Facts & Figures: Class Counts: Education, Inequality, and the Shrinking Middle Class By Allan Ornstein 1. “The U.S. borrows $2.1 billion everyday to pay its debt, and the average American household is carrying more than $9,000 in credit card debt. Today’s so-called middle class families, with two-working spouses are in worse shape financially- they save less and owe more- than a single-income and middle-class family of 30 years ago.” (p. 30) 2. “Real income for the bottom 50 percent of the U.S. populace over the last 25 years has remained relatively flat and the bottom 20 percent has experienced a slight decline. The top one percent experienced a sevenfold increase of income during the same period.” (p. 31) 3. “As many as 69 percent of American taxpayers (92 million people) earned less than $50,000 in 2003. The average adjusted income, after expenses and lineitem deductions, for this group was $19,512-not very much money left to pay for food, transportation and clothing.” (p. 78) 4. “Tuition at community colleges averaged $2,191 in 2005-06, and they enrolled 46 percent of all undergraduate students attending college. Tuition at private colleges, including room and board, averaged more than $31,000. The community college is becoming the forced-choice among students of moderateincome; nonetheless, their fundraising ability accounts for less than one half of one percent of all private funds donated to colleges. One likely reason is that a class bias exists in the business and philanthropic community helping to perpetuate a two-tier system of higher education.” (pp. 81-82) 5. “U.S. production is peaking. China and India each graduate four to one more scientists and engineers than the United States, indicating where tomorrow’s innovation and inventions will come from: Even worse, there is now reverse “brain drain” from the West to East, as foreign science/math students graduate from college and leave the U.S. and follow the lure of economic opportunity back to the East.” (pp. 95-96) 6. “In 1980, the top one percent in the U.S. owned 21 percent of the nation’s wealth. By 2005, they owned 35 percent, equivalent to what the bottom 95 percent owned. In 1980, the same top one percent earned 8.2 percent of the U.S. income; in 2005, they earned 22 percent, equivalent to what the bottom 50 percent (150 million Americans) earned.” (p. 140) 7. “Between 1979 and 2000 the after tax income of the richest 1 percent climbed 201 percent. Among the middle fifth it increased 15 percent, and among the bottom fifth it increased 9 percent. This process involves sample economics. The very rich finds ways, both legal and illegal, to shelter income and pay less taxes.” (p. 140) 8. “Since 2001, the average retirement package for a Fortune 500 company’s CEO has exceeded $1 million per year, with such companies as Exxon, Pfizer and United Airlines dishing out more than $5 million per year for retirement. Compare the $1 million annual CEO figure to the private pension of average Americans,

amounting to less than $5,000 per year, and the multiplier is 200; the $5 million pay-out figure equates to 1,000 times.” (p. 161) 9. “The average salary of the top paid twenty-five fund managers was $365 million in 2005, sometimes only with single digit returns. The total, $9.1 billion, was equal to what two thirds (1.8 million) of the nation’s 2.8 million teachers earned for the same year. Here is a pop quiz! Should 25 people who move money around and produce nothing earn the same amount as 1.8 million teachers who perform an essential service for the nation?” (p.161) 10. “Parachute packages for CEO’s after 15 months (Wachovia) to five years (Pfizer) range from $135 million to $200 million. Buyouts for GM workers in 2006 for someone working 10 to 26 years (and based on whether you were willing to surrender future health care overages) averaged $35,000 to $140,000.” (p. 162) 11. “Only 46 percent of American workers participate in any kind of retirement plan. The average 401k plan contained only $39,600 as of 2005. In 2004 as many as 10 million previously retired people (out of 30 million) were forced back to work in order to make ends meet.” (p. 163) 12. “For every job opening between 2002 and 2004, when the U.S. economy rebounded and was growing, there were 2.6 displaced job seekers. As much as 55 percent of the hiring for displaced workers in the Midwest was at $13.25 an hour, amounting to about $27,000 a year. One third of all laid—off workers, after two years were still looking for jobs: 73 percent of U.S. laid-off workers earned less than their previous job or had no job at all.” (p. 164) 13. “The average blue-collar worker in 2005 earned $16.47 per hour or $34,000 a year. More than 72 percent of the workforce saw their real wages (adjusted for inflation) slide since 1979, despite a 40 percent increase in productivity in the last 25 years.” (p. 165) 14. “In 2005 among 25 companies with the most outrageous records of compensating CEO’s for poor performance, the average pay was $16.7 million. The stocks for these companies declined on an average of 14 percent, while the companies’ overall average income fell 25 percent.” (p. 166) 15. “More than 60 major corporations (among the Fortune 500) whose stock market value totaled more than $3 trillion had to restate earnings because of fudging the books during a two-year period, 2003-2004.” (p. 166) 16. “Between 1961 and 1970, the starting salary advantage of college graduates over wage earnings was 17 percent to a high of 24 percent. By 1974, it had plummeted to 10 percent and it continued to hover below that figure until the mid 1980’s. America was in the midst of a recession. Today we call it an “economic slow down,” “a dot-com bust,” or a “soft landing”. Once we consider inflation the income of a typical household headed by a college graduate was lower in 2006 than 2000.” (p. 180) 17. “Despite economic growth of about 3 percent per year and double digit quarterly profits of the Fortune 500 companies between 2001 and 2006, the average hourly wage of the American workforce has remained at the same level; in fact, for the last 30 years the hourly wage of workers have remained relatively flat after inflation, that is $15 to $16 per hour. Paying decent wages and providing

