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Thread: Chasm widens between rich and poor in U.S.

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    Chasm widens between rich and poor in U.S.

    Chasm widens between rich and poor in U.S.
    By David Cay Johnston
    Published: December 16, 2007

    NEW YORK: The increase in incomes of the top 1 percent of Americans from 2003 to 2005 exceeded the total income of the poorest 20 percent of Americans, data in a new report by the Congressional Budget Office show.

    The poorest fifth of households had total income of $383.4 billion in 2005, while just the increase in income for the top 1 percent came to $524.8 billion, a figure 37 percent higher.

    The total income of the top 1.1 million households was $1.8 trillion, or 18.1 percent of the total income of all Americans, up from 14.3 percent of all income in 2003. The total 2005 income of the 3 million individual Americans at the top was roughly equal to that of the bottom 166 million Americans, analysis of the report showed.

    The report is the latest to document the growing concentration of income at the top, a trend that President George W. Bush said last January had been under way for more than 25 years.

    Earlier reports, based on tax returns, showed that in 2005, the top 10 percent, top 1 percent and fractions of the top 1 percent enjoyed their greatest share of income since 1928 and 1929. MORE
    Are you concerned with this income disparity? There was no time in the U.S. history where this gap was higher than nowadays, and it is spread to all ethnic groups (incl. Germanics, which formerly enjoyed generally prospere conditions when the US was a country for them).

    I remember reading that Rockefeller, at the beginning of the XXth century, said that the highest salary (CEO, let's say) of a company should not be more than 12 times the lowest salary (janitor, f.e.). We are now incredibly far from this situation.

    It is also worth mentioning than the janitor's income, in 1900, was sufficient to provide everything a family with 3 children needed. For many reasons, this is absolutely impossible now except by accepting lower standard of living. Kind of sad, to me.
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    Quote Originally Posted by Kurtz View Post
    The report is the latest to document the growing concentration of income at the top, a trend that President George W. Bush said last January had been under way for more than 25 years.
    I wonder if it has anything to do with globalization & the liberalization of trade.:033102st:


    Quote Originally Posted by Kurtz View Post
    Are you concerned with this income disparity? There was no time in the U.S. history where this gap was higher than nowadays, and it is spread to all ethnic groups (incl. Germanics, which formerly enjoyed generally prospere conditions when the US was a country for them).

    I remember reading that Rockefeller, at the beginning of the XXth century, said that the highest salary (CEO, let's say) of a company should not be more than 12 times the lowest salary (janitor, f.e.). We are now incredibly far from this situation.

    It is also worth mentioning than the janitor's income, in 1900, was sufficient to provide everything a family with 3 children needed. For many reasons, this is absolutely impossible now except by accepting lower standard of living. Kind of sad, to me.
    About the only salaried class that has benefitted from the trends of the last 30-years have been among the managerial class that run the multinational corporations & the bankers (aka speculators or gamblers) who work on Wall Street. We currently have a system in place where most persons are wage & tax slaves.
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    The reason for this is because they are importing poor people from all over the planet.

    As to the janitors being able to support a family of 3 in 1900, part of that is because things that are now considered a 'necessity' were either nonexistent or a luxury in 1900 such as electricity, modern medicine, refrigerators, flush toilets, automobiles, post-secondary education, etc

    http://www.heritage.org/Research/Immigration/SR9.cfm

    The current influx of poorly educated immigrants is the result of two factors: first, a legal immigration system that favors kinship ties over skills and education; and second, a permissive attitude toward illegal immigration that has led to lax border enforcement and non-enforcement of the laws that prohibit the employment of illegal immigrants. In recent years, these factors have produced an inflow of some ten and a half million immigrants who lack a high school education. In terms of increased poverty and expanded government expenditure, this importation of poorly educated immigrants has had roughly the same effect as the addition of ten and a half million native-born high school drop-outs.

    As a result of this dramatic inflow of low-skill immigrants,

    *
    One-third of all immigrants live in families in which the head of the household lacks a high school edu*cation; and
    *
    First-generation immigrants and their families, who are one-sixth of the U.S. population, comprise one-fourth of all poor persons in the U.S.

