Around 40% of U.S. citizens live with precarious financial-economic instability. The 40% figure occurs in multiple credible studies. This is a rundown of those studies: 40%, 40%, 40%, 40%, and 40%.
The Consumer Financial Protection Bureau's survey "Making Ends Meet" of November 2024 shows that 42.3% of households could not pay normal expenses after 30 days if they lost their main source of income. The U.S. Census's Pulse Survey reports that 45.6% report "very stressful" the price increases over the last two months in 2024. The United Way's report, ALICE, also says 42% live below their survival budget, which is around $91,000 per year for a family of four. The U.S. Census's Supplemental Poverty Measure, 2025, reports that 41.5% of U.S. households live with incomes below 200% OPL, official poverty level. The Brookings Institute reports, the "Percent of U.S. families with total resources below the family budget, by country and family structure" is 43%. ("How many are in need in the US? The poverty rate is the tip of the iceberg." (June, 2024) Over 40% of U.S. population experiences insecurity and financial hardship.
Repeatedly this portion appears -- 41.5%, 42%, 45.6%, 42.3% and 43%. This confirms a message about financial insecurity in the U.S.A..
We have extreme inequality, and a near majority of citizens experience hardship, insecurity, frustration, and stress. Wealth inequality is the most extreme. The RealTime Inequality web page shows the wealthiest 25,100 adults, the wealthiest 0.01%, possess an average of $617.8 million apiece, for a total of $15.5 trillion, which totals 11.5% of private U.S. wealth. Now, compare that with the least wealthy 50% of U.S. adults, about 125.3 million adults; they possess $9,000 each and a grand total of $1.1 trillion which is 0.8% of U.S. private wealth. The ratio between their average wealth ($9,000 to $617.8 million) is 1 to 68,000. For every $1 saved by half of U.S. adults the top 0.01% own $68,000.
If the average savings of half were $1, then the average for the sliver at the top would be $68,000. This is a healthy society? No, this is aristocracy.
Back to the precarious 40% -- living paycheck to paycheck is normal for many families. In addition to the 40% we can add another 20% who regularly carry their credit card balances forward each month and live paycheck to paycheck, we can call it 60%. The Bank of America claims that 25% of households live paycheck to paycheck; but the PNC Bank claims 67% -- so there is no firm consensus. The Pulse survey has a table about anxiety and worry (Health Tables, Table 1). The inability to control or stop worrying is also at the 44.7% level (see Health Table 1).
I try to report the accurate, factual conditions of the U.S. economy, and then I prescribe the solutions to this malady --- see my December 2024 essay at this blog. I lay out 10 big ideas. Our condition can be improved with quite a small number of major policy changes.
When Shaquille O'Neal enters a room the average height greatly increases. Having looked at wealth, now I'll focus on income; the average income looks nothing like the typical. It's almost comical. The average income for the lower half is $18,400, and the average for the top 25,000 adults is $41,800,000, a ratio of 1 to 2,271. For every dollar earned by the lowest-income 125 million adults, the top adults are earning $2,271. (see RealTime Inequality) Should there be a law against this? The Congressional Budget Office published in 2021 it's "The Distribution of Household Income for 2018". Exhibit One shows "Top 0.01%" earning $44.51 million and the lowest 20% earning $20,000. The ratio is 1 to 2,225, almost identical to the ratio RealTime finds for the lower 50%. Both studies show "Income Before Taxes and Transfers".
In Switzerland in 2013 voters were asked to impose a 1 to 12 ratio between lowest and highest salaries in Swiss corporations. You can read two articles here and here. It failed to pass by a 2 to 1 margin, but such policies have great promise.
Swiss workers enjoy 4 weeks of paid holiday, I learned from the second article. Most countries from Ghana, Brazil, Bangladesh to Germany receive paid holidays. But not in the U.S., no mandated paid holidays.
And, just in passing, recently I read a study comparing daycare for infants and children among 41 rich nations, "Where Do Rich Countries Stand on Daycare?". The U.S. is last among 41 nations.
