>Date: Thu, 20 May 1999 From: "elson" <elson at azu-boles.net>
>To: WORLD SYSTEMS NETWORK <wsn at csf.colorado.edu>
>Subject: US Standard of Living
>
>Here are some fact on US inequality. I apologize for focusing on a core
>state, when the more important issue is the core-periphery gap. But, this
>is a response to claims to the contrary regarding the US.
>
>The facts for the US are, as of 1996:
>
>% US pop/ %national wealth
>top 20% 75%
>second 20% 16.6
>third 20% 7.1
>fourth 20% 2%
>fifth 20% (-0.7%) !
>(US Bureau of the Census, cited in
>Pearlstein, 1995)
Curious how 1996 data were in a 1995 publication, but let's not quibble.
The Census Bureau's figures on wealth distribution are pretty unreliable, since they don't cover rich people very well, and while that doesn't matter so much for income distribution, it matters a lot for wealth distribution. Figures on U.S. wealth distribution according to Federal Reserve's Survey of Consumer Finances are at <http://www.panix.com/~dhenwood/Wealth_distrib.html>. The top 10% of the distribution has 77% of all nonresidential wealth; the top 1%, 43%.
>This is easily the worst distribution of wealth in the core, and is
>comparable to that of many peripheral states.
I don't know of any other country that has a survey of household finances as complete and rigorous as the SCF, so comparisons to other countries are pretty dicey. Income comparisons are a lot easier, thanks to the Luxembourg Income Study. So you can safely say that for income and probably for wealth, but we don't know for sure on wealth.
Here are the U.S. income distribution numbers for 1997 (the most recent year available) and 1968 (the most equal distribution since modern numbers begin in 1947, and probably the most equal in U.S. history). There's a long-term view of U.S. income distribution at <http://www.panix.com/~dhenwood/Stats_incpov.html>, though unfortunately the graphs only run through 1996. 1997 was slightly more unequal than 1996.
US INCOME DISTRIBUTION percent of total household income by quintile
1997 1968 change
poorest 3.6 4.2 -0.6 (percentage points) 2nd 8.9 11.1 -2.2 3rd 15.0 17.5 -2.5 4th 23.2 24.4 -1.2 richest 49.4 42.8 6.6
top quintile ------------ 80-94 27.7 26.2 1.5 top 5% 21.7 16.6 5.1
gini 0.459 0.388 18.3% (percent)
ratios ------ 5/1 13.7 10.2 5/3 3.3 2.4 3/1 4.2 4.2 top 5%/1 6.0 4.0 top 5%/3 1.4 0.9
These figures come from the Census Bureau. They're a good picture of the macro distribution, but once again they miss the top 1-2% of the population. That's less important in estimating income distribution than wealth distribution, because wealth is so much more densely packed at the top than income.
>The number of people who fell below the poverty line increased to 38 million
>in 1994, higher than the number in 1964, higher than ever in fact.
That's not entirely fair, because the population grew by 72 million between 1964 and 1994. The poverty rate was 19.0% in 1964 and 14.5% in 1994. It fell to 13.3% in 1997, which is nonetheless higher than the previous 12.8% low in 1989. But the U.S. poverty line is an absolute concept - the purchasing power of a poverty-line income in 1997 is supposed to be the same as that of 1987 or 1967, despite overall income growth. On a relative basis - with the poverty line defined as, say, half the median, which is pretty standard among academic researchers - the U.S. poverty rate would be nearly twice its official level. In 1959, the poverty line was 43% of median income; in 1997, 29%.
>More US workers became 'contingency workers,'-- those with part time jobs
>that pay no basic benefits, such health care, retirement, vacation, etc.
>Throughout the 1980-90s, the percentage of US workers has grown from about
>1/4 to about 1/2 by next year.
The U.S. labor market is a nasty place, but these figures are wildly exaggerated. The Bureau of Labor Statistics puts the share of the workforce in contingent jobs at under 5%, and it's actually fallen slightly in the 1990s <http://stats.bls.gov/news.release/conemp.toc.htm>. Contingency is different from no benefits; only about half of private sector workers have some kind of pension plan, but almost everyone has at least a few vacation days.
>Moreover, this kind of work spread from fast
>food/retail sales, etc. to all industries. It has naturally followed from
>"downsizing" that when labor is needed, it's hired part time and temporary,
>greatly reducing costs.
Again, this is exaggerated; the part-time share of the workforce has been virtually flat since the 1970s, and temporary workers account for about 2.5% of total employment.
>Also, it now takes more people working full time per household to achieve
>the same standard of living achieved thirty years ago by a single full time
>worker per household. More work, less pay.
>
>The cliche that "the rich get richer and poor get poorer" is a definite fact
>in the US, as reported to us by the US government. One will find similar
>changes on a systemic scale.
I'm assuming that means world-systemic, and that's true. First World/Third World gaps have never been this wide, and keep getting wider every year.
Doug