Income and prices 1983 vs 2007

[sabbat hunter]

In 1983 Median US salary was $20,885. In 2007 the median US salary was $50,233.
In 1983 the median cost of a new home was $75,300, in 2007 the median cost of a new home was $247,900
In 1983 the avg price of a new car was $10,640 in 2007 the average price was $27,958.

Why these figures, I am trying to show how income levels have not kept up with the price of major ticket items in the last 25 years or so. Income rose 140%. New home prices rose 229%!!!
New car prices rose 162%.

This is a big sign of what the problem is here in the US. Incomes are not keeping up with major ticket prices. But we are seeing an increase in the top 5% of incomes that is far higher than the median.

In 1983 the top 1% salary median was $103,820 in 2005 it was $348,000. an increase of 235%.

What you are seeing is that the incomes of this country since the Ronald Reagan have shifted upwards. That the top 1% are getting richer, the middle income getting squeezed out.

So of course the top income people are paying a greater % of the taxes now, it is because more of the income is concentrated in that top 1%. How can we fix this is the question that I am leaving open to everyone to respond.

[Angry Dragon]

1. Yes.....no surprise

where ever you go you see the same written about in many news articles. They are not paying more taxes, their rate has dropped more than the bottom rate has dropped. There is someone that posts here with a graph showing how much rates have dropped for the top over the course for years.

Change the tax rates back to where they were. I read someone post here saying tax the money not the people. If I am making more money I should pay a bigger share because I can better afford to and I an benefiting more than the next guy.

[kenny blankenship]

2. The gap between wages and prices is filled by credit.

In the early 1960s the average household had about 3.8 times more debt (mortgage, carpayment, etc.) than annual income. In the late 1980s that sprang up to about 7 times more debt than annual income. At the end of Bush's first term that ratio had risen to over 10 times more debt than annual income.

Of course the wonderful miserable thing about debt is it has to be paid back with interest. You can take on a lot of debt, if you're certain your income will rise in the future. That's gambling and generally speaking gambling is stupid. A generational trend of rising debt in a nation state is a trend that is certain to end, and when it does there will be a horrible crunching sound echoing from one end of the country to the other, and a sudden drop for all still locked inside.

[CTD]

3. 2007 was the peak of the housing bubble. As for car prices...

What people buy as the *average* car has gotten much more upscale in those 25 years. That car prices have only gone up 22% faster than incomes is actually remarkable considering what is going into the *average* new car today - both in terms of safety equipment as well as luxury features.

Today's Toyota Camry or Honda Accord is vastly superior to 1983's BMWs, Mercedeses or Cadillacs.

[Sinti]

4. To fix this you have to break

the multinational monopolies into tiny little pieces, and step on a lot of shareholder's toes.

[Warpy]

5. Wages have been losing purchasing power steadily since 1969

which, coincidentally, was the year liberals last went out of power.

For a while, they kept the economy afloat on easy access to credit. People could achieve the middle class lifestyle of their parents by going deeply into debt.

Now the bills are coming due and nobody's got the wherewithal to pay them. Assets have lost value and jobs have disappeared. Wages are too low and people are terrified that they're also temporary.

And they wonder why the consumer is not spending. Ha!

[HughBeaumont]

6. Factoring inflation, incomes didn't rise all that much in 25 years.

http://journals.democraticunderground.com/HughBeaumont/86

$20,885 a year in 1983 is 42,800/yr (approx) in 2009 dollars.

America collectively hit a negative savings rate during the Bewsh/Cheney years. The middle/working/poor classes are being priced out of basic rights.