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July 30, 2011 - Jim Anderson
You remember 1980?
Former California Gov. Ronald Reagan was elected president, one year after the start of the Iran hostage crisis.
It was the year of “Who shot J.R.?”
Paul Buchheit of DePaul University has offered some income comparisons between 1980 and 2010.
In 1980, 7 percent of the nation’s income went to the richest 1 percent of Americans. In 2010, it was more than 20 percent.
In 1980, incomes for the top 1 percent averaged $148,000. Based on 1980 dollars, incomes for the top 1 percent have since soared to $450,000. Again, the modern figure is based on 1980 dollars. In today’s dollars, it would be about $1.17 million.
And what of the rest? Here’s how it breaks down, based on 1980 dollars and IRS data:
— Incomes for the next 9 percent have gone from $46,000 to $50,000.
— Incomes for the next 40 percent have dropped from $17,500 to $15,000.
— Incomes for the bottom 50 percent have dropped from $5,400 to $3,750.
(Again, to help put 1980 dollars in perspective, an income of $17,500 in 1980 would equate to an income of about $45,700 today. An income of $46,000 in 1980 would be about $120,000 today.)
Summarizing, based on 1980 dollars, incomes for the top 1 percent are up more than 200 percent over the past 30 years. Incomes for the next 9 percent are up about 9 percent, incomes for the next 40 percent are down 14 percent, and incomes for the bottom 50 percent are down about 30 percent.
In the meantime, American productivity has increased about 80 percent, Buchheit notes.
Buchheit has posed a question: “In what way do the richest 1 percent deserve such extraordinary gains?”
Conservative economist Thomas Sowell has answered:
“Most people are paid voluntarily by others to whom they supply goods and/or services, and only to the extent that others value what is supplied enough to part with their own hard cash.”
In other words, the value of what 90 percent of Americans contribute to the economy has fallen off since 1980? Even though overall productivity is up 80 percent. Meanwhile, the contributions of an utra-elite sector has taken off like gangbusters?
Buchheit doesn’t buy it. He claims the top 1 percent has tripled its share of the nation’s income mainly through tax cuts and financial deregulation.
Over the past 30 years, as incomes for the utra-elite have soared, so has the national debt. Today, we have a federal debt exceeding $14 trillion. In 1980, it was under $1 trillion.
OK, that’s not to say a cure-all economic tonic dates to the days of “Dallas.”
In 1980, mortgage rates were in the range of 12 to 13 percent. Today, thankfully, they’re under 5 percent.
But where are we heading? There’s no sign that the concentration of income towards the super-rich is abating. Thirty years from now, will, say, 50 percent of the nation’s income be going to the top 1 percent?
Is this what capitalism is meant to be?
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