H|o|m|e|G|u|y
2014-04-22 16:19:29 UTC
Drudge's headline for today:
============
The American Middle Class Is No Longer the Worlds Richest
============
Guess what country has surpassed the unites states of Apathy?
Surpassed it in 2010.
But really, in so many other ways, surpassed it back in 2003.
Oh Canada.
In a related story:
Number Of Middle Age Californians Living With Their Parents Soars
http://www.zerohedge.com/news/2014-04-22/welcome-recovery-and-your-parents-home-middle-age-californians-living-their-parents-
=====================================================
APRIL 22, 2014
The American middle class, long the most affluent in the world, has lost
that distinction.
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.
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 numbers, based on surveys conducted over the past 35 years, offer
some of the most detailed publicly available comparisons for different
income groups in different countries over time. They suggest that most
American families are paying a steep price for high and rising income
inequality.
Continue reading the main story
Related Coverage
Although economic growth in the United States continues to be as strong
as in many other countries, or stronger, a small percentage of American
households is fully benefiting from it. Median income in Canada pulled
into a tie with median United States income in 2010 and has most likely
surpassed it since then. Median incomes in Western European countries
still trail those in the United States, but the gap in several
including Britain, the Netherlands and Sweden is much smaller than it
was a decade ago.
In European countries hit hardest by recent financial crises, such as
Greece and Portugal, incomes have of course fallen sharply in recent
years.
The income data were compiled by LIS, a group that maintains the
Luxembourg Income Study Database. The numbers were analyzed by
researchers at LIS and by The Upshot, a New York Times website covering
policy and politics, and reviewed by outside academic economists.
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.
LIS counts after-tax cash income from salaries, interest and stock
dividends, among other sources, as well as direct government benefits
such as tax credits.
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 worlds
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.
The idea that the median American has so much more income than the
middle class in all other parts of the world is not true these days,
said Lawrence Katz, a Harvard economist who is not associated with LIS.
In 1960, we were massively richer than anyone else. In 1980, we were
richer. In the 1990s, we were still richer.
That is no longer the case, Professor Katz added.
Median per capita income was $18,700 in the United States in 2010 (which
translates to about $75,000 for a family of four after taxes), up 20
percent since 1980 but virtually unchanged since 2000, after adjusting
for inflation. The same measure, by comparison, rose about 20 percent in
Britain between 2000 and 2010 and 14 percent in the Netherlands. Median
income also rose 20 percent in Canada between 2000 and 2010, to the
equivalent of $18,700.
The most recent year in the LIS analysis is 2010. But other income
surveys, conducted by government agencies, suggest that since 2010 pay
in Canada has risen faster than pay in the United States and is now most
likely higher. Pay in several European countries has also risen faster
since 2010 than it has in the United States.
Three broad factors appear to be driving much of the weak income
performance in the United States. First, educational attainment in the
United States has risen far more slowly than in much of the
industrialized world over the last three decades, making it harder for
the American economy to maintain its share of highly skilled,
well-paying jobs.
Americans between the ages of 55 and 65 have literacy, numeracy and
technology skills that are above average relative to 55- to 65-year-olds
in rest of the industrialized world, according to a recent study by the
Organization for Economic Cooperation and Development, an international
group. Younger Americans, though, are not keeping pace: Those between 16
and 24 rank near the bottom among rich countries, well behind their
counterparts in Canada, Australia, Japan and Scandinavia and close to
those in Italy and Spain.
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.
Finally, governments in Canada and Western Europe take more aggressive
steps to raise the take-home pay of low- and middle-income households by
redistributing income.
Janet Gornick, the director of LIS, noted that inequality in so-called
market incomes which does not count taxes or government benefits is
high but not off the charts in the United States. Yet the American rich
pay lower taxes than the rich in many other places, and the United
States does not redistribute as much income to the poor as other
countries do. As a result, inequality in disposable income is sharply
higher in the United States than elsewhere.
Whatever the causes, the stagnation of income has left many Americans
dissatisfied with the state of the country. Only about 30 percent of
people believe the country is headed in the right direction, polls show.
Things are pretty flat, said Kathy Washburn, 59, of Mount Vernon,
Iowa, who earns $33,000 at an Ace Hardware store, where she has worked
for 23 years. You have mostly lower level and high and not a lot in
between. People need to start in between to work their way up.
Middle-class families in other countries are obviously not without
worries some common around the world and some specific to their
countries. In many parts of Europe, as in the United States, parents of
young children wonder how they will pay for college, and many believe
their parents enjoyed more rapidly rising living standards than they do.
