Class and Wealth in America

Question 1

What percent of Americans define themselves as ‘middle class’?
8

Answer 1

80%

Question 2

What is Gross Domestic Product (GDP)?

Answer 2

Measurement of the total value of goods and services.

Usually measured per year

Question 3

What is ‘per capita GDP’ and how is it used?

Answer 3

Total GDP divided by population

Used to compare economic performance of countries

Question 4

How have the five quintiles of the population fared in share of income since 1967?

Answer 4

Wealth Gap has increased, top 20% getting richer

Lower quintiles aren’t getting richer, they are staying in the same place even as the GDP increases.

Question 5

What percent of the nation’s wealth does the top 20% possess?

Answer 5

83%

Question 6

What percent of the nation’s wealth does the top 1% possess?

Answer 6

38%

Question 7

What percent of the nation’s wealth did the top 1% possess in 1900?

Answer 7

88%

Question 8

What was the pay disparity between corporate officers and average workers in 1945-83, 2006?

Answer 8

1945-83: 40:1 ($600,000:$15,000)

2006: 120:1 ($3.6million: $30,000)

Question 9

For a single individual, what is the income cap above which they are not considered to be living in poverty?

Answer 9

$11,770/year → $5.66/hr

Question 10

How much is added to the number above for each additional person in the household? What is the official poverty statistic largely based on (what expense is it based on)? What are major criticisms of the poverty statistic?

Answer 10

\+$4,160 per person in the family after the first
2 people → $15,930/year → $7.66/hr
3 people → $20,090/year → $9.66/hr
Mainly based on food costs
Cost of food * 3
Criticisms: 
Definition is too general
Costs varies between different areas
Work expenses and health care are not accounted for
Tax policies are not reflected
Housing costs have increased faster

Question 11

What percent of the population is living below the poverty line?

Answer 11

Around 15%

Question 12

In order to be considered affordable what is the top percent of a person’s income that should go to housing?

Answer 12

30%

Question 13

What is Krugman saying about how the wealth gap in the U.S. has evolved?

Answer 13

The wealth gap has gotten really big since the 70s.

Question 14

What is Krugman saying about the U.S. in comparison to other advanced industrial nations?

Answer 14

• “Our rich are much richer”
• America has a GDP per capita higher than any other advanced country but only because of the concentration of wealth
• Life expectancy is lower
• Higher percent of people in poverty