These last paragraphs have been a little off-topic, admittedly; but they show that a quality life is not wholly determined by the highest GDP per capita. Lastly I'll compare Belgium to the U.S.; in Belgium, the Credit Suisse report on Global Wealth shows (page 144), 43.5% of all wealth is held by the top 10%. In the U.S. the top 10% own 73.5% of private wealth. Is life better in Belgium as a result of sharing the wealth? If the U.S. had this wealth distribution it would add $54 trillion to the net worth of 117 million families; that would add $464,000 to the net worth of all the families in the lower 90%. Life would be radically different. Distribution matters. Distribution matters.
To underscore the Belgium -- U.S.A. difference, the latest Global Wealth report shows (page 18) average adult and median adult amounts. Here's the comparison between the U.S. and Belgium:
Belgium U.S.
average adult wealth $349,404 $620,654
median adult wealth $253,539 $124,041 -- could be $447,000
median is 72% of average 20% of average
If the U.S. median was 72% of average it would be $447,000, a gain of $323,000 at the median.
I suggest readers tackle my Solutions essay. The last solution has to do with taxing wealth.
Would 42% of adults report they are unable to pay normal expenses after 30 days if they lost their main source of income if they had over $100,000 of net worth? Of course they would not.
The U.S. national income stands at $25.6 trillion shows the Federal Reserve's Flow of Funds report, page 10, January 9, 2026. Divide that by total households we arrive at the average income of over $191,000. As for wealth, total "household net worth" divided by all households shows average household savings at $1.355 million. The average and the typical are far apart. The typical or median household income is around $83,700; the median household net worth is $192,084 (see here).
Average income $191,000, median income $83,730. --------- the median is 44% of average.
Average household net worth $1,355,000, median net worth $192,084.
--------- the median is 14%of average.
The Credit Suisse bank's Global Wealth report shows the lower-saving 40% of U.S. households owned about 0.1% of the nation's wealth, which equals an average wealth holding of about $2,300 per adult (according to the Credit Suisse bank's Global Wealth Databook, page 143, year 2023). While the wealthier 10% own 68.1% says the Federal Reserve. The top 10% own 73.1% says the Credit Suisse report. And RealTime shows 71.5% is owned by the top 10%. Therefore the average savings for the top 10% is either $9.2 million per household or $10.1 million. The figures for the lower 50% of household vary, but one thing is clear, inequality in the U.S. is severe. Economic 'precarity' is well-known but few politicians propose serious programs to relieve it. Belgium has the lowest percentage of wealth owned by the top 10%, shows the Credit Suisse report. If the U.S. had the distribution of Belgium all households in the lower 90% would add $464,000 more to their net worth, to repeat myself.
Income Growth Over the Decades
How many know that men's incomes were only 1% higher in 2025 than in 1979? The total economy grew by 117% and men's incomes did not move at all. I think that this issue is the top concern for the U.S. nation.
Most workers had higher incomes in 1973 than in 2025. The "average weekly earnings of production and nonsupervisory workers", about 82% of all full-time workers and 83% of all workers including part-time workers, was higher in 1973 than in 2025. See the BLS web page. I have fallen into the habit of calling this a disaster.
The "Median usual weekly earnings" for full-time workers grew by 12% since 1979, shows the Federal Reserve's graph. See here. If their graph had extended to 1973 we would see a smaller gain than 12%.
The real wages for men have grown by 1% since 1979, shows this graph. The economy grew by 117%.
The real cost of housing has grown by 72%, from $238,400 to $410,700. The costs of housing, healthcare, higher education, and childcare are the main drivers of higher costs in general.
See this 2016 article by David Madland and the American Center for Progress.
While the overall economy since 1973, Real (inflation adjusted) per capita, increased by 142%.
The RealTime Inequality web page, a product of University of California, Berkeley economists, shows that from 1976 to 2023 great gains for a minority, virtually no gains for a majority. Between 1976 and 2023
the lower-earning 50% of U.S. adults saw their pre-tax incomes grow by $3,000, from $15,500 to $18,500.
