| Rising income disparity is making segments of America resemble a third world country. |
| In 2007, the top one ten-thousandth of households took home 6 percent of the nation’s income, up from 0.9 percent in 1977. It was the highest such level since at least 1913, the first year for which the I.R.S. has data.
The top 1 percent of earners took home 23.5 percent of income, up from 9 percent three decades earlier. Source: "Rise of the Super-Rich Hits a Sobering Wall" By DAVID LEONHARDT and GERALDINE FABRIKANT - NY Times - August 20, 2009 The income of the 400 wealthiest Americans swelled in 2006, to an average of $263 million, according to I.R.S. data. Since 1996, this group’s share of the nation’s total wealth has nearly doubled to more than 22 percent. Source: "Tempo of Audits Drops for Wealthy" By LYNNLEY BROWNING - NY Times - March 22, 2009 To the long list of reasons American companies aren’t hiring - business losses, tight credit, consumer retrenchment - add the fact that many of their older workers are unable, or afraid, to retire. In other parts of the developed world, people are retiring as planned, because of relatively flush state and corporate pensions that await them. But here in the United States, financial security in old age rests increasingly on private savings, which have taken a beating in the last year. Prospective retirees are clinging to their jobs despite some cherished life plans. Last year [2008] in the United States, almost a third of people ages 65 to 69 were still in the labor force; in France, just 4 percent of people this age were still working or looking for work. After all, Europe isn’t just the land of “socialized” medicine. It is also the land of “socialized” retirement plans, and like other automatic stabilizers, pensions help cushion the blow of an economic crisis. The typical American receives just 45 percent of his preretirement wage through Social Security, according to the Organization of Economic Cooperation and Development. By contrast, a worker in Denmark, which has one of the most comprehensive and generous retirement arrangements in the world, can retire with a state pension that is 91 percent of his salary. [T]he nation’s sprawling 401(k) plans... private retirement savings vehicles, designed 30 years ago as a supplement to traditional corporate pensions, have somewhat haphazardly replaced the old system, like an innocuous weed that somehow overgrew the garden. "One unappreciated side effect of the 401(k) system is that it’s a sort of reverse automatic stabilizer," says Teresa Ghilarducci, an economics professor at the New School. One study found that nearly a quarter of Americans ages 56 to 64 had more than 90 percent of their 401(k) balances invested in stocks instead of bonds, against financial advisers’ standard advice for people nearing retirement age. "Employees are just not capable of making these decisions," said Rick K. Shapiro, a member of the army of financial planning professionals that America’s private retirement system (and private health care and college education financing systems) has spawned. "Maybe they can learn, but they’re distracted, and they’re not incented to learn until the thing blows up." A Pew Research survey scheduled for Thursday release found that nearly four in 10 workers over age 62 say they have delayed their retirement because of the recession. Source: "A Reluctance to Retire Means Fewer Openings" By CATHERINE RAMPELL and MATTHEW SALTMARSH - NY Times - September 2, 2009 Based on discussions with major utility companies around the country, we will see record numbers of families facing shut-offs,” said [Mark Wolfe, director of the National Energy Assistance Directors’ Association, which represents state aid officials in Washington]. Rhode Island officials, for example, expect shut-offs in 2008 to surpass the record of 30,000 set in 2007. In Pennsylvania, applications for “crisis grants” for those whose oil tanks are empty or who face an imminent utilities cutoff totaled about 133,000 in each of the last two years but have already reached 166,000 this year, said Linda Blanchette, deputy secretary of income maintenance. And in New York, the number of households that received aid increased by 5 percent in the last year, to 895,000. This is the highest number in 16 years, Mr. Wolfe said. And the numbers would have been higher if some states had not been forced to reduce the number of aid recipients by increasing grants or tightening eligibility requirements — in effect choosing to provide more aid to fewer people. Source: "Cutoffs and Pleas for Aid Rise With Heat Costs" By ERIK ECKHOLM - NY Times - April 25, 2008 After Hurricane Katrina, the emir of Qatar donated $100 million to the Gulf region, intended to help rebuild housing, hospitals and schools. But the effect of his visit to New Orleans on Tuesday seemed muted, as two universes peered at each other through the dark smoked glass of his motorcade. It was through that filter that the genial, burly emir, Sheik Hamad bin Khalifa al-Thani, saw the unhealed landscape of the Lower Ninth Ward, touring the scarred lots in a police-guided caravan of luxury vans and cars as the few people out in the spring sunshine stared blankly back at the opaque windows. Open-mouthed astonishment registered on some of the faces at street level. The emir did not get out to walk through the ruined neighborhood. The ruler of a tiny country ranked third on a United Nations wealth list, he had given generously The Children’s Hospital here, Habitat for Humanity, Tulane, Loyola and Louisiana State Universities, students seeking scholarships, the area’s homeless — all have benefited from the oil-and-gas-borne largess of Qatar, one of the most open-handed of the donors to come to the Gulf Coast’s aid after the disastrous 2005 storm. Two other Persian Gulf nations, Saudi Arabia and the United Arab Emirates, have also given. “We saw what happened to Orleans,” the emir said in the interview. “We were watching on television. We are part of this society. It is good for everyone to help out. I really felt sorry for the people.” Source: "Emir of Qatar Tours New Orleans to See Fruit of His $100 Million Donation" By ADAM NOSSITER - NY Times - April 30, 2008 |
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