Celebrate $100,000 Average
Annual Income Nationwide
The nation has crossed an important milestone recently, the average income for workers is $100,000 per year. The Bureau of Economic Analysis announced on July 31, 2008, that the GDP for the nation is $14.2 trillion.
“Current-dollar GDP -- the market value of the nation's output of goods and services -- increased 3.0 percent, or $105.7 billion, in the second quarter to a level of $14,256.5 billion.”
While the workforce is 153 million, after subtracting those who are unemployed or discouraged from looking from work (5.7% and 2.4%, 8.1% together, or 12.4 million workers) the number who actually contribute their labor each day is 141 million workers. Obviously, dividing the dollar sum by the number of workers yields the average contribution per worker, over $100,000.
This is an achievement that deserves nationwide, and even worldwide, celebration. Every worker who contributes his or her mite or iota or midge of effort should feel proud. It is a huge, colossal achievement. Everyone should take it upon themselves to have a huge hot dog, a beer or soda, and a slice of pie. Take a bow! And, it should be said, “May God continue to bestow His blessing on this nation.”
Unfortunately this colossal event is stained by the reality of the median income that still languishes in the trough below $33,000 a year. The median is often called the “typical” and it is the point where half earn less and half earn more. That the median should be one third of the average should be a point of concern for all who retain a sense of American justice and equality.
Inequality has been plaguing our economy. For example, in the past 24 years 80% of American families have seen their incomes increase 9% on average while the top 20%’s income went up 49% and the top one percent’s incomes increased by 111%. (State of Working America, 2006/2007, page 64)
The current annual income of the top one percent of households exceeds the incomes of 60% of U.S. households, and the top one percent also own more than 91% of the American households. (See inequality.org/bythenumbers and Federal Reserve report, Currents and Undercurrents, 2006) And to put it in sharper perspective, some 28% of American workers, 2 out of 7, are either working for poverty wages (16.4%) or are out of work (5.7%) or can’t find full-time work or are discouraged from looking for work (6.1%).(See njfac.org/unemployment) This is enough to rain on our parade. The median family income for one-earner families has risen by 0.4%, from $42,049 to $42,221 in all of 31 years.(See SWA, page 55)
Such poorly distributed income and wealth is not just grossly unfair, it is dangerous to the nation’s economic health. Widespread and fairly distributed income is essential to a flourishing economy. The Chairman of the Federal Reserve during the FDR years was Marriner Eccles, and he explained the cause of the Great Depression in these words:
As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth -- not of existing wealth, but of wealth as it is currently produced -- to provide men with buying power equal to the amount of goods and services offered by the nation's economic machinery.
Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth. This served them as capital accumulations.
But by taking purchasing power out of the hands of mass consumers, the savers denied to themselves the kind of effective demand for their products that would justify a reinvestment of their capital accumulations in new plants.
In consequence, as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.
(Beckoning Horizons, by Marriner Eccles, 1951)
As Congress considers a second round of stimulus checks, to stimulate the weak consumer purchasing power we now have, we all as a nation should also consider policies that will lift the incomes of the lower 60% of workers whose labor earns them only 20.3% of the national income.
Celebrate what you can. Peace.
See these sources: toomuch.org, sharedprosperity.org, inequality.org, njfac.org, and extremeinequality.org.
more at http://benL8.blogspot.com, see What Government Can Do,
at this blog May,2008