In Canada, people complain about the costs of modern life, from college
to monthly phone and Internet bills. Unemployment is a concern almost
everywhere.
But both opinion surveys and interviews suggest that the public mood in
Canada and Northern Europe is less sour than in the United States today.
The crisis had no effect on our lives, Jonas Frojelin, 37, a Swedish
firefighter, said, referring to the global financial crisis that began
in 2007. He lives with his wife, Malin, a nurse, in a seaside town a
half-hour drive from Gothenburg, Swedens second-largest city.
They each have five weeks of vacation and comprehensive health benefits.
They benefited from almost three years of paid leave, between them,
after their children, now 3 and 6 years old, were born. Today, the
children attend a subsidized child-care center that costs about 3
percent of the Frojelins income.
Even with a large welfare state in Sweden, per capita G.D.P. there has
grown more quickly than in the United States over almost any extended
recent period a decade, 20 years, 30 years. Sharp increases in the
number of college graduates in Sweden, allowing for the growth of
high-skill jobs, has played an important role.
Elsewhere in Europe, economic growth has been slower in the last few
years than in the United States, as the Continent has struggled to
escape the financial crisis. But incomes for most families in Sweden and
several other Northern European countries have still outpaced those in
the United States, where much of the fruits of recent economic growth
have flowed into corporate profits or top incomes.
This pattern suggests that future data gathered by LIS are likely to
show similar trends to those through 2010.
There does not appear to be any other publicly available data that
allows for the comparisons that the LIS data makes possible. But two
other sources lead to broadly similar conclusions.
A Gallup survey conducted between 2006 and 2012 showed the United States
and Canada with nearly identical per capita median income (and
Scandinavia with higher income). And tax records collected by Thomas
Piketty and other economists suggest that the United States no longer
has the highest average income among the bottom 90 percent of earners.
One large European country where income has stagnated over the past 15
years is Germany, according to the LIS data. Policy makers in Germany
have taken a series of steps to hold down the cost of exports, including
restraining wage growth.
Even in Germany, though, the poor have fared better than in the United
States, where per capita income has declined between 2000 and 2010 at
the 40th percentile, as well as at the 30th, 20th, 10th and 5th.
More broadly, 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.
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 worlds most prosperous major economy.
http://www.nytimes.com/2014/04/23/upshot/the-american-middle-class-is-no-longer-the-worlds-richest.html?hp
============
The American Middle Class Is No Longer the Worlds Richest
============
Guess what country has surpassed the unites states of Apathy?
Surpassed it in 2010.
But really, in so many other ways, surpassed it back in 2003.
Oh Canada.
In a related story:
Number Of Middle Age Californians Living With Their Parents Soars
http://www.zerohedge.com/news/2014-04-22/welcome-recovery-and-your-parents-home-middle-age-californians-living-their-parents-
=====================================================
APRIL 22, 2014
The American middle class, long the most affluent in the world, has lost
that distinction.
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.
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 numbers, based on surveys conducted over the past 35 years, offer
some of the most detailed publicly available comparisons for different
income groups in different countries over time. They suggest that most
American families are paying a steep price for high and rising income
inequality.
Continue reading the main story
Related Coverage
Although economic growth in the United States continues to be as strong
as in many other countries, or stronger, a small percentage of American
households is fully benefiting from it. Median income in Canada pulled
into a tie with median United States income in 2010 and has most likely
surpassed it since then. Median incomes in Western European countries
still trail those in the United States, but the gap in several
including Britain, the Netherlands and Sweden is much smaller than it
was a decade ago.
In European countries hit hardest by recent financial crises, such as
Greece and Portugal, incomes have of course fallen sharply in recent
years.
The income data were compiled by LIS, a group that maintains the
Luxembourg Income Study Database. The numbers were analyzed by
researchers at LIS and by The Upshot, a New York Times website covering
policy and politics, and reviewed by outside academic economists.
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.
LIS counts after-tax cash income from salaries, interest and stock
dividends, among other sources, as well as direct government benefits
such as tax credits.
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 worlds
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.
The idea that the median American has so much more income than the
middle class in all other parts of the world is not true these days,
said Lawrence Katz, a Harvard economist who is not associated with LIS.
In 1960, we were massively richer than anyone else. In 1980, we were
richer. In the 1990s, we were still richer.
That is no longer the case, Professor Katz added.
Median per capita income was $18,700 in the United States in 2010 (which
translates to about $75,000 for a family of four after taxes), up 20
percent since 1980 but virtually unchanged since 2000, after adjusting
for inflation. The same measure, by comparison, rose about 20 percent in
Britain between 2000 and 2010 and 14 percent in the Netherlands. Median
income also rose 20 percent in Canada between 2000 and 2010, to the
equivalent of $18,700.
