December 5, 2013 by David K. Sutton

Why Are Middle Class Incomes Stagnant? Are We Simply Unproductive Compared To The Super Wealthy?

Would you like to make an extra $50,000, $75,000, or $100,000 dollars a year? I know I would. Would you like a yearly income of $75,000, $150,000, or $300,000? In reality, most Americans make far less than even the lowest amount I listed. In 2012, the median income in America was $51,017, which was down slightly from 51,100 the year before. The poverty rate was 15%, which is over 45 million people. For the bottom 90% of the country, wages have been flat for the past three decades compared to top percent earners who have seen their income double, triple and more.

What If Your Income Grew As Fast As the 1 Percent’s? Try Our Calculator | Mother Jones — [I]f you’re in the bottom 90 percent of earners, your current income would be an estimated 205 percent higher if the vast majority of incomes had kept up with the gains experienced by the superwealthy.

According to the calculator provided in the above Mother Jones article, if you make $25,000 a year, your income would be $76,258 if it had kept pace with the top one percent. $50,000 turns into $152,516. $100,000 turns into $305,031.

Now some Einstein is going to come along and say something like this:

Comment by Danny: The thing is, though, if everyone made more money, then everything would cost more money. Simple economics. Products are sold at a value which people are willing to pay. If the average person makes 90k a year, then they would be willing to pay $15 for a McDonald’s meal, for instance, or $40k for a new car instead of $20k.

Maybe so, but I think Danny missed the point. A small segment of the population has managed to capture a larger share of the pie than they once did. We aren’t talking about everyone making more, we are talking about greater income equality. If some of the gains that went to the top one percent instead went to ALL Americas, we would have greater equality, with most people making more and the super wealthy still making more, just not AS MUCH more as they are now. Let me know if I’m going to fast for ya.

There was a time when America had a robust and growing middle class. I wonder when that all changed?

Aw fuck. Well that figures.

Ever since “free-market ideology” and its deadbeat cousin “trickle-down economics” came on the scene in the Reagan years, the super wealthy have done extremely well, building their massive wealth on the backs of the average American worker. Do you know what happens when you give a tax cut to a wealthy person? They save it. Do you know what happens if you divide up that same size (in dollars) tax cut and give it to millions of average Americans instead? They spend it.

I’ve said it before, I’ll say it again. Throughout human history the most common class structure is that of a few extremely well-off people, usually royalty and/or dictators, and then everyone else who is poor. The “Proles” if you will. A large and stable middle class is not a normal product of letting the “market sort it out” or letting the people at the top dictate to the rest of us how things should work. A middle class comes about when you have government policy, particularly tax policy, that — yes, I’m going to say it — redistributes wealth. It’s not about punishing the productive, because that implies the people with little are unproductive, which is of course nonsense. A more just society, with a strong middle class makes for a healthy economy. It benefits all.