Article 43

 

Wednesday, August 07, 2013

How Much Do Americans Earn

How The Other Half Lives And Examining Income Growth And Median Income For US Households In 2013.

By mybudget360
July 9, 2013

How much do Americans earn?  Such an important and pivotal question is rarely examined in the mainstream press.  It almost appears to be a forbidden topic of discussion.  You would think that this question would warrant deeper examination given that income is the driving force of our CONSUMER HUNGRY ECONOMY.  Yet many people are driven to spend money the’y dont have regardless of income because of the BOOMING DEBT MARKET.  Household income growth is the critical issue when it comes to maintaining a vibrant middle class.  You rarely get a straight answer when it comes to income growth because talking about incomes is taboo and actually is offensive in real life.  Try asking someone how much they make at a party and find out how quickly unpopular you will become.  Yet the data is frigid and cold but tells us many things about our economy.  What Americans earn sheds a deeper perspective as to how well households are doing in the current economy.  So how much do Americans earn at this stage in this so-called economic recovery?

US Household Income

US Household Income

The best breakdown of income is from the US Census ACS data that breaks down household gross incomes.  The above chart is fairly clear.  The median household income in the US is $50,500 based on the latest data.  Given that this is the perfect splitting point of 114 million households, you get a better idea of how the other half is living here.

What is fascinating when we dig into Social Security records is that the average per capita wage is $26,000 so this lines up nicely with the predominant two-income household trend we have been seeing over the last few decades.  What I find intriguing however is that most regular television ads seem to cater to the idea that every family is making more than $100,000.  If you look above, only about 20 percent of all US households make that much.  This is why we are in the massive debt problem that we currently have.  We as a nation and at a family level are spending way beyond our means simply by going into massive debt.

Looking at the income distribution in another light might be helpful:

US Income Distribution 2013

This is the answer.  While incomes are stuck, debt has massively expanded.  The total debt market is now over 3 times the size of our annual GDP.  Since the crisis hit in 2007, households have been in a process of deleveraging but thanks to low rates, Wall Street and large financial institutions are back to speculating in the markets and injecting tons of digitally printed money back into the economy.  Yet as we have seen with household income data, very little has trickled down to regular families and most of the gains remained at the top.

How much do Americans earn?  The numbers are rather clear.  The typical US household makes $50,500.  With even our modest headline inflation number (of course the CPI understates other items like college debt and home prices) this is problematic because wages are simply not growing.  The above income figures reflect a primary reason why most Americans dont feel this as a recovery.

Looked at from a different perspective, we realize how rare it is for households to make more than $100,000.  I always find it fascinating when you have pundits come on TV and act as if $150,000 is middle class.  Look at the raw data.  Unless the definition of middle has changed, the middle is now $50,000.  Instead of arguing that $150,000 is little, they should be discussing why income growth for most of the country has gone cold in the midst of a recovery.  Also, we have over 47 million Americans on food stamps.  These are the families at the other side of the income chart.

Real Income Growth

So what has happened to income growth over the last decade?

US

The real median US household income is now down to levels last seen in 1995.  For most people, income growth has been virtually non-existent.  In real terms, most families are in a financially tougher position than they were in the mid-1990s.

The peak above is somewhat deceptive however.  In 2007, the peak was reached by a massive debt induced bubble and many tied to this bubble where making inflated wages (similar to the tech boom where simply putting up a website nearly entitled some to million dollar paydays).

Inflation is a sinister beast when it comes to income growth.  If inflation is outpacing wage growth, we get what we are seeing in the charts above.  Your purchasing power erodes and then people wonder why it costs so much to go to college, buy a car, or even a home.

When we adjust for inflation, we see that real income growth only occurred for a small portion of families:

US Real Income 2013

Over the last couple of decades, you would have to be in the top quintile of household incomes to see some true growth.  The top five percent have done exceptionally well but that is only a tiny portion of our country.

Yet if you look at the other 80 percent of households, income growth has flat-lined.

If we break up income growth by age brackets, we also see that younger Americans have taken it particularly hard:

US Real Median Income 2013

Source:  Dshort

What the above chart doesnt reflect is the amount of debt that is saddled on young Americans since the cost of going to college since 2000 has gone on a ridiculous bender.  From 2000 to the present, total student debt went from $200 billion to over $1 trillion becoming the second largest consumer debt market only behind mortgage debt.

Economy and Income

So you might be asking how can Americans spend at these levels if incomes are back to 1995 levels:

US Debt ad GDP 2013

This is the answer.  While incomes are stuck, debt has massively expanded.  The total debt market is now over 3 times the size of our annual GDP.  Since the crisis hit in 2007, households have been in a process of deleveraging but thanks to low rates, Wall Street and large financial institutions are back to speculating in the markets and injecting tons of digitally printed money back into the economy.  Yet as we have seen with household income data, very little has trickled down to regular families and most of the gains remained at the top.

