How is it our National Economy is So Strong Yet Everyone’s Getting Poor? The Problem of Income Inequality’.
Right sided economists say the United States Economy is stronger than ever, while leftie politicians claim the economy is in terrible shape; the right wing politicians respond by saying American wages are continuing to climb as they have been and those on the left scream that right now incomes for average Americans are rapidly falling. So who’s right and who’s wrong here? Its simple, but not that simple.
Its true that the United States economy is strong, in fact its at one of one of its strongest points if not the strongest point in history. American wages on average have risen with economical growth, and those facts are undeniable.
So what’s up with those crybabies who say the economy is in bad shape, and why do they say the average American’s wages have been falling?
They’re correct; the American economy mirrors the economy right before we plunged into the Great Depression of the 1930’s. Most Americans have seen a significant drop in income over the last few years; for 90% of Americans making under the $104,000.00 that it takes to earning in the top 10% of all Americans, individual income has steadily fallen over 15% in the last three decades.
How can both sides be correct? What’s the deal?
The reason why: Income Distribution Inequality. Income Distribution is an often overlooked economic statistic that makes both sides be correct- if, that is, income distribution is terribly unequal. Income distribution is the statistic which calculates to what amount from the overall national income goes who and in what earning percentage; the wealthy, the middle class, or impoverished American workers. You may’ve heard it referred as of late as the income gap, and it’s the statistic being talked about when you hear about the spreading income gap between rich and poor.
Income Distribution Inequality refers to a phenomenon that’s been taking place over the last three decades in the U.S. While 90% of Americans have lost 15% in income over the past thirty years, the overall national income has been increasing drastically during that time. Who’s gaining from the increased national income? Only one group of Americans have benefited at all from that income growth; the wealthiest top 10% of all Americans. They made 15% in additional income over the last three decades.
So while on average incomes have risen in the U.S., the average worker’s income has not risen; its actually fallen. Although the U.S. is now making more in income per capita, adjusted for inflation, than at any other time in our history, all those billions and billions in higher profits have only gone to the wealthiest top 10% of all Americans. The wealthier the American, the more they’ve made over the last thirty years; take this shocker, for example of how much more those making the very highest incomes have made.
Since NAFTA and international free trade agreements started in earnest in 1994, they have indeed brought in higher rates of income nationally than ever before. But only 000.1% of all Americans, the very few wealthiest of us all, have made 427% of all the profits from NAFTA or free trade agreements; the rest of those profits were shared by the rest of Americans with incomes in the top 10%.
Out of those record profits which are generating more income for the U.S. than at any other time in our history, those Americans earning incomes below those in the top 10% haven’t got a penny. Zip. In fact those 90% of Americans have lost increasing amounts of income.
Think about it like this: The profits driving our national income up to its highest level ever are so great they make all American’s incomes overall rise, despite the loss of income for 90% of Americans who earn less than those in the top 10%
Those in the wealthiest 10% have earned that much more in additional income; it’s a staggeringly high amount, considering it offsets the 15% income loss 90% of Americans have experienced.
Now that is Income Distribution Inequality.
To summarize; overall the U.S. is making gobs more in income from advances in technology and international free trade than we’ve ever made before in our national history. Only one group has gotten all those profits, Americans making the highest 10% in income; everyone else in the 90% earning incomes below that- $104,000.00 to be precise- have lost income over the last three decades.
Don't take my word about those figures; check the National Bureau of Economic Research’s website and check on them for yourself if you need further proof.
Considering the last time Income Inequality was this great Americans plunged into the misery of the Great Depression ( except for those in the top 10% ), if you doubt my figures, it’s worth your time.
