Product (GDP). By
2048 these entities combined will be spending in excess of $17 Trillion per
year, or over 50% of GDP. As interest costs on the overall debt
will increase from $0.4 Trillion to $2.4 Trillion, healthcare spending
(includes Obamacare subsidies) will vault from $1.6 Trillion to $3.7 Trillion,
Social Security and pension payments will grow from $1.4 Trillion to $3.5
Trillion, education spending from $1 Trillion to $2.4 Trillion, and welfare
programs from $0.5 Trillion to $1.3 Trillion.
B. The dramatic increase in
spending and borrowing combined with the inevitable necessity of increased tax
rates will crowd out private and public investment thereby slowing the growth
of productivity, worker’s wages and the GDP. The Congressional Budget
Office estimates that by 2040 the average annual real income per person will fall by $6,000.00. Thus, by 2048 the GDP
of the United States will lag significantly behind China and India, as it falls
to third place among the nations of the world. The U.S. GDP will increase
only 76% by 2048 while government spending increases by 142%.
C. Concurrent with and
because of the spending, stagnant growth and reduced personal income, the
overall government debt will increase significantly as tax proceeds (despite
eventual higher rates) will not generate anything close to the revenue
necessary to offset spending, as tax revenues to the Federal, State and local
governments will not exceed 30% of the GDP, whereas spending will absorb 51% of
the GDP. By 2048 the overall government debt (Federal, State and local
may well exceed $68 Trillion as compared to $23 Trillion today. Thus, the
interest costs will increase fivefold, as not only does the debt swell, but the
United States will have to appeal to lenders willing to underwrite a nearly
bankrupt nation. Today this country, with 5% of the world’s population,
accounts for over 32% of Global debt, but by 2048 it will
account for 49% of Global debt. In essence, America will be at the mercy
of the rest of the world and a second-tier economy.
D. Over the next 30 years
there will be inevitable recessions, global financial crises and international
military encounters. The United States will, with this level of
debt and spending, find itself in an increasingly precarious position, as it
may not be able to successfully weather any serious economic downturn or global
conflict.
E.
The above statistics do not include the current Democratic Party’s
love affair with single-payer healthcare or “Medicare for all.” If that
program were included, the annual government expenditures in 2048 (over and
above current healthcare spending and interest costs) would balloon from $17
Trillion to $20 Trillion (60% of annual GDP) (and the debt would
grow from $68 Trillion to over $86 Trillion.
The tsunami that will inundate this nation is inevitable as there
is no willingness, regardless of party, to confront these issues.
The Democrats and their mind-numbed followers, now fully wedded to
socialism, have convinced each other, and unfortunately much of the citizenry,
that there is a bottomless pit of money to be siphoned from the so-called rich
and the golden goose that is Capitalism, the engine of the nation’s GDP, will
continue in perpetuity to lay the gold eggs regardless of any abuse or
restraint. The one-time confiscation of the wealth of all the billionaires
in the U.S. would amount to $2.2 Trillion (less than 31% of all government
spending in 2017). Further, Capitalism cannot thrive without capital and
profit, both of which the Democrats would severely restrict and control, thus,
exacerbating the scenario outlined above.
The Republicans, while cognizant of the dire future ahead, prefer
to hide their heads in the sand and defer matters to another day and another
Congress and another President, as they are fearful of telling the people the
truth and risk losing political power. Thus, their pre-determined
inability and lack of fortitude in addressing Obamacare or any long-term
spending programs.
Donald Trump continues to tout new programs (such as paid
maternity leave), adamantly refuses to address the out of control entitlement
spending, and is content with modified single-payer health care. He
claims that economic growth will take care of all the problems; however, unless
he and his successors find a way to grow the economy at an annual 5-7% per year
for the next 20 to 30 years, that platitude is meaningless (the highest
ten-year period of GDP growth -- 6.7% -- in the past 100 years took place
in 1939-1948, which included massive
war production for World War II). President Trump, has no plan or desire
to mitigate the disaster looming on the horizon preferring to kick the can down
the road while mouthing the usual banalities about reining in spending.
