2 simple charts showing income shift from 1979 to 2007.

[grahamhgreen]

" Recent data from the Congressional Budget Office (CBO) show a stunning shift in income away from the middle class and towards the highest-income people in the country over the last three decades:

* In 1979, the middle fifth of Americans took home 16.5 percent of the nation’s total after-tax income. By 2007, after several decades of stagnant incomes in the middle and surging incomes at the top, the middle fifth’s share had dropped to 14.1 percent. Over the same period, the top 1 percent’s share more than doubled, from 7.5 percent of total after-tax income to 17.1 percent (see graph below). So by 2007, the top 1 percent had a bigger slice of the national income pie than the middle 20 percent."


From: http://www.offthechartsblog.org/inequality-and-the-high-end-bush-tax-cuts/


MAKE OUTSOURCING ILLEGAL, please

[inna]

1. Holy shit. The first one is nothing short of startling. And this is CBO??

K&R, needless to say.

[Hannah Bell]

2. not just outsourcing: a large part is directly due to tax policy.

[grahamhgreen]

12. Agreed. nt

[Lasher]

3. Good graphics of a disgusting reality.

Thank you Saint Ronnie and disciples.

[elocs]

10. Yes, the graphs are very readable unlike many that I see here.

Often I cannot make out charts and graphs that are posted but these are very clear.

[Kablooie]

4. Oh, but won't the top 1% all create zillions of jobs with all that cash?

Since there are fewer jobs than anytime since the 1930's, I'll take a wild guess and speculate that the answer is no.

[Sherman A1]

5. Yup!

or maybe they were just too busy to do so....:banghead:

[mrcheerful]

6. Tell me abut it my city went from having 3 GM foundries and 4 GM parts factories in 1979

to 1 foundry and Delphi has 3 parts factories, the foundry I'm not sure about as I haven't driven past it since 1990 and I stopped watching news in 2000 when I got fed up with 2000 election. What really was sad was one of the foundries had made tanks in WWI as well as WWII where my aunt worked as a Rosie riveter, she made wields on the tanks armour plating, she passed in 2002 so she never saw the factory closed.

[tiredtoo]

30. What part of Saginaw are you from ?

I retired out of one of the closed foundries. Delphi is now Nexteer and owned by China. I am going to forward these charts to some right wingers that are always forwarding stuff to me. Also linked it to my facebook page.

[mrcheerful]

32. I grew up in Bridgeport, then bounced around the city after 75 then in 79

I moved to Dallas after a year down there I came back, bounced around from one side of the city to the other, met a woman moved to Grand Rapids then 2 years ago mom wasn't doing to good so I moved back only to lose my dad, a retired Saginaw Steering Gear worker, to cancer and finally settled down on the north west side of the city.

[mrcheerful]

57. Btw, I drove past the Chevy parts plant on Genesee st about a month ago and was shocked to see that

to had been closed and the lot is already starting to have grass and weeds growing in the cracks. It had a for sale sign on the front gate, I'm really angry that I don't own a camera nor can I afford film as the city is really changed from what it was when I was a youngster, I remember that we used to be the 3rd biggest city with flint as second biggest in the state, Reagan and Engler sure left their mark on Michigan.

[Winterblues]

63. If your answer is no it means they are not saying it enough

Expect an increase in how often you hear "You can't raise taxes in the middle of a Recession" they say it as if it were factually correct.. Clinton proved the exact opposite. When they stood up on the Floor of the House and made those exact same statements, trying to kill Clinton's first Budget, they said them in the same way as if they were factual. Clinton's Budget did pass thanks to Al Gore who cast the tie-breaking vote and America went on to experience "The Greatest Economic Expansion in History"

[iamjoy]

7. No Wonder Our Economy Is Crap

I have long said that we can't really blame all of our current economic woes on George W Bush because it is the result of economic policies over the past 30 years (starting with Ronald Reagan, but Bill Clinton is not blameless)

I don't know if the answer is making outsourcing illegal.

[FredStembottom]

50. Bill Clinton is much more than "not blameless"....

he pulled the trigger. Fought for and passed the economic policies of a tiny (at that time)set of radical right elites.
Why????????????

