Reading propaganda like this might lead us to believe that the disparity is not so huge. But what you should read between the lines is the horrifying fact that 80 or 90% of americans are in serious financial straits. From their own ‘corrected’ figures, the Heritage Foundation reports that 80% of american households have incomes below $80,000. That seems like a fortune to most americans, but it’s barely enough to pay rent and buy groceries in New York City or San Francisco. In my ‘middle class’ town, the mortgage, our health, home, and car insurance, and property tax slurps up about $52,000 a year, and I’m cheap to the bone. Most of my neighbors are in for $60,000 or more, before they step out the door for groceries.

From David Cay of the NY Times, we learn that the minimum income for the top 1%, about 3,000,000 americans, is only $348,000. This means the bottom 19% of the top 20%, about one fifth of america’s population, makes somewhere between $80,000 and $348,000. That’s a range between ‘mostly comfortable’ and ‘almost wealthy’, but it’s chump change for the jet set. (And it’s not what investment bankers make either, their average income is $435,000. But that’s another story.)

Carefully overlooked by the Heritage Foundation’s logic is the astonishing fact that about 3,000,000 americans, the top 1% of earners, have a combined income equal to the bottom 50% of earners, about 150,000,000 citizens.

Let’s say that again, 1% of americans, rake in about 1.5 trillion dollars, which is as much money as half the population, 150 million people, make combined. These very round numbers are right from the Heritage Foundation calculations and 2005 income statistics.

Those numbers are so incredible, I have to take one more poke at them. 1.5 trillion is 1.5 times 10 to the 12th, that is, $1,500,000,000,000. So, In the US, 3,000,000 people earn about 5 million each. At the other end, 150,000,000 Americans, half the population, earn about $10,000 each. Their combined totals are equal.

Since Health and Human Services sets the 2006 poverty threshold at $10,210 for an individual, does that mean that a quarter of our citizens are on or below the threshold of poverty? Not quite, since a household of two has a poverty threshold of only $13,690. For example, a two earner household, with each earning $7,000, would be above that poverty line.

2007-10-18: Since I wrote this I’ve realized that looking at the richest 30,000 people (0.01%) in the country better illustrates the issue. Paul Krugman, in 2006 wrote

…More broadly, right-wing commentators would like you to believe that the economy’s winners are a large group, like college graduates or people with agreeable personalities. But the winners’ circle is actually very small. Even households at the 95th percentile — that is, households richer than 19 out of 20 Americans — have seen their real income rise less than 1 percent a year since the late 1970’s. But the income of the richest 1 percent has roughly doubled, and the income of the top 0.01 percent — people with incomes of more than $5 million in 2004 — has risen by a factor of 5.