Monday, September 23, 2013

Last week, Eduardo Porter of the New York Times wrote this column about how hard it is to become - or remain - middle class in this country. The article is illustrated by those graphs in the screenshot. One statistic Porter calls staggering is that "the typical household made $51,017, roughly the same as the typical household made a quarter of a century ago." Sure, according to the graph, the median household income had ticked up above that during the late 1990s and early 2000s, but the trend has been down again since the 2008 financial crisis. Equally, shocking, we still have approximately 15% of our population living below the poverty line, a number that has been increasing over the last five years.

The surface explanation is also in those charts: the richest quintile has increased its share of income to 49.9 percent of total income, from 42.1 percent starting back in 1967. According to this article, in terms of net worth, the top one percent owns 34.6% of the wealth, and the next 19% owns 50.5%. The bottom 80% owns 15% of the wealth. That makes the middle mighty small.

And that fact has had some repercussions. In 2012 Porter gathered some statistics about social well-being here.
It is not just that income inequality is the most acute of any industrialized country. More American children die before reaching age 19 than in any other rich country in the O.E.C.D. More live in poverty. Many more are obese. When they reach their teenage years, American girls are much more likely to become pregnant and have babies than teenagers anywhere else in the industrial world.
We understand the importance of early childhood development. Yet our public spending on early childhood is the most meager among advanced nations. We value education. Yet our rate of enrolling 3- to 5-year-olds in preschool programs is among the lowest among advanced nations. Our 15-year-olds place 26th out of 38 countries on international tests of mathematical literacy, according to the O.E.C.D. The first nation to understand the value of widespread college education, the United States has dropped from the top to the middle of the pack of our economically advanced peers in terms of college graduation rates.  
Porter has also gathered statistics about economic inequality here. We pay lower taxes than other industrialized nations, and we seem not to mind giving up government services as a result. 
The big exception has been the United States. In 1965, taxes collected by federal, state and municipal governments amounted to 24.7 percent of the nation’s output. In 2010, they amounted to 24.8 percent. Excluding Chile and Mexico, the United States raises less tax revenue, as a share of the economy, than every other industrial country.

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