[daleanime]

8. Bookmarked for later use.

:grr:

[Silver Gaia]

9. Same here. K & R

Thanks for the post.

[Bosso 63]

11. It takes time to trickle down.

Lets give it another 30 years before we make any rash judgments.
Then, if it still isn't working, we move to Plan B:
Learn how to fight off seagulls and rats while scavenging the dump.
In the meantime, it might be a good idea to get hepatitis vaccinations up to date.

[grahamhgreen]

18. !

:spray:

[populistdriven]

22. DO YOU WANT LUNCH?!?

www.youtube.com/watch?v=XU1wk2HWtwA

[Canuckistanian]

13. Wow, that's to say the least - UNSUSTAINABLE

If the trend continues.... well, I don't know WHAT would happen. Armed revolution come to mind.

[w8liftinglady]

14. wow..this will be useful in my rebuttal to the local politico

who wants to cut benefits and pay to the lowest of the workers to save the budget downfall...

[Catshrink]

15. Too bad the 'baggers don't understand graphs like this.

[HughBeaumont]

16. Couple more charts on wage stagnation and inequality:

http://journals.democraticunderground.com/HughBeaumont/86

[grahamhgreen]

17. This one you posted showing the stagnation of wages is particularly insightful:

Or, as you say, "Wowzers. Talk about Flatliners. Here are some more sobering stats for production and non-supervisory workers (mind you, all figures are in 2005 dollars):"

[TheKentuckian]

46. Imagine the absolutely pathetic numbers we can add from 2005-present

Little doubt we are now trending downward instead of the appalling flatline of the salad days of the last thirty years.

The now years of net negative job creation makes matters even worse.

[desertrat777]

19. Now We Know Who's Stealing Our Money

These charts present in a usable format something that we have known or suspected all along. They are a crystal clear message that we can share with others. One thing that really hit me is how these charts show that the upper one percent can--and should--pay a higher share of taxes. And then, this clearly shows that the "trickle down" theory doesn't work. In fact, it is just a scam to steal more money. Yeah, right--give us all your money and "we'll take care of you." What a bunch of malarkey.

[snot]

20. And I believe the gap's gotten much worse during the last 2 years.

[hfojvt]

21. I still like my pie charts

http://www.koch2congress.com/5.html

[grahamhgreen]

41. Is that you?

Actually running for office?

If it is my hats off to you!

Thank you.

[hfojvt]

58. it is

but alas, I was defeated in the primary by 9,944 to 8,023 for me, and 4,536 for the $100,000 man who does not even live in the district and did not bother to campaign after filing and 708 people who went to the polls but did not vote in my race (at least they admitted that they didn't know anything about the candidates).

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=153x9552

[BlueCheese]

59. Still, kudos.

It takes a lot of determination to run. Better luck next time, if you choose to run again.

[hfojvt]

60. it takes something

First, I sat in the Secretary of State's office for about ten minutes trying to work up the nerve to lay the $1,760 down. To me, that is a lot of money. Would I regret spending it? Would I be humiliated at the polls?

Then there was campaigning. How to do that? I had a plan to drive all over the district, going to events, talking to Chambers of Commerce, and city and county officials and business people.

As it turns out, that was a lot of work and not an effective strategy. In the last week, I spent $700 on newspaper ads in five cities - Topeka, Lawrence, Leavenworth, Pittsburg, and Manhattan. Again, that seemed to be ineffective.

Here's an example of one weekend. I worked until 3 in the morning, then got up at 7:30 a.m. to drive to Lawrence to drop off literature and then to Topeka for a coffee meeting and then to Manhattan for the Riley County fair and then stopped in Wamego on the way back home. As it turned out, nobody was at the Democratic booth at the fair, although the Tea Party and Republican booths were staffed.

Actually, if our party was not in such disarray, my candidacy would have been even more of a suicide mission. The party would have a hand picked candidate like Stephene Moore or Raj Goyle or State Senator Laura Kelly and I would have been lucky to pull 10% of the vote instead of the equivalent 45% that I got.