The most recent year in the LIS analysis is 2010. But other income
surveys, conducted by government agencies, suggest that since 2010 pay
in Canada has risen faster than pay in the United States and is now most
likely higher. Pay in several European countries has also risen faster
since 2010 than it has in the United States.
Three broad factors appear to be driving much of the weak income
performance in the United States. First, educational attainment in the
United States has risen far more slowly than in much of the
industrialized world over the last three decades, making it harder for
the American economy to maintain its share of highly skilled,
well-paying jobs.
Americans between the ages of 55 and 65 have literacy, numeracy and
technology skills that are above average relative to 55- to 65-year-olds
in rest of the industrialized world, according to a recent study by the
Organization for Economic Cooperation and Development, an international
group. Younger Americans, though, are not keeping pace: Those between 16
and 24 rank near the bottom among rich countries, well behind their
counterparts in Canada, Australia, Japan and Scandinavia and close to
those in Italy and Spain.
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.
Finally, governments in Canada and Western Europe take more aggressive
steps to raise the take-home pay of low- and middle-income households by
redistributing income.
Janet Gornick, the director of LIS, noted that inequality in so-called
market incomes which does not count taxes or government benefits is
high but not off the charts in the United States. Yet the American rich
pay lower taxes than the rich in many other places, and the United
States does not redistribute as much income to the poor as other
countries do. As a result, inequality in disposable income is sharply
higher in the United States than elsewhere.
Whatever the causes, the stagnation of income has left many Americans
dissatisfied with the state of the country. Only about 30 percent of
people believe the country is headed in the right direction, polls show.
Things are pretty flat, said Kathy Washburn, 59, of Mount Vernon,
Iowa, who earns $33,000 at an Ace Hardware store, where she has worked
for 23 years. You have mostly lower level and high and not a lot in
between. People need to start in between to work their way up.
Middle-class families in other countries are obviously not without
worries some common around the world and some specific to their
countries. In many parts of Europe, as in the United States, parents of
young children wonder how they will pay for college, and many believe
their parents enjoyed more rapidly rising living standards than they do.
In Canada, people complain about the costs of modern life, from college
to monthly phone and Internet bills. Unemployment is a concern almost
everywhere.
But both opinion surveys and interviews suggest that the public mood in
Canada and Northern Europe is less sour than in the United States today.
The crisis had no effect on our lives, Jonas Frojelin, 37, a Swedish
firefighter, said, referring to the global financial crisis that began
in 2007. He lives with his wife, Malin, a nurse, in a seaside town a
half-hour drive from Gothenburg, Swedens second-largest city.
They each have five weeks of vacation and comprehensive health benefits.
They benefited from almost three years of paid leave, between them,
after their children, now 3 and 6 years old, were born. Today, the
children attend a subsidized child-care center that costs about 3
percent of the Frojelins income.
Even with a large welfare state in Sweden, per capita G.D.P. there has
grown more quickly than in the United States over almost any extended
recent period a decade, 20 years, 30 years. Sharp increases in the
number of college graduates in Sweden, allowing for the growth of
high-skill jobs, has played an important role.
Elsewhere in Europe, economic growth has been slower in the last few
years than in the United States, as the Continent has struggled to
escape the financial crisis. But incomes for most families in Sweden and
several other Northern European countries have still outpaced those in
the United States, where much of the fruits of recent economic growth
have flowed into corporate profits or top incomes.
This pattern suggests that future data gathered by LIS are likely to
show similar trends to those through 2010.
There does not appear to be any other publicly available data that
allows for the comparisons that the LIS data makes possible. But two
other sources lead to broadly similar conclusions.
A Gallup survey conducted between 2006 and 2012 showed the United States
and Canada with nearly identical per capita median income (and
Scandinavia with higher income). And tax records collected by Thomas
Piketty and other economists suggest that the United States no longer
has the highest average income among the bottom 90 percent of earners.
One large European country where income has stagnated over the past 15
years is Germany, according to the LIS data. Policy makers in Germany
have taken a series of steps to hold down the cost of exports, including
restraining wage growth.
Even in Germany, though, the poor have fared better than in the United
States, where per capita income has declined between 2000 and 2010 at
the 40th percentile, as well as at the 30th, 20th, 10th and 5th.
More broadly, 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.
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 worlds most prosperous major economy.
http://www.nytimes.com/2014/04/23/upshot/the-american-middle-class-is-no-longer-the-worlds-richest.html?hp