Thus, the populace, instead of being aware of the disaster ahead,
is taking its lead from the Ruling Class. Alternatively, the American
people are blithely swimming in a sea of banalities and faux causes.
Whether it is promoting transgenderism, drowning in cults of personality, defacing
and tearing down statues, feverously looking for supposed racism under every
rock, asserting hypothetical compassion in the promotion of open borders and
amnesty for untold millions, breathlessly endorsing the false God of climate
change, cheering for their side of the political spectrum to humiliate the
other, or demanding that government make their lives better.
I will not be among the 225 million Americans living today that
will be alive in 2048. I have been fortunate to live throughout the
golden age of America’s power and influence, but regrettably to also see the
impending end of this glorious and short-lived era. The true
tragedy is that those 225 million refuse to understand that for them there is
no tomorrow to disregard.
When it comes to the future, an overwhelming majority of Americans
have adopted a mindset that is a variation of Isiah 22:12: “Let us eat, drink
and be merry for tomorrow does not matter.” Recently, federal debt
surpassed the $20 Trillion mark (additional state and local debt amount to
another $2.9 Trillion). That milestone
was greeted by the Ruling Class and a vast preponderance of the citizenry with
a yawn and a shrug of the shoulder. As the ongoing determination to
promote new entitlement spending and the refusal to rein in, but instead to
expand, existing programs continues unabated.
Any attempt to seriously discuss the financial fate of the nation
is ignored and dismissed with the proviso that its someone else’s problem for
another day down the road. In reality, this dilemma is not someone else’s
problem. The average life expectancy in the United States today is
79. That means that over 225 million citizens and non-citizens in the
country today will still be alive in 30 years.
And what will this nation be facing 30 years hence?
Recently, the Government Accountability Office as well as a number
of experts such as Price Waterhouse have projected what
that scenario will be if the country remains on its present course (with no new
entitlements such as single payer health care and government mandated and paid
maternity leave.) Note: All dollar amounts are in 2017 Dollars.
A. Federal, State and local government spending
currently amounts to $7 Trillion per year or 37% of the nation’s Gross Domestic Product (GDP). By
2048 these entities combined will be spending in excess of $17 Trillion per
year, or over 50% of GDP. As interest costs on the overall debt
will increase from $0.4 Trillion to $2.4 Trillion, healthcare spending
(includes Obamacare subsidies) will vault from $1.6 Trillion to $3.7 Trillion,
Social Security and pension payments will grow from $1.4 Trillion to $3.5
Trillion, education spending from $1 Trillion to $2.4 Trillion, and welfare
programs from $0.5 Trillion to $1.3 Trillion.
B. The dramatic increase in
spending and borrowing combined with the inevitable necessity of increased tax
rates will crowd out private and public investment thereby slowing the growth
of productivity, worker’s wages and the GDP. The Congressional Budget
Office estimates that by 2040 the average annual real income per person
will fall by $6,000.00. Thus, by 2048 the GDP
of the United States will lag significantly behind China and India, as it falls
to third place among the nations of the world. The U.S. GDP will increase
only 76% by 2048 while government spending increases by 142%.
C. Concurrent with and
because of the spending, stagnant growth and reduced personal income, the
overall government debt will increase significantly as tax proceeds (despite
eventual higher rates) will not generate anything close to the revenue
necessary to offset spending, as tax revenues to the Federal, State and local
governments will not exceed 30% of the GDP, whereas spending will absorb 51% of
the GDP. By 2048 the overall government debt (Federal, State and local
may well exceed $68 Trillion as compared to $23 Trillion today. Thus, the
interest costs will increase fivefold, as not only does the debt swell, but the
United States will have to appeal to lenders willing to underwrite a nearly
bankrupt nation. Today this country, with 5% of the world’s population,
accounts for over 32% of Global debt, but by 2048 it will
account for 49% of Global debt. In essence, America will be at the mercy
of the rest of the world and a second-tier economy.
D. Over the next 30 years
there will be inevitable recessions, global financial crises and international
military encounters. The United States will, with this level of
debt and spending, find itself in an increasingly precarious position, as it
may not be able to successfully weather any serious economic downturn or global
conflict.
