[Originally posted at The Education
Forum circa 7 July 2007]
The following information is from Time Almanac 2000, with Information Please.
The Millennium Collector's Edition. Ed. Borgna Brunner. Boston: Family
Education Company, 1999, p. 838.
A brief article, "The Rich Get
Richer," reads as follows:
"In September 1999, the Center on Budget and Policy Priorities (CBPP) released a report examining the distribution of after-tax income among Americans in 1977 and 1999. The report, which is based on data from the Congressional Budget Office, shows that despite tax increases on high-income households in 1990 and 1993, this group has received large tax cuts overall since 1977. The result has been a widening of the gap between the rich and the poor.
"The CBPP report breaks the U.S. population into fifths based on after-tax household income level. According to the report, the top one percent of Americans made an average gain of 115% in after-tax income between 1977 and 1999. The top one-fifth also fared well, gaining 43%. In contrast, the middle fifth made only 8% more and the bottom fifth in fact saw its average income decline by 9%. The next-to-bottom fifth did not change significantly."
The data for this is as follows (U.S. Average After-Tax Income in 1977 and 1999):
The lowest 1/5 income group had an average after-tax income in 1977 of $10,000 a year (5.7% of all US income); in 1999 the lowest fifth was projected to have an average income of $8,800 (4.2% of all income).
The second-lowest 1/5 income group had an average income in 1977 of $22,100 a year (11.5% of all income); in 1999 this income group was projected to have average income of $20,000 (9.7% of all income).
The middle group had an average income in 1977 of $32,400 a year (16.4% of all income); in 1999 this group projected to have average income of $31,400 (14.7% of all income).
The fourth 1/5 income group in 1977 had an average income of $42,600 a year (22.8% of all income); in 1999 this group projected to have average income of $45,100 (21.3% of all income).
The highest 1/5 income group in 1977 had an average income of $74,000 a year (44.2% of all income); in 1999 this group projected to have average income of $102,300 (50.4% of all income).
Meanwhile, the top one percent had an average income of $234,700 a year in 1977 (7.3% of all income); in 1999 the top one percent projected to have average after-tax annual income of $515,600 (12.9% of all US income).
"NOTE: Figures rounded to nearest hundred dollars.... Source: Center on Budget and Policy Priorities. Web: www.cbpp.org. (Based on data from the Congressional Budget Office.)" (Ibid.)
Although no indication is given either way, I assume these figures are in constant 1996 dollars (like the minimum wage data below; otherwise $10,000 in 1977 would be a much larger amount than $8,800 twenty years later). But even assuming so, it's noticeable that income becomes "depressed" the lower you go on the income scale (see minimum wage rates below for similar indications of "depressed income").
One of the interesting things about this is that while the highest income group was the only one that actually increased its "percentage share" of all after-tax income (44.2% to 50.4%), it seems likely that the illusion of "upward mobility" for the second-highest group (and similar notions of incremental improvement in the middle groups) helped offset the reality that there was little or no substantive improvement in their own "position." (The first four groups are separated by around $10,000 ascending increases, until that last group, where there's a big jump in differential -- $45,000 to $100,000.) In other words, the vast, vast majority (4/5ths) of Americans can "aspire" to after-tax annual income of around $50,000, and all their income put together only makes up half of all such income.
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In the following data, the year and its corresponding US federally-mandated minimum wage rate is given, followed in parentheses by the constant value of that rate in 1996 dollars. [1]
1955: $0.75 ($4.39)
1956: $1.00 ($5.77)
1957: $1.00 ($5.58)
................................................................................
1960: $1.00 ($5.30)
1961: $1.15 ($6.03)
1962: $1.15 ($5.97)
1963: $1.25 ($6.41)
1964: $1.25 ($6.33)
1965: $1.25 ($6.23)
1966: $1.25 ($6.05)
1967: $1.40 ($6.58)
1968: $1.60 ($7.21)
1969: $1.60 ($6.84)
1970: $1.60 ($6.20)
................................................................................
1973: $1.60 ($5.65)
1974: $2.00 ($6.37)
1975: $2.10 ($6.12)
1976: $2.30 ($6.34)
1977: $2.30 ($5.95)
1978: $2.65 ($6.38)
1979: $2.90 ($6.27)
1980: $3.10 ($5.90)
1981: $3.35 ($5.78)
1982: $3.35 ($5.45)
................................................................................
1988: $3.35 ($4.44)
1989: $3.35 ($4.24)
1990: $3.80 ($4.56)
1991: $4.25 ($4.90)
1992: $4.25 ($4.75)
1993: $4.25 ($4.61)
...............................................................................
1995: $4.25 ($4.38)
1996: $4.75 ($4.75)
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[1] "Adjusted for inflation using the CPI-U. Source: U.S. Employment Standards Admin. Web: www.dol.gov/esa/public/miniwage." (Ibid., p. 828.)
One conclusion may be that from the time of the Kennedy Administration until the Reagan Administration there was some consensus that a "reasonable" minimum wage rate was about $6.00 an hour (in 1996 dollars). Since then apparently even $5.00 an hour was too much to hope for.
To put this in context, I know plenty of people who've worked the same jobs for 25 years or so and make a good living earning about 3 times the 1996 value of the minimum wage circa 1962; this is "more" in today's terms because it's roughly 4 times as much as current minimum wage rates.
To put this in more context, where I live factory workers consider themselves lucky to start out at $10.00 an hour, which is not much more than what minimum wage would've been in the 1960s. And there's always uncertainty because of extremely inexpensive labor pools in other countries (where democratic government as such is lacking, to say nothing of basic bargaining rights, and so various commodities can be produced at much cheaper cost and sold at cheaper prices).