How much do Americans earn?  The numbers are rather clear.  The typical US household makes $50,500.  With even our modest headline inflation number (of course the CPI understates other items like college debt and home prices) this is problematic because wages are simply not growing.  The above income figures reflect a primary reason why most Americans dont feel this as a recovery.

SOURCE

---

walmart-wendys-costco.jpg

Worker Wages: Wendy’s vs. Wal-Mart vs. Costco

By Jane Fox
CNN
August 7, 2013

Can a company pay its workers well and also make money?

Many aren’t quite hitting the right balance. Hundreds of DISSATISFIED WORKERS at major American companies like WALMART (WMT), McDonald’s (MCD) and Wendy’s (WEN) have joined protests nationwide in the past year demanding higher wages and better benefits.

One company that hasn’t had to deal with such strikes is COSTCO (COST).

The no-frills warehouse chain pays its hourly workers an average of just over $20 an hour, compared to just under $13 at competitor Wal-Mart. Even President Obama praised COSTCO in a recent speech about helping the middle class.

The recession has been good for companies that targeted budget-minded customers. Sales at Costco have grown an average of 13% annually since 2009, while profits have risen 15%. Its stock price has more than doubled since 2009.

During the same period, discount retailer Wal-Mart’s sales grew an average of 4.5% each year, profits rose 7%, and its stock price increased 70%.

Costco seems to be investing some of those profits back into its employees.

Cesar Martinez, a 37-year-old fork lift operator, has worked at a Costco in North Carolina for 19 years. He makes $22.82 an hour, gets health benefits and a pension plan. He manages to save, and doesn’t worry about hospital bills for his daughter, who suffers from asthma.

“That’s the reason why I’ve been here for so long,” he said. “The company gives you a decent wage and treats you with respect and takes care of you. That’s why we all give 100%.”

Some experts say companies aren’t able to adopt the Costco model, because they can’t charge its $55 annual membership fee.

However, research shows that it pays to pay employees well, because SATISFIED WORKERS are more productive and motivated, according to MIT Sloan School of Management professor Zeynep Ton, who focuses on operations management.

“How many times have you gone to a store, and the shelves are empty or the checkout line is too long, or employees are rude?,” she said. “At Costco, you see a huge line that disappears in minutes.”

The productivity translates into sales, she said.

According to Ton’s research, sales per employee at Costco were almost double those at Sam’s Club, its direct warehouse competitor owned by Wal-Mart.

Workers who are dissatisfied with pay are joining picket lines. Last week, fast food workers in seven cities from chains like McDonald’s, Wendy’s and Yum (YUM) Brands-owned KFC, protested for higher wages of $15 an hour. It’s a demand they’ve been making since last November.

It’s been spreading—from hundreds of Amazon warehouse workers in Germany to Wal-Mart workers walking off work, all calling for better pay, fair schedules and affordable health care.

The median pay for FAST FOOD WORKERS nationwide is $9.05 an hour, or about $18,800 a year.

“While the fast food and retail industry is making record profits, ITS WORKERS are forced to rely on public assistance just to afford the basics,” according to Fast Food Forward, a union- and community group-backed organization behind some of the protests.

Hat tip: Eduardo

SOURCE

Posted by Elvis on 08/07/13 •
Section Dying America
View (0) comment(s) or add a new one
Printable viewLink to this article
Home
Page 1 of 1 pages

Statistics

Total page hits 9264520
Page rendered in 0.7683 seconds
40 queries executed
Debug mode is off
Total Entries: 3171
Total Comments: 337
Most Recent Entry: 06/13/2019 07:38 am
Most Recent Comment on: 01/02/2016 09:13 pm
Total Logged in members: 0
Total guests: 5
Total anonymous users: 0
The most visitors ever was 114 on 10/26/2017 04:23 am


Email Us

Home

Members:
Login | Register
Resumes | Members

In memory of the layed off workers of AT&T

Today's Diversion

A State divided into a small number of rich and a large number of poor will always develop a governmet manipulated by the rick to protect the amenities represented by their property. - Harold Laski

Search


Advanced Search

Sections

Calendar

August 2013
S M T W T F S
       1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30 31

Must Read

Most recent entries

RSS Feeds

Today's News

ARS Technica

External Links

Elvis Picks

BLS Pages

Favorites

All Posts

Archives

RSS


Creative Commons License


Support Bloggers' Rights