New Figures Detail Depth Of Unemployment Misery, Lower Earnings For All But Super Wealthy (VIDEO)

UPDATE: The numbers that form the basis for the story below are "erroneous." Bloomberg News reports that on Monday, Nov. 1, 2010, the Social Security Administration released corrected tables that show average income for top earners fell by 7.7 percent -- it did not increase five-fold as was previously reported. The administration told Bloomberg news that the bungled numbers stem from two people who "were found to have filed multiple W-2 forms that made them into mulitibillionaires." The administration's inspector general has been asked to investigate the $32.3 billion-dollar mistake.

One out of every 34 Americans who earned wages in 2008 earned absolutely nothing -- not one cent -- in 2009.

The stunning figure was released earlier this month by the Social Security Administration, but apparently went unreported until it appeared today on Tax.com in a column by Pulitzer Prize-winning tax reporter David Cay Johnston.

It's not just every 34th earner whose financial situation has been upended by the financial crisis. Average wages, median wages, and total wages have all declined -- except at the very top, where they leaped dramatically, increasing five-fold.

Johnston writes that while the number of Americans earning more than $50 million fell from 131 in 2008 to 74 in 2009, those that remained at the top increased their income from an average of $91.2 million in 2008 to almost $519 million.

The wealth is astounding, says Johnston. "That's nearly $10 million in weekly pay!... These 74 people made as much as the 19 million lowest-paid people in America, who constitute one in every eight workers."

Johston sees the depressing figures as a result of government tax policies maintained by politicians with an eye on re-election, not good government:

It is the latest, and in this case quite dramatic, evidence that our economic policies in Washington are undermining the nation as a whole.We have created a tax system that changes continually as politicians manipulate it to extract campaign donations. We have enabled ''free trade'' that is nothing of the sort, but rather tax-subsidized mechanisms that encourage American manufacturers to close their domestic factories, fire workers, and then use cheap labor in China for products they send right back to the United States. This has created enormous downward pressure on wages, and not just for factory workers.

Combined with government policies that have reduced the share of private-sector workers in unions by more than two-thirds -- while our competitors in Canada, Europe, and Japan continue to have highly unionized workforces -- the net effect has been disastrous for the vast majority of American workers. And of course, less money earned from labor translates into less money to finance the United States of America.

Johnston's assertions appear to be supported by a recent Senate vote.

In September, Senate Republicans along with a handful of Democrats, partnered to defeat the Creating American Jobs and Ending Offshoring Act, a bill that would have raised taxes on companies that send jobs abroad and benefited companies that bring jobs back to American soil.

The notion that it's good business for American corporations to send jobs overseas has been championed by U.S. Chamber of Commerce, the nation's biggest and most powerful business lobby.

The tabulations, staggering as they may be, are only half of the picture.

Behind the official 9.6 percent unemployment rate (which is probably somewhere closer to 22 percent), are the stories of millions of individuals who are struggling to get by or are coming to terms with a future of lower wages and a life with less.

"60 Minutes" profiled the underemployed and unemployed on Sunday in a piece titled "The 99ers."

Among the most troubling stories are those of a financial analyst who has been unemployed for two years and is now living in a stranger's attic and a former office manager who now collects bottles and cans to get by.

WATCH

Comments

[Rapier]

11:58 PM on 11/20/2010

The ones who initiated the mess are now buying expensive properties ... See
http://ofthisandthat.org/LettertoPresident.html

[youvebinfarteen]

02:54 PM on 11/04/2010

Trickle-down, Reaganomics does NOT work.

http://www.marketwatch.com/story/reagan-insider-gop-destroyed-us-economy-2010-08-10

GOP destroyed the US economy

From Reagan's own Budget Director.

[Shaun Hensley]

01:57 AM on 11/09/2010

When do we take to the streets?

[Truth9834]

05:24 PM on 10/31/2010

Company's are free to outsource jobs as voters are free to add tariffs or restrictions on shipping these jobs overseas. I am not a strong believer in a country with only the rich and the poor with no in between.

Read Economist Paul Samuelson, a Nobel Prize winner, paper stating that the economic effect of outsourcing is similar to allowing mass immigration of workers willing to compete for service jobs at extremely low wages. They can and will drive down the income for huge swaths of the middle class, even if they benefit their employers. Company's outsource to make more money, period. If it was efficiency CEO's salary's would be much much lower.

Lets start with tariffs. I think we lost the white collar jobs to India but we can get back the blue collar jobs and manufacture back in the US if we start taxing goods coming back in the US. I think it is difficult to do this with white collar jobs. Tax Corps that incur expenses in the US and deduct these expenses and that transfer jobs to India or China. Lets also require Corps to tell us how many employees are in America as a percentage of total employees. These Corps would no longer be considered American corps but multi-national corps. They would lose certain benefits that they take for granted starting with the designation that they are truly an American Corp, they are not.

