Wage-based incomes continue to decline, according to the U.S. Commerce Department’s April 2011 report.
Using data from February 2011, the report found that wages, benefits and salaries accounted for 75% of total personal income in 1970. This fell to 67% in 2005 and to 64% in 2010. At the same time, spending from the middle class has dropped from 85% in 1970 to 61% today, according to the Wall Street Journal (March 28, 2011, C1, page 1.)
Another report from the United Nations Human Development Index shows the gross domestic product isn’t necessarily the be-all and end-all measurement of economic health. In addition to income, the Index looks at measures of health and education. In 1980, the U.S. was number one in the income ranking.
Today, the U.S. is ranked number four in a global “well-being” index which measures the quality of life. The U.S. is ranked behind Norway, Australia, and New Zealand.
What has changed is that, for the first time, the rankings were also filtered for inequality, gaps between rich and poor. Consequently the overall Human Development Index fell by about 11%, which is quite significant, dropping the U.S. from 4th to 13th in the world. , Tamara Draut, who tracks U.S. income inequality and says “The middle class has lost ground and lower income households have just been clobbered. That is the story of the last couple of decades.”
America’s record on education, on the other hand, has helped its ranking on the Index.
Source: Nov. 4, 2010 Market Place, Public Radio