    Immigration also plays a large role in child poverty:

    *
    Some 38 percent of immigrant children live in families headed by persons who lack a high school edu*cation;
    *
    Minor children of first-generation immigrants comprise 26 percent of poor children in the U.S.; and
    *
    One out of six poor children in the U.S. is the offspring of first-generation immigrant parents who lack a high school diploma.

    Hispanic immigrants (both legal and illegal) comprise half of all first-generation immigrants and their families. Pov*erty is especially prevalent among this group. Hispanic immigrants have particularly low levels of education; more than half live in families headed by persons who lack a high school diploma. Family formation is also weak among Hispanic immigrants; fully 42 percent of the children of Hispanic immigrants are born out of wedlock. Hispanic immigrants thus make up a disproportionate share of the nation’s poor:

    *
    First-generation Hispanic immigrants and their families now comprise 9 percent of the U.S. population but 17 percent of all poor persons in the U.S.; and
    *
    Children in Hispanic immigrant families now comprise 11.7 percent of all children in the U.S. but 22 percent of all poor children in the U.S.
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    Quote Originally Posted by SwordOfTheVistula View Post
    As to the janitors being able to support a family of 3 in 1900, part of that is because things that are now considered a 'necessity' were either nonexistent or a luxury in 1900 such as electricity, modern medicine, refrigerators, flush toilets, automobiles, post-secondary education, etc
    That's a partial explanation. There are other factors, the first that comes to mind is the arrival of women in the workforce.

    Even families that remain intact are learning a cold economic lesson: the second salary that was once something between a political statement and a rainy-day fund is becoming increasingly necessary. In a devil’s bargain, women have sacrificed their freedom and domestic satisfaction while median household income has remained unchanged in constant dollars since 1970. As Elizabeth Warren and Amelia Warren Tyagi reveal in The Two-Income Trap, “once they have paid the mortgage, the car payments, the taxes, the health-insurance, and the day-care bills, today’s dual-income families have less discretionary income … than the single income family of a generation ago. … Mothers now work two jobs, at home and at the office. And yet they have less cash on hand.”

    ...

    Critics contend that the phenomenon is confined to a small group of affluent white women, which doesn’t reverse the trend line but does reveal a poignant truth. If those who can afford it want to stay home with their children, those who cannot afford it likely do as well—and they no longer have the choice their mothers did. Warren and Tyagi write, When millions of mothers entered the workforce, they ratcheted up the price of a middle-class life for everyone, including families that wanted to keep Mom at home. A generation ago, a single bread-winner who worked diligently and spent carefully could assure his family a comfortable position in the middle class. But the frenzied bidding wars, fueled by families with two incomes, changed the game for single-income families as well, pushing them down the economic ladder.
    Link to the text (very interesting)
    "The heavenly motions... are nothing but a continuous song for several voices, perceived not by the ear but by the intellect,
    a figured music which sets landmarks
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    Quote Originally Posted by Kurtz View Post
    That's a partial explanation. There are other factors, the first that comes to mind is the arrival of women in the workforce.



    Link to the text (very interesting)
    I feel the need to point out that women have always been part of the workforce in the lower classes. Washerwoman, maids, seamstresses, weavers, brewers, and any number of cottage industries were perfectly respectable and often nessasary for the families sucess. I find the rise of WAHM (work at home moms) with cottage industry to be a wonderful thing. Although my husband is not rich we can certainly afford for me not to work. We just have made consious (sometimes difficult) choices about out family and priorities.

    I agree that the change in the workforce over the last 60 years has caused many problems but it is not just women working. The change in the social dynamics of corparations and the economy are part of larger trends.
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    Quote Originally Posted by Kurtz View Post
    That's a partial explanation. There are other factors, the first that comes to mind is the arrival of women in the workforce.



    Link to the text (very interesting)
    Interesting article. I think though that women in the workforce today is more a result of than a cause of changing economic conditions, in particular rising house costs, and to a lesser but still significant extent college education and health care costs.
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