E.
The above statistics do not include the current Democratic Party’s
love affair with single-payer healthcare or “Medicare for all.” If that
program were included, the annual government expenditures in 2048 (over and
above current healthcare spending and interest costs) would balloon from $17
Trillion to $20 Trillion (60% of annual GDP) (and the debt would
grow from $68 Trillion to over $86 Trillion.
The tsunami that will inundate this nation is inevitable as there
is no willingness, regardless of party, to confront these issues.
The Democrats and their mind-numbed followers, now fully wedded to
socialism, have convinced each other, and unfortunately much of the citizenry,
that there is a bottomless pit of money to be siphoned from the so-called rich
and the golden goose that is Capitalism, the engine of the nation’s GDP, will
continue in perpetuity to lay the gold eggs regardless of any abuse or
restraint. The one-time confiscation of the wealth of all the
billionaires in the U.S. would amount to $2.2 Trillion (less than 31% of all
government spending in 2017). Further, Capitalism cannot thrive without
capital and profit, both of which the Democrats would severely restrict and
control, thus, exacerbating the scenario outlined above.
The Republicans, while cognizant of the dire future ahead, prefer
to hide their heads in the sand and defer matters to another day and another
Congress and another President, as they are fearful of telling the people the
truth and risk losing political power. Thus, their pre-determined
inability and lack of fortitude in addressing Obamacare or any long-term
spending programs.
Donald Trump continues to tout new programs (such as paid
maternity leave), adamantly refuses to address the out of control entitlement
spending, and is content with modified single-payer health care. He
claims that economic growth will take care of all the problems; however, unless
he and his successors find a way to grow the economy at an annual 5-7% per year
for the next 20 to 30 years, that platitude is meaningless (the highest
ten-year period of GDP growth -- 6.7% -- in the past 100 years took place
in 1939-1948, which included massive
war production for World War II). President Trump, has no plan or desire
to mitigate the disaster looming on the horizon preferring to kick the can down
the road while mouthing the usual banalities about reining in spending.
Thus, the populace, instead of being aware of the disaster ahead,
is taking its lead from the Ruling Class. Alternatively, the American
people are blithely swimming in a sea of banalities and faux causes.
Whether it is promoting transgenderism, drowning in cults of personality,
defacing and tearing down statues, feverously looking for supposed racism under
every rock, asserting hypothetical compassion in the promotion of open borders
and amnesty for untold millions, breathlessly endorsing the false God of
climate change, cheering for their side of the political spectrum to humiliate
the other, or demanding that government make their lives better.
I will not be among the 225 million Americans living today that
will be alive in 2048. I have been fortunate to live throughout the
golden age of America’s power and influence, but regrettably to also see the
impending end of this glorious and short-lived era. The true
tragedy is that those 225 million refuse to understand that for them there is
no tomorrow to disregard.
Rural New York schools
grapple with declining population, increasing poverty
By Jason
Melanovski
20 September 2017
A recent report has
highlighted the dire development of increasing poverty and declining enrollment
many rural school districts are facing across New York state, forcing these
districts to choose between making onerous cuts, combining with other districts,
or closing schools within the district, thus forcing students to travel longer
distances.
According to a
report titled “Demographic Challenges Facing Rural Schools: Declining
Enrollment and Growing Poverty” by the New York State Association of School
Business Officials, the dual phenomena of increased poverty and lower
enrollment are wreaking havoc on local school budgets, which are primarily
funded by local property taxes.
Calling enrollment
declines “omnipresent,” the report states that “96.7 percent of rural school
districts had declining enrollment and 84.9 percent had drops of at least ten
percent.”
While the rate and
overall population in poverty is still higher in New York’s suburban and urban
school districts, the poverty rate in rural areas is increasing at a noticeably
faster pace.
From 2003 to 2015,
the poverty rate for school-age children increased from 14 percent to 18
percent for children in rural school districts and from 19 percent to 21
percent for children in non-rural school districts. For both rural and
non-rural school districts the greatest jump in poverty rates occurred between
2009 and 2011 following the 2008 financial crisis.