adequate safety nets for salaried employees have been negotiated away under the threat of bankruptcy and global competition.” (p. 202) 18. “Should someone such as...Tom Cruise earn $15 to $20 million a movie or should someone who hits a golf ball three hundred yards down a fairway or hits a baseball four hundred feet in the stands on a regular basis earn $25 to $50 million a year (with advertisements and endorsements), while 35 to 50 million Americans live in squalor (depending on how we measure poverty) and another 225 million people or more just get in what I call the‘struggling class’? Ayn Rand, Milton Friedman and Alan Greenspan] would welcome such a world, based on the doctrines of capitalism and individual achievement, and without apologies. That’s a hard pill to swallow if we consider morality, fairness and what’s good for society.” (p. 212 ) 19. “Should Master Card’s Robert Selander have received 287,341 shares ______ free on the day the company went public, worth $13 million two weeks later___ of the company’s 4,400 employees received one hundred shares, worth _____ employee. Is one person’s value to a company worth 2,766 times more than the ____ worker in the same company?” (p. 212) 20. “The top CEO’s in the United States were paid (in salaries and bonuses) $3.5 million in 1981 and $154 million in 2000, an increase of 4,300 percent in twenty years... At the risk of repelling readers, Michael Eisner of Disney earned $557 million in 1997, largely from stock options, Steve Jobs of Apple took home $775 million in 2000, and Lee Raymond of Exxon received more than $400 million in 2006…At what point is enough more than enough? At what juncture is the pay divide between the new“haves” and “have nots” (or the rest of us) considered too wide, perhaps dangerous?” (p. 13) 21. “Now consider Bush tax cuts. The top 2 percent of taxpayers, those earning more than $200,000, received more than 70 percent of the tax savings from this new law on investment income. Analyzed in slightly different terms, taxpayers who made between ___ and $10 million received $522,000 in tax savings. At the other end of the income divide, those earning less than $50,000 (70 percent of all taxpayers) saved an average of $10 more than the previous year, a total of $435 in total tax cuts; those earning between $50,000 and $100,000 (20 percent of the populace) saved $1,588 in total tax cuts. I guess it’s a wonderful world if you are rich and can convince politicians that your investments will create new jobs and grow the economy.” (p. 214) 22. “Henry Paulson, the Treasury Secretary under the Bush administration, bragged that 5.2 million jobs were added to the economy between 2003 and 2005, but he failed to tell us about two thirds paid less than $35,000 per year and carried no pension or health benefits.” (p. 222) 23. “Between 1997 and 2004, the minimum federal wage was frozen at $5.15 per hour and about 25 percent of the American workforce earned less than $7.50 per hour.” (p. 223) 24. “Between 1993 and 2005, the United States lost 15 percent of its manufacturing jobs to Asian countries and Mexico. Since 1979, when manufacturing employment peaked, it has declined 25 percent. Technology is also taking its toll.

Every time Wal-mart or Citibank replaces a person with a machine, they’re eliminating hundreds of thousands of jobs, both blue and white collar.” (p. 225) 25. “In 2005-2006, college students took out $17.3 billion in private loans to offset rising tuition costs, 25 percent more than the $13.8 billion the year before and 913 percent more than a decade ago. The percentage of students forced to take out loans for college has increased from 49 percent in 1992-93 to 66 percent in 2004-05, thus indicating the growing cost of college and the decline in federal scholarships and grants.” (p. 227) 26. “In 1900 a nickel did not make you rich, but it gave you a sense of empowerment. For five cents, you could buy a beer, a cup of coffee, a hot dog, three donuts, or an ice cream cone. John Rockefeller, the world’s first billionaire, tried to improve his image by handing out dimes to children on the streets of Cleveland during his Sunday walks (from church). One hundred years later, in the impoverished third world of Africa, Asia, and the Middle East, $1,000 (or slightly more) can turn an impoverished teenager or young adult into a human bomb. The larger sum may have something to do with inflation or the reduced value of life among ‘true believers,’ but consider today there re some 2 to 3 billion people marginally existing on $1-$2 a day, and another 1.5 to 2 million people earning $2 to $3.50 a day and the number is growing because of the ‘population bomb’” (p 243)

There are approximately 250 additional factoids in the book, that is simple stats, like the ones above to make you “moan and groan” about what’s happening to the nation and especially the middle class. Several recommendations are offered by the author, especially in the last chapter.