[sideLineWatcher]

10:16 PM on 10/31/2010

The Chinese are the biggest purchasers of our debt. Unfortunately, we're in no position to add/increase tariffs.

[Shaun Hensley]

01:57 AM on 11/09/2010

Sure we are.

[macrocosm]

01:44 AM on 11/21/2010

Sadly with this "government" the only tariff we can enact is a personal one... do not spend another penny on foreign goods/services... go local and barter as much as feasible ... if your in a dangerous and unsustainable community where you feel things will get hairy quick .. then get out NOW, it will be a lot harder if not impossible when/if TSHTF.

[Simone Hill]

06:01 PM on 10/30/2010

Remember how the Republicans turned a record budget surplus into a record budget deficit and spent trillions of dollars on the war in Iraq.

This is the party that preached fiscal discipline and then cut taxes in time of war.

Remember that Republicans consider tax dollars spent on American citizens to be a waste of taxpayer money.

This is the party that still wants to put the torch to Social Security and Medicare.

Remember that Republicans believe in state rights UNLESS a state passes a law that doesn't coincide with their narrow point of view.

This is the party that wanted to add a "Marriage Protection Amendment" to the U.S. Constitution.

Remember how Republican ears are deaf to the screams of the people yet hear the whispers of Big Business.

This is a party that, given a choice between Abraham Lincoln and Ronald Reagan, would choose Ronald Reagan in a heartbeat.

http://www.youtube.com/watch?v=QlBOv8m_Xa8

On November 2, 2010 - REMEMBER!

[macrocosm]

01:46 AM on 11/21/2010

True but the Democrats hardly escape blame, it is both of them that have been running things in case you hadn't noticed.

[AZ85283]

05:58 PM on 10/30/2010

You folks can argue all you want about capitalism and such, but the problems the US unemployed are facing rest solely with US companies. Explain how during the same time period US born workers lost 1.2 million jobs but foreign born workers gained 656,000? Basically half of the people who became unemployed could still be working but aren't, why? Because foreign workers are cheaper. Why do businesses want to increase the cap on foreign work visas? So they don't have to hire US workers and possibly fire those already in jobs. Pure and simple they don't want to pay (but they do want you to buy their products). You can expect to see more unemployment as companies replace American workers with foreigners. Companies will continue to function, CEO's will make record bonuses, stocks will rise and everyone will be happy but the unemployed. Bet you today there's not one company that will detail how many people they hired and how many (or percentage) of foreign workers hired. Why, they don't want you to know the obvious. They'll claim they hired foreigners in jobs Americans aren't qualified for--yeah right. It's like companies saying they can't find an American to work because the foreigner might be less expensive, but they never offered the American's the opportunity to take the job at the same salary. They just don't want American workers because foreign workers might just be glad to get a job and wont cause any problems.

[TheCarCzarsPage]

12:01 PM on 10/31/2010

Kick out all illegals now.

[attilad]

01:28 PM on 10/30/2010

Sign People's Lobby's Fair Tax Bracket Reinstitution Congressional Proposal to deal with growing income and wealth inequality. Click to http://www.change.org/petitions/view/reinstitute_tax_brackets_that_grew_a_middle_class
It's beeter than merely griping.

[ZeraLee]

04:22 PM on 10/29/2010

We have become a nation divided by ideology. Community vs individualism. Pride and honor vs avarice and power. Perseverance vs instant gratification. Federalism vs Confederacy. Republic vs Corporatocracy.

Capitalism has not only reached across the border, it has straddled it. The national economic model is fundamentally broken. American workers and American corporations do not function in the same economy. That has to be fixed before we can prosper again.

Capitalism is not a form of government, no matter how many people try to make it one. It is a culture of competing and conflicting self-interests, not leadership. Under the domination of conservatism, we surrendered the initiative to others. The future went from 10 years (Space Race) to 3 months as we became fixated on quarterly profits. Economic myopia.

We need to develop new industries and oil independence, but conservatives resist. For 10 years, we tried the conservative approach in it’s extreme. Environmental law, anti-trust law, regulation, and budgetary restraint were all sacrificed in the name of conservative-style economic growth. And what did we get for it? Private sector job growth in decline for 10 years. Bush43 created only 3m net jobs, the worst performance on record. Wages stagnated, fraud flourished, the economy weakened and inevitably fell into recession.

If we are to recover from this recession, if we are to create meaningful numbers of new jobs, we need new industries and modern infrastructure. We need to recognize the limitations of capitalism, and adapt accordingly.

[youarenotfree]

09:18 AM on 10/30/2010

Capitalism is not the appropriate word, here. Progressivism is the problem. And, there is nothing "conservative" about big government or big spending. Much of the tea party's energy is the result of conservatism being abandoned during the Bush era and the outrageous spending.