Another measure of
the economic plight of school children is the percentage of children receiving
free or reduced priced lunches. In rural school districts 48.3 percent of
students receive free or reduced priced lunches, and that number rises to 53.2
percent of students in non-rural districts. A student is eligible for free or
reduced priced lunch when his or her family makes less than 185 percent of the
poverty level.
Although the report
was released to shed light on the challenges facing rural school districts, it
made clear that poverty among the state’s school children has no geographic
limits. According the report, “The combination of poverty and Free- and
Reduced-Price Lunch (FRPL) data show that a little more than one in every five
schoolchildren in New York lives in poverty, while a little more than half of
all school children face significant economic constraints at home.”
The report compiled
data from the 340 rural school districts, which make up about half of those in
New York State, but serve only a little more than 11 percent of the students.
The report noted
that the population losses and increases in poverty cannot be separated from
the financial crisis of 2008, stating “for a few years prior to the onset of
the Great Recession, growth rates in urban and rural counties were closely
related. Beginning in 2008, rural populations entered a period of sustained
decline, while urban populations continued to grow, though their pace of growth
slowed after 2011.”
According to United
States Census data, the emptying of much of rural America can be directly
connected to the shrinking number of jobs in non-metro areas, as the rural job
market is now 4.26 percent smaller than it was in 2008.
Speaking to the Daily
Star of Oneonta, NY, the rural Delaware Academy School
District’s Superintendent Jason Thomson stated that the current 47 percent of
students who qualify for free or reduced price meals is the “highest we’ve ever
seen.”
In addition, many
of the rural counties mentioned in the report have also been hit hard by the
opioid epidemic, claiming the lives of young workers and reducing an already
declining population. Tioga County, for instance, lost up to 10 percent of its
population between 2002 and 2016 and averaged 16.7 opioid deaths from 2013 to
2015 according to New York state.
With rapidly
declining enrollment, rural schools are forced to count on smaller and smaller
budgets with each succeeding school year, resulting in cuts to classes,
teachers, programs and extracurricular activities and an overall sense of
living in a world with scant opportunities for future life.
As the report
states, rural “schools may have to cut back on valuable academic and enrichment
opportunities, from Advanced Placement courses to music and sports programs,
when they no longer have the student numbers needed for viability. Any
potential reductions in college readiness preparation are incredibly serious.
Decreasing enrollment can also increase students’ sense of isolation as there
are literally fewer peers for them to interact with.”
To add to an
already dire state of morale in rural schools, despite the fact that poor rural
schools often have significantly higher graduation rates than poor urban
schools, diplomas from rural schools are often seen as “worthless” according to
David Little, executive director of the New York State Rural Schools
Association. Poor rural schools in New York are simply unable to afford the
cost of offering advanced placement (AP) and college-level coursework that is
seen as necessary by college admissions officers.
For its part, the
New York state government and the Andrew Cuomo administration have failed to
respond to the demographic and social declines in rural school districts and
increase state aid. The state continues to use a formula created in 2008, prior
to the financial crisis, which categorizes the majority of rural schools as
“average need.” If current demographic and poverty data were used, the majority
of rural schools would now be considered “high-need,” requiring increased state
aid.
Increasing rural
poverty is not unique to New York. It has been rising across the country after
falling sharply over many decades to a record low rate in 2000 of 13.4 percent.
16.7 percent of rural Americans lived in poverty in 2015, compared to 13
percent in poverty within metropolitan areas, according to the United States
Census Bureau.
US Census report shows increasing
social inequality
By Eric
London
15 September 2017
US Census data from
2016 released on Tuesday shows increasing social inequality amid a small gain
in household income that is offset by a massive growth of personal debt and
rising living costs.
The data tracks the
ongoing redistribution of wealth from the working class to the wealthy as a
result of the pro-Wall Street policies of both the Republican and Democratic
parties. It substantiates the oligarchic character of the United States.
