Average American Family Incomes are Inadequate Compared to Rising Inflation.

The average US family income has become increasingly unstable over the last three decades. During the early 2000s, almost one in ten American adults below the age of 65 had an income drop of 50% or more.

In 1990, the Federal Reserve reported that the richest 1% of America owned 40% of its wealth.

In 1945, personal income tax for the top tax bracket was 91%. By 1991, that figure had decreased to 31% personal income tax paid by those in the wealthiest tax bracket.

Based on US income growth charts, when the top bracket rates were truly high during 1950 to 1978, American income grew at approximately the same pace for all levels.

Those figures show the effectiveness of a progressive tax system.

When the tax system stopped being progressive during the 1980s, the median income of the very wealthy began to rise while the income of the poor and middle class began to fall.

Economists have a chart, called the Gini Index, which indexes the inequality of incomes between the rich and the poor or middle class American citizens.

The Gini Index shows that the disparity and inequality between the rich and the average Joe in American continued to grow and widen between 1979 and 1992.

As sobering as those statistics are, the fact is that things have gone steadily downhill since then for the average American family incomes.

The total earnings of the average US citizen earning less than $50,000 a year, which accounts for 85% of all Americans; increased by 2% a year from 1980 to 1989.

This did not even begin to keep abreast of inflation.

The Rich Got Richer while the Poor Got Poorer

During the same time period, between 1980 and 1989, average wages of all US millionaires shot up 243% a year.

In 1980, a corporate CEO earned 30 times more than the average factory worker. By 1991, this same corporate CEO earned 130-140 times more than this same factory worker.

This astronomical rise did not come from increased corporate profits. It came, instead, from a bigger slice of the profits.

What’s wrong with this picture?

The rich got richer while the poor got poorer—a sad commentary on the average American family incomes.

The Top 1% owns More than the Bottom 90% Combined

In spite of rising health care costs, energy and education costs, plus inflation straight across the board in every area of the cost of living, the minimum wage was frozen for almost a decade.

This wage freeze had a very adverse effect on average American family incomes.

This was the longest period of time without a raise in the minimum wage in American history.

In 1963, based on 1992 dollars, the minimum wage was 35% more. This means that a worker earning minimum wage in 1963 had 35% more buying power than a worker earning the minimum wage in 1992.

It is clear to see that the average American family incomes have not kept up with inflation and the cost of living.

The result of this shocking inequality of wealth and income between the top 1% of the very rich, whose incomes are more than the rest of the 90% of the US population combined, is that the middle class is being driven into serfdom by the very rich and the elite few who control the wealth in the US.