Before I begin the second part of my reflections, let me respond very briefly to some of the comments posted yesterday. Several folks asked why I said nothing about the labor movement in the United States, which has played such an important role in the past two centuries. I intend to talk about that later on, but note that the labor movement was not and is not a liberation movement designed to remove discriminations against some subset of the population. It is instead a frontal assault on the structure of capitalism itself, or alternatively an attempt to ameliorate some of the more serious damage that capitalism does to workers. Remember what I said: these reflections are not an integrated and systematic theoretical discourse but an attempt to put on paper (or the Internet equivalent thereof) some thoughts that I have not yet succeeded in transforming into a single coherent story. There were also a good many comments back and forth about whether a socialist society would exhibit some significant measure of economic and social stratification. That is an important question which I shall try to say something about down the road, but let us be clear: the primary target of socialist theory and action is not social stratification but capitalist exploitation. These are not at all the same thing and need to be analyzed separately.
Today I want to talk about patterns of income and wealth inequality in the United States. As I am sure you all know, inequalities in wealth are dramatically greater even than the very great inequalities in income. Let me start with income. One useful way in which income statistics are presented is in the form of annual income accruing to households. There a bit more than 128 million households in the United States. Some of these but by no means all are traditional nuclear family households with a father, a mother, and one or several minor children. Others are single-parent households, blended family households, multigenerational households, and households consisting of a single individual. My favorite category is POSSSLQs, which is the number crunchers’ term for persons of the same sex sharing living quarters.
In 2019 the median household income in the United States was just about $63,000. (I am sure regular readers of this blog fully understand the distinction between average income and median income but for those who may have stumbled on this site more or less by accident I will illustrate the distinction by a little imaginary example. Suppose five workers are sitting in a bar having a beer. Each of them, we may suppose, earns $30,000 a year. The average income of the folks in the bar is $30,000 a year and so is the median income, because half of those sitting there make less than $30,000 a year and half make more. Then Lebron James stops in for a beer. The median income remains $30,000 a year but the average income is now something more than $6 million a year because Lebron James, according to Google, makes $37 million a year all by himself.)
So there are 64 million households making less than $63,000 a year. There are also, as it happens, 32 million households making less than $31,200 a year, and 1.28 households making less than $14,203 a year. That is several million people living each year on less than the earnings of a worker employed full-time at the federal minimum wage of $7.25 an hour.
At the other end of the spectrum, there are more than 19 million households making more than $150,000 a year. And then of course there are the 1.28 million households making more than $475,000 a year. One striking way to think about this is that some young man or woman who inherits $63 million thereby acquires an amount equal to a millennium of median household annual incomes.
By the way, the median weekly earnings for full-time employed workers at the end of 2018 works out to be a little bit less than $45,000 a year or $22.50 an hour, which tells us that very large numbers of households have two or more wage earners.
The data for household wealth are dramatically more unequal. Thomas Pikkety reported that fully half of all American households have zero net worth. How is that possible? Don’t they have cars and phones and beds and kitchen tables and dishes and clothing? Yes, of course they do, but they also have debts – maxed out credit cards, second mortgages, student debt, unpaid taxes and the rest.
The United States is the richest country in the world but the people of the United States are, by and large, a good deal poorer than we tend to suppose. Let me offer a few concrete examples to orient us. Here in North Carolina, which is by no stretch of the imagination the wealthiest part of the United States, the average high school teacher makes $58,800 a year. A husband-and-wife team of high school teachers in Greensboro North Carolina both making that amount are, as a household, taking in annually more than 73% of all the households in the United States. If the term “upper-middle-class” has any measurable meaning at all, then they are upper-middle-class but nobody commenting on economic affairs in the media thinks in that way at all. A husband-and-wife household in which both of them are FBI special agents has an annual income greater than 96% of all the households in the United States. Once again, if the term “upper-class” or “rich” has any functional meaning then it applies to this couple. And yet television commentators routinely would call such people “middle-class.” A long time Walmart assistant store manager who just never made it to the next step, with a stay at home wife and a couple of kids, brings in more money for his household than is earned by 60% of the households in the United States.
The terms “middle-class” and “working class” have lost all functional meaning in American public discourse these days. A husband and wife each working a $15 an hour job for the year are, as a household, just about exactly the median household and yet nobody would describe them as “middle-class.”
I will stop here for today and tomorrow add some facts and figures about higher education and the role it plays in determining income and wealth distribution.