Social
inequality
The Gini index, used to measure social inequality, with higher
figures indicating a wider economic divide, rose slightly from 2015 (.479) to
2016 (.481). The 2016 figure, according to rankings in the CIA World Factbook, makes the
US slightly more equal than Madagascar and less equal than Mexico.
In terms of
aggregate income share, the shift from 2015 to 2016 is as follows:
The growth in
inequality is even starker when traced from 2007, the year before the Wall
Street crisis.
The data reflects
income and not wealth, thereby providing an incomplete and conservative
indication of the scale of inequality. Even within the highest quintile, the
income share increased only for the top 10 percent, and, in particular, the top
5 percent.
Household income
The corporate media
has portrayed the report as a sign of positive income growth, since it shows a
slight rise in median income of 3.2 percent from 2015 to 2016.
But according to
the Census data, the earnings of “full-time, year-round workers” remained
stagnant. For men in this category, a total of 63.9 million people, earnings
declined by 0.4 percent, from $51,859 in 2015 to $51,640 in 2016. For women in
this category, 47.2 million people, there was a minor increase, 0.7 percent,
from $41,257 in 2015 to $41,554 in 2016. In other words, families with 2 adults
working full-time saw a paltry $78 increase in their yearly earnings from 2015
to 2016.
Claims of rising
incomes mask the growth of inequality. The Census data shows that the household
income of the 90th percentile (the 100th being the highest) was 12.53 times
higher than the household income of the 10th percentile in 2016, up from 12.23
times higher in 2015 and 11.18 times higher in 2007. The degree to which income
is concentrated in the richest 10 percent of the population is exemplified by
the fact that the 5th percentile boasted a household income 3.82 times higher
than the 50th percentile in 2016, up from 3.79 times in 2015 and 3.52 in 2007.
As Bloomberg
News reported Wednesday, “Since 2007, average
inflation-adjusted income has climbed more than 10 percent for households in
the highest fifth of the earnings distribution, and it’s fallen 3.2 percent for
the bottom quintile. Incomes of the top 5 percent jumped 12.8 percent over the
period.”
For the working
class, any income increase was transferred to the corporate elite in the form
of rising debt payments and increasing living expenses, especially for health
care.
According to
figures from eHealth, a large private health exchange, average deductibles for
families rose 5 percent from 2016 to 2017 (a year after the period covered by
the Census report) and average individual premiums rose 22 percent over the
same period.
The rising cost of
student debt alone largely erases income increases seen by some young people.
According to the Census, those aged 15 to 24 saw an income increase of 13.9
percent, from $36,564 in 2015 to $41,655 in 2016, while incomes for young
people aged 25 to 34 rose 4.9 percent, from $58,091 to $60,932, nearly double
the percentage increase for older age groups.
However, in 2016,
student debt rose to an average of $30,000 per young person, up 4 percent from
2015, eliminating over 80 percent of the income rise for 25-34 year olds. For
15 to 24 year olds, the $4,000 increase in median income would hardly cover one
sixth of the average debt payment, let alone make up for the fact that young
people face a future in which they are unlikely to receive a pension, Social
Security or Medicare.
Rising debt levels are not a phenomenon limited to young people.
A Bloomberg report
from August 10 notes that credit card defaults increased from the beginning of
2015—when roughly 2.5 percent of debt holders defaulted—to the end of 2016,
when the total hit 3 percent. This figure subsequently climbed in 2017 to reach
3.49 percent.
Bloomberg notes: “After
deleveraging in the aftermath of the last US recession, Americans have once
again taken on record debt loads that risk holding back the world’s largest
economy... Household debt outstanding--everything from mortgages to credit
cards to car loans--reached $12.7 trillion in the first quarter [2017],
surpassing the previous peak in 2008 before the effect of the housing market
collapse took its toll, Federal Reserve Bank of New York data show.”
“For most Americans,”
the report continues, “whose median household income, adjusted for inflation,
is lower than it was at its peak in 1999, borrowing has been the answer to
maintaining their standard of living. The increase in debt helps explain why
the economy’s main source of fuel is providing less of a boost than in the
past. Personal spending growth has averaged 2.4 percent since the recession
ended in 2009, less than the 3 percent of the previous expansion and 4.3
percent from 1982-90.”
