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<\/a><\/p>\nPulitzer 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.
\nA 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.
\nThe 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.
\nIn 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 \u2013 the Canadian ratio is 8.9 percent.
\nIncome inequality figures would be much worse except that:
\n\u2022 Women moved into the workforce, most households have two incomes
\n\u2022 We\u2019re working 500 hours a year more than in 1979
\n\u2022 Households drew down savings and borrowed against the equity in their homes to maintain living standards
\nYet even after all this\u2026
\nU.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.
\n\u201cThe 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.\u201d Ex-Labor Secretary, Robert B. Reich \u2018The Rich Get Richer Through the Recovery\u2019<\/em>
\nWhat is causing the rising inequality of incomes and wages?
\n\u201cExecutives 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.\u201d 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.<\/em>
\nFrom \u2018CEO Pay in 2012 Was Extraordinarily High Relative to Typical Workers and Other High Earners\u2019 by Lawrence Mishel and Natalie Sabadish we get the following:
\n\u2022 From 1978 to 2012, CEO compensation measured with options realized increased about 875 percent, a rise more than double stock market growth and substantially greater than the painfully slow 5.4 percent growth in a typical worker\u2019s compensation over the same period.
\n\u2022 Using the same measure of options-realized CEO pay, the CEO-to-worker compensation ratio was 20.1-to-1 in 1965 and 29.0-to-1 in 1978, grew to 122.6-to-1 in 1995, peaked at 383.4-to-1 in 2000, and was 272.9-to-1 in 2012, far higher than it was in the 1960s, 1970s, 1980s, or 1990s.
\n\u2022 Measured with options granted, CEOs earned 18.3 times more than typical workers in 1965 and 26.5 times more in 1978; the ratio grew to 136.8-to-1 in 1995 and peaked at 411.3-to-1 in 2000. In 2012, CEO pay was 202.3 times more than typical worker pay, far higher than it was in the 1960s, 1970s, 1980s, or 1990s.
\n\u2022 Over the last three decades, CEO compensation grew far faster than that of other highly paid workers, those earning more than 99.9 percent of other wage earners. CEO compensation in 2010 was 4.70 times greater than that of the top 0.1 percent of wage earners, a ratio 1.62 higher (a wage gain roughly equivalent to that of 1.6 high wage earners) than the 3.08 ratio that prevailed over the 1947\u20131979 period.
\nAccording 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.
\nThat\u2019s $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:
\n\u2022 Canada – 204
\n\u2022 Germany – 147
\n\u2022 U.K. – 84
\n\u2022 Japan – 67
\nThe average U.S. worker makes $35,204 a year. The CEO at 327 of America\u2019s biggest corporations works 5 hours to make what the average American worker makes in a year.
\nThat\u2019s average salaries I\u2019m using, not median, which would of course be much lower – the average salary includes large white collar pay checks.
\nThe 100 top-paid CEO\u2019s of companies listed on the Toronto Stock Exchange\u2019s composite index were projected to earn, by noon of the first working day of 2012, $44,366. That\u2019s quicker than in 2009 when they had to sweat it out till 2:30. The average Canadian\u2019s salary was $47,200 in 2012.
\nConclusion<\/strong>
\n\u201cThe 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.\u201d Paul Krugman \u2018For Richer\u2019 The New York Times
\nKrugman\u2019s article, although dated October 2002, is a must read.
\nDeng Xiaoping, who was China\u2019s first leader after Mao said \u201cSome should be allowed to get rich first.\u201d 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.
\nThe air stinks when you\u2019re 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\u2019s (or the bearded wonders on Duck Dynasty) latest escapades keeps the herd enthralled and complacent and the circus plays on.
\nYou need to become an outside the herd animal and put your family\u2019s financial health and safety on your radar screen.
\nIs getting ahead of the herd on your radar screen?
\nIf not, it should be.
\nRichard (Rick) Mills
\nRichard is the owner of Aheadoftheherd.com and invests in the junior resource\/bio-tech sectors. His articles have been published on over 400 websites, including:
\nWallStreetJournal, USAToday, NationalPost, Lewrockwell, MontrealGazette, VancouverSun, CBSnews, HuffingtonPost, Londonthenews, Wealthwire, CalgaryHerald, Forbes, Dallasnews, SGTreport, Vantagewire, Indiatimes, Ninemsn, Ibtimes, Businessweek, HongKongHerald, Moneytalks and the Association of Mining Analysts.
\nIf you’re interested in learning more about the junior resource and bio-med sectors, and quality individual company\u2019s within these sectors, please come and visit us at www.aheadoftheherd.com<\/a>
\nIf you are interested in advertising on Richard\u2019s site please contact him for more information, rick@aheadoftheherd.com<\/a>
\n***
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\nThis document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment.
\nRichard Mills has based this document on information obtained from sources he believes to be reliable but which has not been independently verified.
\nRichard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Richard Mills only and are subject to change without notice. Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission.
\nFurthermore, I, Richard Mills, assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information provided within this Report.<\/p>\n","protected":false},"excerpt":{"rendered":"