Friday, September 30, 2005

From the clipping files...

The ratio of the average CEO's pay to that of the average production worker is 431 to 1, according to a study of 367 large corporations done by the Institute for Policy Studies and United for a Fair Economy. If minimum wage had kept pace with CEO pay levels since 1990, it would be $23.03 an hour. Interestingly, this is not as bad as it's ever been-- during the last two years of the Clinton administration, the ratio was over 500 to 1, I guess due to the booming economy and larger CEO bonuses.

Gift bags at this year's Academy Awards were supposedly filled with $100,000 worth of free stuff. I've also read about the rooms at benefit events where celebrities can "shop" for free gifts. Why do people who already have money get all the good free stuff? I've gone to benefit events and never gotten anything better than a crappy bottle of perfume and some gardening gloves. Obviously all this stuff is donated by companies who want to promote their products, and if someone sees Angelina Jolie wearing those gardening gloves, it will probably have a different effect than if someone sees me wearing them. But is Angelina Jolie going to tell all her friends "hey, I got an awesome pair of gardening gloves for free!" I'm sure she has better things to do. And if she does tell her friends that, then all they'll probably do is call the company and ask for their own free samples. If I tell my friends I got a great pair of gardening gloves for free, they might actually go out and buy a pair.

The poverty rate increased last year to 12.7% nationwide.
Median pretax income was $44,389, which is lower than it's been anytime since 1997 (adjusted for inflation). In New York City, the poverty rate rose to 20.3% last year, but many economists think this statistic is misleading because it doesn't adjust for the high cost of living here compared to the national average. The real percentage would be even higher. A family of 4 is considered to be at poverty level if their household income is $19,157 or less a year. That is less than 25% of what I made last year as a single person with no dependents, so I shouldn't complain, but I feel like even people at my income level have to struggle to have what most Americans see as a middle-class lifestyle. For all that our politicians talk about our wonderful American way of life and high standards of living, I think it is a joke that a family of 4 living on $20,000 a year is somehow not counted as being poor.

On a related note: the middle class is shrinking in Manhattan. It is the county with the highest income inequality in the US. The top 5th of households make 52 times more than the bottom fifth. In 1990, the ratio was only 32 to 1. In 1980, it was only 21 to 1. There are 50,000 fewer families making between $35-100k this year, while the number of people making less than that, and more than that increased.

Sources: NY Times and Wall Street Journal


Henry said...

'I feel like even people at my income level have to struggle to have what most Americans see as a middle-class lifestyle.'

I have conflicting feelings about that topic myself. It's tough to get by sometimes but then I think that 98% of the world would kill to have the kind of life I have now.

I guess it's all a matter of proportion. We live in a wealthy nation so cost of living is higher so we need to make more money to get by. The feelings are still odd to me.

Madame X said...

I totally agree that it's hard to discuss this without recognizing our position in relation to other countries. It goes without saying that even the poorest Americans are still better off than many people in the rest of the world, and definitely someone at my income level is incredibly fortunate by almost any yardstick. My point is that our nation defines itself around the idea of a middle class life being available to almost everyone-- a middle class life being defined as owning a home and a car or two, cable TV, decent meals, clothes, school supplies, maybe a trip to Disneyland at least once in your life, and the ability to retire before the age of 70. Somewhere above that begins "wealth", and somewhere below that begins "poverty". Our politicians like to put America on a pedestal and say our system is the one that works the best, and one of their arguments might be to say, look, only 12% of our country is poor! Everybody else is doing great! But that is based on a definition of poverty that sets the bar too low. I think there is too huge a gap between that stereotypical middle class life and what a family of 4 earning $19,000 can afford. Even a people earning $50,000 or in some areas even $80,000 can't have all those things without getting into credit card debt, etc. I guess my point is that we should define our poverty level more accurately in relation to the way we define our supposed high standard of living.