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Tags: Forbes | Americans | economy | worse off

Forbes.com: 90 Percent of Americans Are Worse Off Today Than They Were in Early 1970s

Forbes.com: 90 Percent of Americans Are Worse Off Today Than They Were in Early 1970s

By    |   Tuesday, 26 April 2016 07:07 AM

A new study released by The Levy Economic Institute found that 90 percent of Americans earn roughly the same real income today as they earned back in the early 1970s.

Economic stagnation didn’t reach the remaining 10 percent of the population, which has seen a sharp rise in their real incomes (income adjusted for inflation) over the same period, according to the study.

“Simply put, for the vast majority of Americans, the dream of a better life was lost back in the early 1970s,” explains Forbes Contributor Panos Mourdoukoutas.

“The shift in income distribution became worse in the aftermath of the Great Recession, which brings up the second suspect: the ultra-low interest rate monetary policy, which boosted the prices of stocks and bonds, benefiting the top 10 percent, which was very likely to own these assets,” he wrote.

“It should therefore come as to no one’s surprise that so many people are rallying behind Donald Trump and Bernie Sanders who blame both globalization and Wall Street of depriving them of the dream for a better life.”
 
To be sure, a Federal Reserve official recently said the United States is no longer the top country for achieving the American Dream.

“While income mobility in the United States has been relatively unchanged, it remains well below several other nations,” New York Fed President William Dudley said in a speech about economic opportunity and income mobility.

“The probability of moving from the bottom quintile to the top quintile is 7.5 percent in the United States, as compared to 11.7 percent in Denmark and 13.5 percent in Canada — two countries with relatively high levels of intergenerational mobility.”

“So effectively the chance of achieving the American Dream is not the highest for children born in America,” said Dudley, a permanent voter on policy.

“Broadly, the economy’s potential growth rate depends on effectively investing in and taking advantage of all of the resources in the economy — in particular, we need to achieve the full potential of the human capital of all Americans,” Dudley said.

“For the United States to reach its maximum economic potential, all Americans must have the opportunity to reach their potential,” he said.

© 2022 Newsmax Finance. All rights reserved.


StreetTalk
A new study released by The Levy Economic Institute found that 90 percent of Americans earns roughly the same real income today as they earned back in the early 1970s.
Forbes, Americans, economy, worse off
361
2016-07-26
Tuesday, 26 April 2016 07:07 AM
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