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

Unemployment

First Posted: 10/25/10 01:22 PM ET Updated: 05/25/11 07:05 PM ET

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

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Filed by T.J. Ortenzi  |