[Quantess]

23. Thanks. Visuals like these are helpful.

[BumRushDaShow]

24. This plus too many useless wars and Wall St. bailouts

= $13.4 trillion debt and a $1.3 trillion deficit. :banghead:

And the rethuglicans truly believe that people will come clamoring back to them for more of the same. And sadly they probably will, thanks to the RW fascist control of the media.

[Kermitt Gribble]

25. Wow! Can't get more obvious than that.

From the CBO, even! These charts are extremely important - we need to show them to everyone we can.

Thanks grahamhgreen!

K&R

[Fearless]

26. About outsourcing there is something Democratic that we can do...

The reason that outsourcing works is because it is profitable. As anyone in business can tell you, morals mean little and money talks. So long as outsourcing is profitable, it's going to happen. And there is no changing that. However we can make it unprofitable with two actions, one simple and one difficult. Everyone needs to buy US made goods. No exceptions. That includes cars. That includes food. That includes clothing. That includes technology. It starts with single people. But if awareness of products that are made in the US can be made widely available, it will transcend political lines. And second, we need to support unionization and human right's causes worldwide, particularly in China, Malaysia, and India. We can undermine production costs and therefore make it more profitable to make goods at home. Capitalism will do the rest.

To those who say it isn't possible, I can only ask, what's the harm of trying?

[grahamhgreen]

31. One thing we can do

is simply increase tariffs on Chinese and foreign goods.

As it stands now, we are not the true beneficiaries of the cheap Chinese goods - the wealthiest 1% is.

What good is it to have a shirt cost half as much if you're out of work?

I like your ideas as well, OR, as "Beartracks" put it:

"One could argue that companies outsource jobs overseas because it has a positive impact on their bottom line, which allows them to grow and create jobs, which they will... outsource overseas because... it has a positive impact on their bottom line... which allows them to grow... create jobs... outsource... grow... jobs... outsource..."

[Fearless]

36. Well I mean we could...

But with corporate interest in politics, I just don't see it happening.

[alfredo]

27. And the Tea Party thinks government is the problem.

They are partially true. After 1979 Reaganomics infested the US.

[BlueCheese]

28. To be clear...

The first chart is saying if we take the pie from 2007 and divide it the way it was divided in 1979, then the top 1% would take home $740K than they do now. The middle fifth would be $9,400 better off.

What this doesn't make clear is whether the middle fifth is actually better or worse off now than in 1979. The average income for the middle fifth is certainly not $9,400 less than it was in 1979. After all, the 2007 pie is quite a bit bigger than the 1979 pie. (Or, as Bush said, the pie is "higher".)

What the charts do show is that income inequality has grown a lot in the last 30 years, especially with regard to the top 1%. This is certainly not a good thing either. But I worry less about income inequality than about stagnant incomes in general, which seems to be the real problem.

[Alcibiades]

29. The inequality generates stagnation

A healthy economy, one in which most people's incomes grow, also has less inequality. In fact, equality causes income growth. Middle America takes their money and spends it: rich America spends it on champagne, travel abroad and cocaine.

[Kurt_and_Hunter]

33. You question boils down to inflation and population

Essentially, how large is the pie adjusted for inflation vs. 1979.

And how many people is it being divided to feed?

It seems likely to me that the pie is smaller in relative terms because the period 1980-2010 is famous for 1) a drop-off in real wages and 2) tame inflation.

But as you say, the chart itself doesn't specify.

One could argue that everyone is better off because an ipod is better than transistor radio, etc.. No real way to quantify that, I guess.

[hay rick]

34. The pie is higher

than it was in 1979, but probably lower than it was in 1999, which seems to be the approximate inflection point for median household income.

The problem now isn't stagnant incomes, it's declining incomes. One of the effects of increasing income inequality is that GDP growth, especially the anemic growth seen of late, no longer translates into rising or even stable incomes for the MAJORITY of the population.

[grahamhgreen]

35. The school of thought I subscribe to is that Demand drives the economy...

When people have no money - there is no demand for goods.

What we see now is that the demand for shady investment instruments that "guarantee" profit is way up - because this is what people buy when all they have is excess money that they want to see become even more money.