Progressives in both parties who push for big government, big spending, big control over our lives and over business have gotten us into this mess. It is government interference with capitalism and free trade that is the problem. Government controls, regulation, taxation, the bureaucratic nightmares that they create are what stagnate growth and send corporations overseas. The push for a green economy and unions that demand unsustainable benefits could not have done more to drive away and prevent job growth.

It is congress that creates all of the laws that inhibit the growth of business and therefore jobs. And, it is congress that spends the money regardless of who the president may be. It was also congress that created the houses crisis by demanding that people who could not afford houses be given mortgages. Ask Barney Frank about that one.

The current progressive administration could not be more anti-business and anti-energy independence. They gave away millions to encourage oil drilling in gulf by Brazil and shut down drilling off our coast. Shutting down coal mining on US soil is on their hit list. Stop playing the presidential blame game. Its the men behind the curtain we need to flush out.

[TheCarCzarsPage]

12:02 PM on 10/31/2010

Yes, end so-called "Progressives."

[sideLineWatcher]

09:04 PM on 10/31/2010

Well said, Thank you.

[Marcus1]

11:41 AM on 10/29/2010

Much has been made of how Canada's economy has continued to do well even though many nations have not. It is in large part some responsible laws that make outsourcing very difficult for corporations and in particular the "Investment Canada Act" that only allows companies that bring a net benifit to Canadian communities.
The big difference in Canada is that our conservative party has not managed yet to fool people into thinking whats good for corporations is good for Canada as is the case in America where the people and the country are 2nd and 3rd class citizens to corporations. The citizens united ruling has made the U.S. march to facism that much closer.

[sideLineWatcher]

10:42 PM on 10/28/2010

I think Obama blew a really great opportunity to help this country. If he had made his number one priority Energy he could have gotten great gains in employment and reduced our dependence on foreign oil. Think about how many jobs could have been created if this trillion dollar stimulus package was directed towards our energy problem. It could have created jobs across the entire spectrum from engineering, project management, technology, all the way down to the proverbial mail room. It would also put America on track to being a leader in new energy sources and the technology to provide it.

[fortressfountain]

05:27 PM on 10/28/2010

I think all we are getting is lip service. There are too many people and not enough jobs.
So instead of drying up everyone's savings and social security to educate the young-it is best people hold on to what they have.
I think if cash were as big a problem as they say-the interest rate for savings would go up.
I think they are deliberately ruining our currency to establish a global currency.

[mommaV]

11:17 AM on 10/28/2010

Perhaps we should all read Animal Farm again. Does it really matter who is in political office?

[mssisyphus]

10:35 AM on 10/28/2010

What is even more disheartening is that our politicians seem to be oblivious to this growing problem.

They earn great pay (thanks to our tax dollars and their ability to give themselves raises), they have wonderful health insurance, perks that the average worker could only dream of, have a three day work week, weeks off for holidays most of us get a day for if we're lucky, and an amazing pension package after only five years on the job.

Gee, wonder why they are so out of touch with the real world?!?

[anniet27]

08:55 PM on 11/08/2010

Politicians, in fact, are well aware of jobs going overseas. They supported offshore trade policies without setting guidelines on the American balance of imports and exports. What we have now is the obvious intentions of most politicians to be "the best that corporate money can buy."

[MrBadExample]

08:06 AM on 10/28/2010

Re the 60 Minutes segment; one of the issues for older workers who've been displaced is that it's very difficult to re-enter their old field. The old saw about being 'overqualified' masks the real problem-- when interviewees have more knowledge and expertise about their given specialty than the person conducting the interview, the interview is a lost cause.

I've seen this happen time and again--senior level jobs are not opening up because the people in them have no place to go. And when those people have to interview for junior level positions, they don't want to hire people who have a resume with wide ranging experience.

[twistedboomer]

12:52 AM on 10/29/2010

they also tend to be more expensive and wise to the ways of corporate life. better to get someone new, young, a workaholic, someone just naive enough to believe, and will work for less without complaint.

The more things change the more they stay the same....

[Nym22]

07:43 AM on 10/28/2010

Wake me up when the class warfare riots break out.

[norkas]

07:14 AM on 10/28/2010

The fact that out sourcing good jobs in now the norm things will only get much worse.

Unemployment may go to 15% officially and in my opinion will and the stock market will reflect this reality.

Companies that have not outsourced as yet will because they understand this is very cost effective for their bottom line and they will jump on the band wagon fast!

This is not the fault of Republicans or Democrats but it is the people fault for not standing up and looking for resolutions such as reviewing our trade laws with many countries that are unfair and will result in a DOUBLE DIP recession.

[bresponsible]

06:41 PM on 10/30/2010

.
Check this out:

http://www.taxfoundation.org/publications/show/22917.html