The Bloomberg report
explains that income from wages minus household debt trended downward in 2015,
meaning that debt is rising faster than wages, causing a loss of roughly $500
billion across the US economy in the space of just one year.
Poverty rate
Though the Census
report shows that the poverty rate declined from 13.5 percent of households in
2015 to 12.7 percent in 2016, this figure is substantially higher than the 11.3
percent level that prevailed in 2000. In reality, individuals and families must
make 2.5 to 3 times the official poverty rate of $12,000 for an individual,
$15,500 for a married couple and $25,000 for a family of four just to make ends
meet.
What the data
really shows is that the poorest half of the country--over 150 million
people--is in a desperate financial position, with the next poorest 40 percent
facing constant financial strain and a declining share of the national income.
In regard to poverty, the Census Bureau maintains figures that go up only to
200 percent of the official poverty level. The latest report shows that 95
million people—29.8 percent of the population—fall into this category. The
share of those under the age of 18 in this category is much higher--39.1
percent.
This is the context
for the drive by the Trump administration and both big business parties to
slash corporate taxes, impose a health care “reform” that will increase costs
for millions of people, and accelerate the transfer of wealth from the working
class to the financial aristocracy.
Census Bureau: Mens’
Wages Remain Below 1973 Levels
AP
Photo/David Goldman
Americans’ median pay packets have been flat since 1973, even
though the vastly expanded federal government has justified its own salaries
and its many massive spending and policy programs as a sure-fire way to
boost education, productivity, and wages.
The
colossal 44-year failure of the federal government to help grow American men’s
wages — or even to reduce poverty rates — is laid bare in the latest
report from the Census Bureau, “Income
and Poverty in the United States: 2016.”
The dense report includes
myriad detailed tables of data around one shocking chart, which reveals no
growth in men’s wages for the past 44 years, or since President Richard Nixon
was beginning his second term in office.
Median earning of full-time, year-round workers, 15 years and
older, 1960 to 2016.
The sudden flatline
followed a 31 percent rise in all men’s median wages from 1960 to 1972.
During the 44-year period
since 1973, income among women grew by roughly 30 percent as more skilled and
trained women entered the market, gained experience, and were promoted to
better-paying jobs. Those opportunities and contributions are good news — but
they do not change the reality that men’s income has been flat for 44 years.
In fact, the report notes
that “the real median earnings of full-time, year-round working men were 1.1
percent lower in 2016 than in 2007.”
There
are many explanations for the flat income, such as the massive growth in the
labor supply when 30 million additional American women and roughly 30 million
immigrants joined in the marketplace competition for good jobs. For example, a
pro-immigration panel at the prestigious National Academies of Science
estimated in 2016 that the huge government-imposed inflow of immigrants
since 1965 has imposed a hidden 5 percent “immigration tax” on Americans’ pay
packets.
Technology has made many
individuals workers more productive but also sidelined many others, such
as newspaper printers and steelworkers. Peaceful international trade has
allowed men to sell more products overseas but also allowed employers to hire
foreign workers instead of Americans. Whatever the combinations of reasons, the
mid-point for men’s income has been flat for 43 years, according to the Census
Bureau.
The flat-earnings chart
needs some explanation:
It shows only
inflation-adjusted, pre-tax pay packets, so it excludes the impact of
inflation, taxes and government benefits, such as food-stamps and tax-breaks
for children, or of Obamacare’s subsidies and spending obligations.
It shows median income,
which is the midpoint of the income scale. Half the people earn above the line,
half the people earn below the line. Average income would be higher, but less
revealing, because a higher share of income is going to the highest earners,
compared to back in the 1970s.
The chart shows the income
of year-round, full-time workers, excluding part-workers or seasonal workers,
or those who work on-and-off under contracts. The chart does not make
distinctions by race.
The chart shows
individuals’ income, not the income of households, which has fluctuated as
the average number of children or adults has declined.
