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gruffydd

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"Compensation on Wall Street has seen a substantial recovery since declines in 2001 and 2002, though average compensation has not yet reached the peaks of the stock market boom of the late 1990s and 2000. However, the much-touted economic recovery of the past two years has not led to gains for the broad majority of the population.

There has been no substantial improvement in the jobs market over the past two years. The remaining sectors of the economy that have had relatively high-paying and secure jobs—such as the auto and the airline industries—are seeing a sustained assault on wages and benefits.

According to a US Census Bureau report released on August 30, the number of Americans living in poverty increased in 2004 by 1.1 million. The poverty rate, now 12.7 percent of the population (37 million people), has increased for four consecutive years from 2000 to 2004. Even this figure understates the level of poverty in the US, as the official poverty level is much lower than the income required to meet basic needs.

Other figures also document the precarious financial position of growing number of Americans: rising debt levels, persistent unemployment and underemployment, rising requests for emergency food assistance and increased homelessness.

Real income has declined over the past year for most workers, who have seen stagnating or declining nominal wages together with a sharp growth in consumer prices, especially for energy. The situation is expected to get much worse as the winter months produce home heating bills that are up to 50 percent more than the already steep prices of last year."

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There are also nearly 9 million households (~30M people) who have assets of $1M or more (not including their primary residence). This is an 8% increase over the previous year, which saw an unprecedented 33% increase! There is also a growing number of people (~75M) with assets between $100K and $500K.A 3% increase over last year. I would personally not call someone with $100K "emerging affluent". Sensible, yes. Affluent, no.

Society splitting down the middle.

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I take the point made about the rich/poor divide but to play devils advocate for a mo, "poor" or "poverty" in the US (or UK for that matter) is not "poor" or "poverty" in, say African terms. I have a problem with people who are apparently "in poverty" here in the UK according to the liberal/leftie anti capitalist foundations yet who have big council houses, high social security payments etc and more net disposable income, Sky tv, shopping etc than many hard working types.

Society has always been split between wealthier and poorer - yes the "gap" is getting wider BUT its also getting "flatter" in that more people are in the "middle" now proportionately.

The problem is that with inflation and interest rates in existence the (top and bottom of the) rich poor divide will always widen whetever you do - for example two people with different amounts of money will gradually move apart relative to each other in absolute terms:

A has £1000

B has £100

C has £10

Each earns 10% interest a year on his money.

A now has £1100

B now has £110

C now has £11

As he did originally, A still owns 100 times the money that C has but the absolute difference in amounts owned has gone up by £99 (ie £1089 vs £990). Add in inflation and other factors and you will always increase this. My simplistic view is that worrying about the "rich poor divide" as such is a silly measure suited to certain personal/political agendas.

The better measure is absolute poverty - whatever that is, just make sure people are above that. There is no law that says that in order not to be "poor" one must have income/money proportionate to someone wealthy.

Edited by Tempest

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if you get out of the big cities and towns in the usa you see this so called poverty belt.

they are not starving, rather living a life of square wonderbread and poor tv meals.

its not desperate, but its not a great life either. really shabby tv and boredom.

though on the plus theres good eatin' and no self respecting southerner would eat instant grits.

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if you get out of the big cities and towns in the usa you see this so called poverty belt.

they are not starving, rather living a life of square wonderbread and poor tv meals.

its not desperate, but its not a great life either. really shabby tv and boredom.

though on the plus theres good eatin' and no self respecting southerner would eat instant grits.

Real incomes for the poor have decreased in the USA in the last 20 years. They were poor and are now even more so.

Tempest:

Using your example it is more like

A. was $1000 now $1200

B. was $100 now $110

C. was $10 now $10.50 ($9.75 in real terms)

It is a big problem in the US. So much so that people like Bill Gates and Warren Buffet have asked the government to introduce death duties and other progressive wealth taxes.

Edited by gone west

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I take the point made about the rich/poor divide but to play devils advocate for a mo, "poor" or "poverty" in the US (or UK for that matter) is not "poor" or "poverty" in, say African terms. I have a problem with people who are apparently "in poverty" here in the UK according to the liberal/leftie anti capitalist foundations yet who have big council houses, high social security payments etc and more net disposable income, Sky tv, shopping etc than many hard working types.

Society has always been split between wealthier and poorer - yes the "gap" is getting wider BUT its also getting "flatter" in that more people are in the "middle" now proportionately.

The problem is that with inflation and interest rates in existence the (top and bottom of the) rich poor divide will always widen whetever you do - for example two people with different amounts of money will gradually move apart relative to each other in absolute terms:

A has £1000

B has £100

C has £10

Each earns 10% interest a year on his money.

A now has £1100

B now has £110

C now has £11

As he did originally, A still owns 100 times the money that C has but the absolute difference in amounts owned has gone up by £99 (ie £1089 vs £990). Add in inflation and other factors and you will always increase this. My simplistic view is that worrying about the "rich poor divide" as such is a silly measure suited to certain personal/political agendas.

The better measure is absolute poverty - whatever that is, just make sure people are above that. There is no law that says that in order not to be "poor" one must have income/money proportionate to someone wealthy.

The measure of "poverty" is a family of 4 living on less than $18k. Agreed, its not Africa poverty, but you try raising a family of 4 on £200 a week!

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HPI millionaires are theoretical. As Mervyn King of the BoE reminds us: House prices are a matter of opinion whereas debt is real.

I lived in the US for the last 15 years and have seen first hand the new class of house rich. They are broke apart from their notional house values. Most have huge mortgages and pay 1.25% in local property taxes (California) plus another .5% for other local amentities. On the "average" 1 million dollar home thats about $17,500 a year in property taxes. The median income in Southern California is around $58,000--the average house price around $480k. Not so good is it?

BTW, the ARM rate (adjustable mortgage rate) in the US is now around 6.5%--it was half that two years ago and all those people who bought then on cheap money are feeling the pain right about now--especially as property taxes are due in November at around 1.25-1.75% of purchase price.

Millionaires? How about taking liabilities into account in that equation?

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  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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