Wall St. Worker? Daily Journal? Daily Wall-ker?
My last post on income inequality was so much fun, I thought I’d do another. It’s not the same old drill about how we have the greatest level of income inequality in the western world. It’s not even about how the gap between the highest and lowest earners has widened. No, today I’d like to point out that middle class earners spent much less money last year. “Households in the middle fifth of the population sliced their average annual spending” in 2009, a decline of “3.1% from 2007 and 3.5% from 2008, the steepest one-year drop since records began in 1984.” The wealthy, the top fifth of consumers, also tightened their belts, as the pols like to say, to tune of a 2.6% decline since 2007. Don’t worry, there were some spenders out there.
Meanwhile, the poorest Americans spent more as prices for necessities like food and rental housing climbed. Spending rose 5.6% from 2007 to 2009 for the poorest fifth of consumers, the most of any other income group, despite a 5.5% drop in after-tax income to an average $9,956 a household. In some cases, elderly people and others with low incomes dipped into savings or relied on credit to get by.
‘What you’re looking at here is people at the bottom trying to hang on,’ said Timothy Smeeding, public affairs professor and director of the Institute for Research on Poverty at the University of Wisconsin in Madison. ‘You can’t go below a certain level.’ …
The lowest earners spent 15.4% more on food last year than in 2007, shelling out more for cereals, meat and processed vegetables. Since many in the lowest income group may already rely on discount shops and make few discretionary purchases, it can be difficult for them to scrimp.
Among the poor, rent expenditures increased 5.3%. Those who managed to stay in homes they owned saw their mortgage payments rise 27.8%, suggesting that policy makers’ efforts to reduce mortgage-debt burdens aren’t reaching the most needy. Across all income groups, mortgage payments were down 7.6%.”
Before anyone goes ballistic because I pointed out that it’s not good for us to have high poverty levels as the wealth of this country gets more and more concentrated, let’s consider the source of the above information. Though they take the trouble to note that it’s difficult for the lowest earners to feed and house themselves, and even mention a needed government program, this didn’t come from the Daily Worker. It’s straight outta the Wall St. Journal, people. But we all know how socialistical they are over there.