Biggie Sizing Plutocrats While the Circus Plays On

By: Richard Mills | Fri, Sep 27, 2013
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As a general rule, the most successful man in life is the man who has the best information

Real Median Household Income in the United States

Share of Total Income, 1917-2012

Pulitzer Prize-winning journalist David Cay Johnston says the incomes of the bottom 90 percent of Americans, after being adjusted for inflation, grew by only $59 on average between 1966 and 2011, over the same period the average income of the top 10 percent of Americans grew by $116,071.

A 2011 study from the Congressional Budget Office (CBO) reported incomes for the bottom fifth of Americans grew 20 percent between 1979 and 2007. Members of the top one percent saw their incomes grow by 275 percent during the same period,

The U.S. top one percent of income earners accounted for 17 per cent of national income in 2010 - the top one percent in Canada took in 10.6 per cent of national income in 2010.

In the U.S. the average income of someone in the top 10 percent of income earned was 15.9 times greater than the average income of someone in the bottom 10 per cent of the income distribution - the Canadian ratio is 8.9 percent.

Income inequality figures would be much worse except that:

Yet even after all this...

U.S. households, on average owe 138 per cent of their after-tax income and even worse off are Canadians, on average Canadians owe 165 per cent of after-tax income.

"The top 1 percent took more than one-fifth of the income earned by Americans, one of the highest levels on record since 1913, when the government instituted an income tax. The figures underscore that even after the recession the country remains in a new Gilded Age , with income as concentrated as it was in the years that preceded the Depression of the 1930s, if not more so." ~ Ex-Labor Secretary, Robert B. Reich ' The Rich Get Richer Through the Recovery'

What is causing the rising inequality of incomes and wages?

"Executives constitute a larger group of workers than is commonly recognized, and the extraordinary pay increases received by chief executive officers of large firms had spillover effects in pulling up the pay of other executives and managers. Consequently, the growth of CEO and executive compensation overall was a major factor driving the doubling of the income shares of the top 1.0 percent and top 0.1 percent of households from 1979 to 2007." ~ Bivens, Josh, and Lawrence, Mishel. 2013. "The Pay of Corporate Executives and Financial Professionals as Evidence of Rents in Top 1 Percent Incomes" Journal of Economic Perspectives

From 'CEO Pay in 2012 Was Extraordinarily High Relative to Typical Workers and Other High Earners' by Lawrence Mishel and Natalie Sabadish we get the following:

According to data compiled by the AFL-CIO, the average CEO pay at 327 of the nation's biggest companies is $12.3 million when you include salaries and all other incentives.

That's $7,000 an hour or 350 times the average workers per hourly wage of $20 in the U.S. The ratio of CEO pay to average worker pay in:

The average U.S. worker makes $35,204 a year. The CEO at 327 of America's biggest corporations works 5 hours to make what the average American worker makes in a year.

That's average salaries I'm using, not median, which would of course be much lower - the average salary includes large white collar pay checks.

The 100 top-paid CEO's of companies listed on the Toronto Stock Exchange's composite index were projected to earn, by noon of the first working day of 2012, $44,366. That's quicker than in 2009 when they had to sweat it out till 2:30. The average Canadian's salary was $47,200 in 2012.


Conclusion

"The middle-class America of my youth is best thought of not as the normal state of our society, but as an interregnum between Gilded Ages." ~ Paul Krugman 'For Richer' The New York Times

Krugman's article, although dated October 2002, is a must read.

Deng Xiaoping, who was China's first leader after Mao said "Some should be allowed to get rich first." Sounds like our western plutocrats took that bit of wisdom to heart and waddled to the trough with it.So get in line, although in times of such lop-sided income inequality you might be waiting a while.

The air stinks when you're in a herd, the water tastes terrible, the view is monotonous and the grazing, when you finally get to it, is to say the least not the most succulent or tastiest. Being all wrapped up in Honey Boo Boo's (or the bearded wonders on Duck Dynasty) latest escapades keeps the herd enthralled and complacent and the circus plays on.

You need to become an outside the herd animal and put your family's financial health and safety on your radar screen.

Is getting ahead of the herd on your radar screen?

If not, it should be.

 


 

Richard Mills

Author: Richard Mills

Richard (Rick) Mills
www.aheadoftheherd.com

Richard Mills

Richard lives with his family on a 160 acre ranch in northern British Columbia. He invests in the resource and biotechnology/pharmaceutical sectors and is the owner of Aheadoftheherd.com. His articles have been published on over 400 websites, including: SafeHaven.com, WallStreetJournal, USAToday, NationalPost, Lewrockwell, MontrealGazette, VancouverSun, CBSnews, HuffingtonPost, Beforeitsnews, Londonthenews, Wealthwire, CalgaryHerald, Forbes, Dallasnews, SGTreport, Vantagewire, Indiatimes, Ninemsn, Ibtimes, Businessweek, HongKongHerald, Moneytalks, SeekingAlpha, BusinessInsider, Investing.com and the Association of Mining Analysts.

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