The middle group, from 50% to 90%, incomes grew by $34,700 from $57,400 to $92,100.
The top 9%, from the 90th to 99th percentile, incomes grew by $146,000 from $123,000 to $269,000. The top 1% saw their incomes grow by $1,429,000, from $481,000 to $1,900,000.
Up $3,000, up $34,700, up $146,000 and up $1,429,000. The alarm sirens are shrieking.
Half saw a $3,000 increase, and 1% saw a $1,429,000 increase -- that in a nutshell is the problem.
The RAND Corporation also has two reports on Income Trends --
The first is here, the second is here. The first is far more detailed and covers years 1975 to 2018. The second is shorter and updates to the year 2023.
The latest RAND report states ". . . if we had the income distribution from 1975, the majority of workers (the bottom 90 percent by income) would have made an additional $3.9 trillion dollars in 2023." (page 4) |
With a worker base of 160 million, 90% is 144 million. Each of the 144 million would have $27,083 more income "if we had the income distribution of 1975". That is huge! The RealTime Inequality web page shows much the same income shift. I calculate a gain of over $30,000 for all in the lower 90%.
The Federal Reserve's web page shows the real national GDP per capita since 1973 increased by 142%.
Yet in the same 52 years years wages for 80% decreased by 2%. This is a sick economy.
There are other sites on the web that underscore this fact. Washington Center for Equitable Growth is dedicated to the phenomenon. It has an array of graphics well worth exploring, for example:
Now, I have to admit, if I were reading this essay I would never have read this far. All these really depressing numbers and facts. I apologize. I just want to hammer my point, because a hammer seems necessary. There are so many dull, stupid and lunatic deniers and indifferent even callous ignorers.
I'm really trying to hit someone on the head with a sledge hammer. I admit the abuse.
Look, it's no fun harping on this mess.
Make America Great Again does not mean giving big tax cuts to the wealthiest and cutting labor power, worker income, and household stability. The list is long explains a study from the Economic Policy Institute:
47 ways Trump has made life less affordable in the last year
That formula is MAW, Make America Worse
I usually say at this point: STOP, don't go further. So, again: stop. I'm going to add some more data, but I congratulate your forbearance , endurance, tolerance, and incredible fortitude for having survived this tirade of bad news.
Hope you enjoyed it at some level.
Let's get together and laugh a little, when we get our act together and stop fighting among ourselves. !!
Yours, Ben Leet. See my profile for a little more about me.
________________________________________________________________
Meanwhile, the following:
"Had that bottom 90 percent continued during the past half-century to make the same share of the national income they’d had in 1975, RAND calculates that by 2023 they would have made an additional $79 trillion. [over the period 1975 to 2025, Today the total private wealth stands at $180 trillion, for a comparison.] Just in the year 2023, they would have made an additional $3.9 trillion. As the size of the bottom 90 percent of the U.S. workforce is roughly 140 million people, that means that the average earner would have made about $28,000 more in 2023 than they actually did."
That's one paragraph from the American Prospect magazine article "The $79 Trillion Heist" by Harold Meyerson, December, 2025.
The RAND Corporation published "Trends in Income from 1975 to 2018" in 2021. Page 11 shows that in 1975 the median worker income was $42,000 and it grew to $50,000 by 2018. But had it grown at the rate of the total economy's growth rate it would have reached $90,000 -- an additional $40,000 per year for the middle or median worker. Would that make a difference in the quality of life? Would poverty be eliminated? Would America be Great Again? Not necessarily, but if not great, better. Author Meyerson got his $79 trillion figure from the RAND reports.
I calculate, using the web page RealTime Inequality, that the lower 90% of households would have around $30,000 more every year had the income growth of the lower 90% matched the overall growth of the total economy. This is quite a conceptual shift, the society would be improved -- poverty would be eliminated, insecurity, precarity, anxiety about income needs, etc., would be eliminated. The crime rate would drop, people toting guns in holsters in the supermarket would be eliminated. It would be a different USA.
