Prepared and paid for by Swanson for Attorney General, P.O.Box 7066, St. Paul, MN 55107.
The Nov. 8 item, for example, begins:
People have been very kind to me as it relates to these communications, the purpose of which is to give you my thoughts concerning some of the challenges we face as a society. I don’t think a barrage of emails asking for money does the trick.
There has been a lot of commentary about the income gap and wealth gap in America. While many of the solutions need to be initiated at the federal level, we must roll up our sleeves at the state level to do what we can to build a stronger middle class. This paper—which is the first in a series—starts by defining the problem.
I should note that I was appointed as Chair of the Federal Reserve Board’s Consumer Advisory Council in 2006. I was appointed to the Council by Alan Greenspan. I quickly realized that we saw the economic problems of America through different lenses. Let me give you my perspective.
The Ownership Society and Economic Flotsam
The Income Gap. When I was a child in the 1960s, almost 55% of U.S. households fell into the category of “middle class,” earning in today’s dollars $35,000 to $100,000 per year.[1] Today, about 45% of all households do. The statistics do not show the real change, however, in large part because other members of the household have been added to or stayed in the workforce since the 1960s.
First, women in large numbers entered the workforce in the 1970s, 1980s, and 1990s. Median household income rose even though the incomes of individuals did not. The climb ended in 1999. Since then, median household income has fallen.[2]
Second, a significant share of middle class households—approximately 20%—are now headed by people over age 65. Some have higher income than their children due to retirement savings and pensions. Many have not left the labor market. Middle class households in this age group have more than doubled since 2000. But older Americans are getting pinched due to rising pharmaceutical and health care costs, not to mention housing.
The Social Security Administration recently calculated the salaries of the median employee born in each year since 1932. A typical 27-year-old man’s annual salary in 2013 was 31% less than a typical 27-year-old man in 1969.[3]
The Wealth Gap. Income inequality is a major cause for erosion of the American middle class. But the wealth gap also undermines upward mobility.
Look at the statistics. According to the Federal Reserve, the wealthiest 5 percent of American households held 54 percent of all wealth in 1989.[4] Their share rose to 61 percent in 2010 and 63 percent in 2013. By contrast, the rest of those in the top one-half of the wealth distribution—families with a net worth between $81,000 and $1.9 million in 2013—held 43 percent of wealth in 1989 but 36 percent in 2013.[5]
The lower one-half of households held just 3% of wealth in 1989 but only 1% in 2013. These 62 million households had an average net worth of $11,000. One-quarter of these families reported zero wealth or even negative net worth.[6]
Put differently, the richest 1% own 40% of the nation’s wealth. The bottom 80% own just 7%.[7]
These matters are nationwide issues; not constrained to any single state.
From that perspective, this is a quick post in hope and anticipation of seeing sooner rather than later a footer about "for United States Senator."
There is that vacancy. More, later.