The chart only shows income,
but not the quality of goods in the stores, such as Starbucks coffee, cheap
products imported from China, high-tech music players, improved autos or better
health-care. That rise in product quality from competing companies — not
claimed policy improvements from federal agencies — has provided the vast
majority of material gains for Americans amid flat incomes.
The
details are provided on Table A-4, on page 49 of this PDF.
The median earnings for all
men employed year-round was $51,640 in 2016, which is still far below the
$54,030 earned by full-time men in 1973. It is also below the $51,938 earned in
the 2000 Internet boom, or the $52,222 earned in the 2007 property bubble when
large-scale legal and illegal immigration provided employers with millions of
alternative imported workers.
The post-1973 reality of
flat income is a huge contrast to the rapid growth from 1960 up to the 1973 oil
shock and the reopened inflow of immigrant labor after 1965. During the
twelves years 1960 to 1972, the median average wages for all males — including
minorities, seasonal workers, and contract workers — rose from by 31 percent,
from $31,926 to $41,013.
When the income of all men
is gauged, the Bureau concluded that all men’s median income in 1973 was
$41,935. It dropped after 1973 and rose back up to $43,360 in 1999 as companies
competed for the few unemployed workers during the first Internet boom. Income crashed
in 2008 to a depression-low of $39,636 in 2012 once the federal government’s
real-estate bubble burst. Since then, income has slowly climbed back to $42,220
in 2016 amid the continuous public protest against the federal government’s
cheap-labor economic strategy, which is exemplified by the bipartisan 2013
“Gang of Eight” amnesty legislation.
Other data in the report
shows that the nation’s poverty rates have barely budged since the 1960s,
although many people in the United States are wealthier than many people n
Europe. For example, the percentage of American said to be in poverty was 11.1
percent in 1973 and 12.7 percent in 2016.
That national poverty rate
climbed, in part, because of the population of Latinos spiked from 10.8 million
in 1973 to 57.6 million in 2016. Poverty among Latinos was 19 percent in
2016, little changed from 1973.
The report also noted that:
The official poverty rate
decreased by 0.8 percentage points between 2015 and 2016. At 12.7 percent, the
2016 poverty rate is not statistically different from 2007 (12.5 percent), the
year before the most recent recession.
In real terms, median
earnings of full-time, year-round working women in 2016 were 2.3 percent higher
than their 2007 median, the year before the most recent recession. The real
median earnings of full-time, year-round working men were 1.1 percent lower in
2016 than in 2007.
In 2017, the number and
percentage of shared households remained higher than in 2007, the year before
the most recent recession. In 2007, 17.0 percent of all households
were shared households, totaling 19.7 million households. In 2017, 19.4
percent of all households were shared households, totaling 24.6 million
households.
OBAMA-CLINTONOMICS to serve the
filthy rich
The same period has seen a massive growth of social inequality,
with income and wealth concentrated at the very top of American society to an
extent not seen since the 1920s.
“This study follows reports released over
the past several months documenting rising mortality rates among US workers due
to drug addiction and suicide, high rates of infant mortality, an overall
leveling off of life expectancy, and a growing gap between the life expectancy
of the bottom rung of income earners compared to those at the top.”
A
'Read-My-Lips' Moment for Trump?
President Donald J. Trump participates a Hurricane Irma briefing
call with FEMA Administrator William "Brock" Long, Monday, Sept. 11,
2017, joined by White House Chief of Staff Gen. John Kelly, left; Homeland
Security and Counter Terrorism Adviser Thomas Bossert, right, and Deputy
Homeland Security Adviser John J. Daly, seated, in the Oval Office at the White
House in Washington, D.C. ( Official White House Photo by Shealah Craighead)
"Having
cut a deal with Democrats for help with the debt ceiling, will Trump seek a
deal with Democrats on amnesty for the 'Dreamers' in return for funding for
border security?"
The answer
to that question, raised in my column a week ago, is in. Last night, President
Donald Trump cut a deal with "Chuck and Nancy" for amnesty for
800,000 recipients of the Deferred Action for Childhood Arrivals program who
came here illegally as youngsters, in return for Democratic votes for more
money for border security.