They don't really want to buy or invest in anything unless it guarantees a return.

In the old days, the ultra-rich were happy with bonds, now they want what Bernie Maddof and Goldman-Sachs are peddling - convoluted houses of cards with no inherent value.

Thus we have no real underlying economy based on added value, such as what happens when you carve a stick into a pick handle - you can sell it for more money.

That, combined with the fact that workers are no producing goods domestically, which means they do not have jobs, which means they can not purchase anything.

As well as the fact that the ultra-rich are not being taxed their fair share.

Outsourcing + tax breaks for the ultra-rich + monopolies + de-regulation + "free" trade = bad US economy


We need to get the cash back in the workers hands because they are the ones who spend it on real goods, services, housing and other items that actually are the economy. Which means we need to bring the jobs back home. Which means we need to get out of the greed trade agreements, and increase tariffs on foreign goods, IMHO.


PS - the graph is done in 2005 dollars, which means that the average income for the middle fifth IS $9,400 less than it was in 1979, I believe.

[hay rick]

44. What the graph means.

From the article: "If the distribution of after-tax incomes had remained unchanged between 1979 and 2007, the after-tax income of the average family in the middle would have been $9,000 (16 percent) higher in 2007 than it actually was. Instead of an income of $55,300, this typical family would have had $64,700."

Median family (or its' proxy, household income) has not declined since 1979, it just hasn't risen as much as it would have if income distribution had remained unchanged. Median family incomes have, however, declined from their 1999 levels by about $2,000.

It is what it feels like.

[AwakeAtLast]

37. Proud to be rec #100

Shocking numbers!

[Tx4obama]

38. Here's another simple chart

[grahamhgreen]

40. +1

Clear and concise.

Thanks!

[Tx4obama]

43. And here's the BIKINI graph regarding JOB LOSS in case you don't have it already

[4dsc]

39. 30 years of failed conservative economic policies

Hammer it home folks because things are not going to change. Trickle down my ass.

[jmowreader]

42. I have a very important, but simple, question

How much of that is actually money?

Remember, the years between 1979 and 2007 were the era of derivatives. I'm not defending the rich--they pay far too little tax, for one thing, and the "job-creating tax cuts" they got quite often were used to buy Drexel Junk, whose primary function was to kill jobs via leveraged buyouts and hostile takeovers--but I don't think the numbers posted above are really all that accurate. Let's face it: the only difference between most derivatives and most Monopoly money is derivatives are on bigger paper.

[hay rick]

47. How much of it is actually money? All of it.

The numbers were crunched from IRS tax data by the CBO.

Yes it's real and yes, it's that bad.

[jmowreader]

48. You pay taxes on derivatives too

The scary thing is, depending on whether you do book-value or market-value accounting on derivatives, it could be worse than you see there.

[TheKentuckian]

49. You're close to a major point. They are perversely creating wealth without creating any value

Complete capital potential theft from the system.

Wealth is now separated from not only work but also now from investment which makes a zombie economy. The proceeds from these schemes are plunder from the rest of us extracted without benefit or purpose.

[Rosa Luxemburg]

45. We need to bombard TV with ads to show the unsuspecting voters

[Mimosa]

51. We are being driven into serfdom, but not as conservatives believe.

Graham Greene, thanks for the figures and the graphs. :)

I've been aware of the figures for a long time. Sickening, worrisome...

[Mnpaul]

52. They redistributed all the wealth to the top

and gave them a tax cut. Everyone elses wages were driven down. And they can't figure out why allthe local governments are going broke?

[grahamhgreen]

62. And why everyone is pissed off! nt

[DemocraticPilgrim]

53. Reaganomics did its thing, sadly.

[Radical Activist]

54. That says it all.

Good post.

[BobTheSubgenius]

55. There's one obvious answer to this.

More upper-income tax breaks.

Yeah.

[sabrina 1]

56. The only way to start changing this is to tax the rich.

Cut taxes for the middle class and let the Bush tax cuts for the rich die a well-deserved death.

It looks like this shift in income began with Reagan.

[Mimosa]

61. ^ 1000+ ^ n/t

[moondust]

64. Somebody call the Bolsheviks!