One out of every 34 Americans who earned wages in 2008 earned absolutely nothing -- not one cent -- in 2009.
The stunning figure was released earlier this month by the Social Security Administration, but apparently went unreported until it appeared today on Tax.com in a column by Pulitzer Prize-winning tax reporter David Cay Johnston.
It's not just every 34th earner whose financial situation has been upended by the financial crisis. Average wages, median wages, and total wages have all declined -- except at the very top, where they leaped dramatically, increasing five-fold.
Johnston writes that while the number of Americans earning more than $50 million fell from 131 in 2008 to 74 in 2009, those that remained at the top increased their income from an average of $91.2 million in 2008 to almost $519 million.
The wealth is astounding, says Johnston. "That's nearly $10 million in weekly pay!... These 74 people made as much as the 19 million lowest-paid people in America, who constitute one in every eight workers."
Johston sees the depressing figures as a result of government tax policies maintained by politicians with an eye on re-election, not good government:
It is the latest, and in this case quite dramatic, evidence that our economic policies in Washington are undermining the nation as a whole.We have created a tax system that changes continually as politicians manipulate it to extract campaign donations. We have enabled ''free trade'' that is nothing of the sort, but rather tax-subsidized mechanisms that encourage American manufacturers to close their domestic factories, fire workers, and then use cheap labor in China for products they send right back to the United States. This has created enormous downward pressure on wages, and not just for factory workers.
A new study by the Lewin Group estimates that 28.6 million Americans will be eligible for a federal subsidy to purchase health insurance beginning in 2014 at a projected cost to tax payers in excess of $110 billion. This estimate is dramatically higher (578%) than the cost of these subsidies forecast by the Congressional Budget Office (CBO) prior to the bill’s enactment into law..more at link above