For Progress America Is Dropping The Middle Class

For Progress America Is Dropping The Middle Class

The US Social Security Administration recently finished calculating the average wage in the country at the end of 2020. Local nongovernmental experts and the media not controlled by Democrats, the released data, to put it mildly, did not please and even made them talk about the imminent disappearance of the middle class in America. And although in fact this process began by no means yesterday, it is difficult not to notice that against the background of the coronavirus pandemic and the specific socio-economic policy of the American authorities, it has accelerated sharply.

It must be said that the average wage indicator is used by the State Social Security Administration to calculate the corresponding index (AWI – average wage index), on the basis of which the salary previously received by the employee is indexed to calculate pensions for old age, survivorship and disability, and the maximum wage level is calculated from which social contributions are withheld, and so on. That is, it is not a “lamp-off” indicator, but a basic one for the US social security system.

It turned out that the total amount of salaries paid in the United States (which, however, include tips and other similar income received in direct connection with the workplace) in 2020 was $ 8.9 trillion, and received it by 167.6 million workers. At the same time, the average salary increased by 2.8% compared to last year and reached 53.4 thousand dollars per year, or 4448.5 dollars per month. True, all this is before taxes, social contributions and all kinds of insurance (not to mention real estate tax, for example), which in the United States make up a fair share of income. Nevertheless, against the background of official inflation for the year at 1.4%, everything seems to be very positive.

And even more so, such a salary looks impressive against the background of most other countries. In Russia, for example, in 2020 the average salary was equivalent to $ 708, in Belarus $ 500, in Ukraine $ 460. But you need to understand that these are nominal values, and the dollar has different purchasing power in different countries. If we recalculate average salaries in terms of purchasing power parity, which is calculated by the World Bank, then the difference even between Ukrainian and American will not be tenfold, but only 2.6 times. The average Russian salary will be half that of the American one, and so on. It is also worth repeating that we are talking about salaries before the payment of various mandatory payments: after them, the gap will become even smaller. By the way, the average salaries in a number of European countries – Denmark, Switzerland, Norway, Austria, Germany – are higher in nominal terms than in the United States. But again, taxes in these countries are usually higher, and you can buy with a dollar in most cases less than in the States.

But something else is more important: according to published data, 71% of those who worked last year, and this is no less than 119 million people, received a salary below average.

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Even more telling, 50% of American workers earned $ 34,600 or less last year. That is, the median “dirty” salary in the country was only $ 2883 per month, and half of the people earned less than that. Every third working American earned in 2020 on average less than $ 1,666 per month, which in American conditions means utter poverty. At the same time, one in five earned less than $ 833 per month, which is tantamount to poverty. And only 7.5% of working Americans receive a “dirty” salary of ten thousand dollars a month.

Yes, of course, there are a large number of social assistance programs in the United States, and 2020 was generally marked by an incredible number of so-called helicopter money distributions – payments from the state for nothing, which were designed to support falling demand during a pandemic. So the majority of even the poorest Americans, with the possible exception of antisocial elements, do not face the threat of starvation.

However, in general, both for the economy and for society, this is a dubious benefit.

Firstly, such payments give rise to dependency and discourage the desire to work, especially since often government payments were quite comparable to salaries for low-skilled labor. This, in turn, distorts the labor market, destroys the social structure of society, increasing the share of the poorest strata, and so on.

For Progress America Is Dropping The Middle Class
For Progress America Is Dropping The Middle Class

Secondly, the distribution of unsecured money inevitably causes inflation. Yes, earlier the United States became adept at skillfully exporting inflation to other countries, containing it (albeit largely due to manipulation of calculations), which is based on the fact that the dollar is not only the American currency, but also the world money. Which not only serve the flows of goods and services between other countries, but are also used in different countries of the world as a means of accumulation. But now the dollar machine is working so furiously that the inflationary tsunami covers the whole world, including the United States: according to the latest official American data, inflation in America has reached 5.8%, and the Federal Reserve System has already stopped pretending that high inflation will be a short-term phenomenon. …

But back to the median wage problem. In 2020, it grew in the United States by only 1.06%, that is, below the official inflation rate. This means that, even according to official data, at least half of the workers with lower wages have a real income decline in 2020. One could blame the pandemic and the associated crisis. However, according to other data from the Social Security Administration, the problem is long-term, and its roots go back 30 years, if not more. In 1990, the ratio of the median salary to the average was 72.1%, after which it began to decline steadily. In 2020, this ratio is already 64.8%. Even in countries that are not the most prosperous in terms of income distribution, such as the aforementioned Russia or Ukraine, the ratio of the median salary to the average is about 70%. In Belarus – 72%.

For America, such a noticeable drop in the ratio of the median wage to the average means not only a deepening of the gap in incomes now also between employees and not only an increase in the proportion of the poor among them. It is also direct evidence of the gradual disappearance of the broad stratum of the middle class on which the American state and society has relied since the Second World War. And which, by the way, was a bright and skillfully promoted worldwide example of the superiority of the American way of life.

Apparently, the time has come for the United States for other bright images, but it is not a fact that they will be equally attractive to other countries.

Source: BBC

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