Meanwhile, the top 1 percent got a raise of 36.8 percent, according to a new report.
Falling wages for the majority of Americans is something new to generations of Americans who grew up with a sense of rising expectations. U.S. citizens are not used to living in a banana republic.
The United States was once a country with a strong middle class that consumed an increasing share of the products it manufactured. Now the U.S. is dominated by finance and services as manufacturing was sent overseas by trade deals like NAFTA, CAFTA and KORUS. That transformation has changed the country's demographic and income contours.
Income inequality has now reached the levels of the Roaring '20s, which preceded the stock market crash, bank failures and the Great Depression, according to a new report by our friends at the Economic Policy Institute.
|Chart courtesy Economic Policy Institute.|
|Abandoned shopping mall in Toledo, Ohio|
The New York Times reported yesterday that the American middle class has been shrinking for 50 years. That wasn't a problem until 2000. Until then, the middle class declined because people were rising up out of it into higher income brackets. For the past 15 years, people have been falling out of the middle class into poverty.
The Times reports the composition of the middle-class is changing as well,
...with people 65 and older making up the fastest-growing segment. Meanwhile, married couples with children, who have seen their incomes grow, have diminished as a share of the middle class.Workers fare worse in some states than others, EPI reported.
The most unequal states? New York and Connecticut. Average income for the top one percent was more than 48 times the average income for the 99 percent. Why? Because Wall Street is in New York City.
The most equal state? Hawaii, where average income for the one percent was 14.6 times average income for the 99 percent.
There are 16 states where the only people who increased their wealth between 2009-12 were the one percent. Is your state one of them? They are:
- New York
- North Carolina
- Rhode Island
- South Carolina