We have the Economic Policy Institute, the MIT (Massachusettes Institute of Technology), and the ALICE survival budget; all give estimates of the minimum income needed for a four-person household.
The Economic Policy Institute’s Family Budget Calculator says $89,260 is needed for a family of 2 adults and 2 children.
The MIT amount is $$83,000.
The EPI Family Budget Calculator is $89, 260.
The ALICE amount is $96,480.
The U.S. Census Official Poverty Level is $32,150 for 2025 for a family of four, meaning it takes 3 times OPL to achieve the ALICE survival level. It takes 2.7 times to achieve the EPI's basic level. And 2.5 times to make the MIT level.
The ALICE 2022 survival budget is $96,480 -- they chose an example in Ohio, Franklin County. "For a family of four with an infant and a preschooler, the budget (including tax credits) increased from $75,156 to $91,284, more than three times the 2022 FPL of $27,750. Excluding tax credits, costs for a family of four totaled $96,480 in 2022, up from $90,360 in 2021."
In my search for a more detailed understanding of the labor market and pay levels, I look at the Job Quality Index from Buffalo NYU.
We see what the average nonsupervisory worker is earning (nonsupervisory workers total 111 million workers, or 82% of the full-time workers), We all see the average weekly pay (and yearly pay) for all 111 million, and also for the 45% who earn above the average for all, and we see the average incomes for the 55% who are below average for all -- currently the three are, respectively: $56,020 - average for all, and $76,544 the average for 45% and $38,786 the average for 55%. That covers 111 million non-supervisory workers.
$56,020 -- $76,544 -- and $38,786. The average for the higher 45% is about double the average for the lower 55%.
Two average low-wage workers will earn about $79,000. And if one is a part-time worker, then that household's income would be $20,000 plus $37,786, or $57,786/year. Both amounts are well under the survival budget of MIT, EPI, and ALICE.
And the total national income, says the Fed's Flow of Funds, recent Jan. 9, 2026 report: $25.613 trillion. Divide that by 134 million households: $191,000 average household income/year. And average wealth is $1.35 million per household (same report, see pages 10 and 2).
The Supplemental Poverty Measure, 2024, shows 41.5% of households have incomes below 200% (double) the Official Poverty Level (OPL). (page 12, Sept 2025 report for year 2024)
Moreover, the U.S. Census shows in the Pulse Survey of Sept. 2024 that 45.6% report "very stressful" regarding the "level of stress caused by price increases over the past two months". 45.6% report "very stressful", another 25.7% report "moderately stressful", and 21.8% report "mildly", and only 5.8% report "not at all". As a society we are not doing well.
Reinforcing this pattern is the "Making Ends Meet" survey from the Consumer Financial Protection Bureau of Nov. 2024. It reports that 42.3% of households could not pay normal expenses for more than 30 days, they "do not have the savings or ability to borrow to protect themselves from an income fall in the future" (page 18) Add to the list the Brookings report and the Pulse survey:
40%, 40%, 40%, 40%, 40%. Seems like a lot of agreement about "personal financial insecurity". Precarity -- Insecurity -- Anxiety!
Let me add something a little crazy. The CBO report on Income in 2018 has a graph, Exhibit One, that shows visually the incomes of different citizens. The top 0.01% are shown in a small box, below. If the graph had been true to facts the line showing the top 0.01% would extend about 24 inches off the right side of the page.
You see the top 1% extends to $2 million, but the top 0.01% extends to $44.5 million, about 24 inches off the right side of the page. Curious, isn't it. It's the 1 to 2,225 ratio I mentioned earlier. The lower-earning 20% earn $20,000, the top 0.01% earn $44,500,000. This is a 1 to 2,225 ratio. The average weekly earnings of 24 million part-time workers (15% of all workers) in 2024 was $380 per week, which is $19,760 per year. (See the BLS page) There are 24 million who earn 1/2,225th what the 25,000 (or 0.01%) multi-millionaires earn.
No comments:
Post a Comment