According
to preening Minority Leader Pelosi, the agreement contains not a dime for
Trump's Wall, and the "Dreamers" are to be put on a long glide
"path to U.S. citizenship."
Trump denies
this is amnesty, and says the Wall comes later.
Fallout?
Among the most enthusiastic of
Trump backers, disbelief, disillusionment
and wonderment at where we go from here.
Trump's
debt-ceiling deal cut the legs out from under the GOP budget hawks. But amnesty
would pull the rug out from under all the folks at those rallies who cheered
Trump's promise to preserve the country they grew up in from this endless Third
World invasion.
For make
no mistake. If amnesty is granted for the 800,000, that will be but the first
wave. "There are reasons no country has a rule that if you sneak
in as a minor you're a citizen," writes Mickey Kaus, author of
"The End of Equality," in The Washington Post.
"We'd
be inviting the world. ... (An amnesty) would have a knock-on effect. Under
'chain migration' rules established in 1965 ... new citizens can bring in their
siblings and adult children, who can bring in their siblings and in-laws until
whole villages have moved to the United States.
"(T)oday's
690,000 dreamers would quickly become millions of newcomers who may well be
low-skilled and who would almost certainly include the parents who brought them
— the ones who in theory are at fault."
Trump is
risking a breach in the dam. If the populists who provided him with decisive
margins in Ohio, Wisconsin, Michigan and Pennsylvania feel betrayed, it's hard
to blame them.
Why did
Trump do it? Clearly, he relished the cheers he got for the debt ceiling deal
and wanted another such victory. And with the rampant accusations of a lack of
"compassion" for his cancellation of the temporary Obama
administration amnesty, he decided he had had enough heat.
It is not
easy to stand up for long to the gale force winds of hostile commentary that
blow constantly through this city.
Trump's
capitulation, if that is what turns out to be, calls to mind George H. W.
Bush's decision in 1990 to raise the Reagan tax rates in a deal engineered for
him by a White House-Hill coalition, that made a mockery of his "Read my
lips! No new taxes!" pledge of 1988.
For
agreeing to feed the beast of Big Government, rather than cut its rations as
Reagan sought to do, Bush was called a statesman.
By the
fall of '92, the cheering had stopped.
Can Trump not know that those congratulating him for his
newfound flexibility will be rejoicing, should Bob Mueller indict his family
and his friends, and recommend his impeachment down the road?
What makes
pre-emptive amnesty particularly disheartening is that the Trump policy of
securing the border and returning illegal immigrants to their home countries
appears, from a Census Bureau report this week, to be precisely the
prescription America needs.
In 2016,
paychecks for U.S. households reached an average of $59,039, up 3.2 percent
from 2015, a year when they had surged.
U.S.
median household income is now at its highest ever.
Yet there
are inequalities. Where the median family income of Asian-Americans is above
$81,400, and more than $65,000 for white Americans, the median family income of
Hispanic families is $47,675, and that of African-American households far less,
$39,490.
Consider.
Though black Americans are predominantly native-born, while high percentages of
Hispanics and Asians are immigrants, from the Census numbers, Hispanics earn
more and Asians enjoy twice the median family income of blacks, which is below
where it was in 2000.
Still,
black America remains steadfastly loyal to a party that supports the endless
importation of workers who compete directly for jobs with them and their
families. Writes Kaus, "The median hourly wage (of DACA recipients) is
only $15.34, meaning that many are competing with hard-pressed, lower-skilled Americans."
Looking
closer at the Census Bureau figures, Trumpian economic nationalism would appear
to have its greatest appeal to the American working class, a huge slice of
which is native-born, black and Hispanic.
The
elements of that policy?
Secure the
border. Halt the invasion of low-wage workers, here legally and illegally, from
the Third World. Tighten the labor market to force employers to raise wages in
our full-employment economy. Provide tax incentives to companies who site
factories in the USA. Impose border taxes on the products of companies who move
plants abroad.
Put
America and American workers first.
Will any
amnesty of undocumented workers do that?
Patrick
J. Buchanan is the author of a new book, "Nixon's White House Wars: The
Battles That Made and Broke a President and Divided America Forever."