WHAT I'M READING: THE STATE OF WORKING AMERICA 2004-05
Yes, I'm finally getting around to reading SWA, roughly a month after it's preliminary release. Well, I shouldn't say I'm reading it so much as digesting its rich multitude of tables and charts of easily digested economic facts. It's not a book that most people will read cover to cover--just look through for what you need to know, and then maybe read some of the adjacent text for context. (Much of the data detailed in SWA is available for free download here).
Here are some of the gems I pulled out:
Class structure in the US is pretty rigid and growing more so by the day. So, of those in the richest quintile (top 20%) in 1969, 49% still were in 1979. But those starting off in the richest quintile in 1989 were more likely to stay there by 1998 (53%). This is good news if you are really rich, and bad news if you are poor. While 51% escaped the bottom rung of the income distribution in the 1970s, only 47% were able to in the go-go 1990s.
How did this happen? It turns out that a greater share of taxes people pay are now regressive--that is, they cost more to poor people than to rich people as a share of income. Bush's tax cuts really helped along this trend: the 80th percentile of households (that is the household where income is higher than 80% of the population and less than 19%), with an annual income of $96,600 received a whopping $967 tax cut from Bush. All those people under the 80th percentile got even less. But hey, if you were in the richest one percent (where 99% of people have lower incomes) you got a nice check from the IRS for $66,600. This only accounts for income taxes, not other changes in the tax code including the repeal of the estate tax.
Of those poorest 80%, 77% of their income is earned through wages and salaries from working. The richest 1% get 58% of their incomes from investments and 42% from salaries--hey, they are still the bosses and can pay themselves big salaries, too). Think stock ownership is more egalitarian these days with the rise of dot-com stock options? Wrong. Individuals with incomes over $100,000 own 79% of all stocks. The concentration of ownership is increasing. (Note that now we are discussing individuals as opposed to households--the household figure is standardized for two adult workers such that the 80th percentile household discussed above represents a combined income of $96,600 whereas this figure is for individual incomes > $100,000.
Meanwhile, many Americans are getting poorer. 87 million people, some 31% of Americans no live on incomes below twice the poverty line (roughly 2 x $14,000 for a family of four).
What can I say, it's George Bush's America.