By Haddon Libby
In America, we spend $11 trillion shopping each year. This converts into $33,333 per person per year or $640 per week on earnings of $42,700. As you will see in this week’s column, the way that money is spent is increasingly skewed toward only a handful of people while the vast majority struggle each and every day.
Before that though, I want to impart some fun facts on you. For every man and woman over 21 in this country, $275 is spent annually on beer. Speaking for myself, somebody is drinking my allocation! We spend $1,500 annually or $30 a week per person on groceries, $7 a week on fast food, 67 cents on coffee and 67 cents on water a week. I clearly eat someone’s lunch while drinking their coffee…and their neighbors.
As you look at what people are reading at the beach or by the pool, you might find it interesting that we spend $32 per person on romance novels. Given that guys typically avoid this genre, this means that women represent most of those sales. We also spend $50 annually on chocolate and $11 billion or $5,200 each on engagement or wedding rings.
As a home owner here in the desert, I was surprised to learn that we average $125 each on lawn care, $8 on toilet paper and $1.60 on golf balls.
When we look back over the last sixty years, life has changed mightily. The cost of food has dropped from 40% of our income to 15% while clothing costs have fallen from 12% to 4%. Our biggest cost increase has been related to housing which has gone from 26% of our take home pay to 41%. At the same time, home sizes have increased from 1,000 to 2,000 square feet per household. Transportation costs have more than doubled from 7% to 17% as we now have eight cars per ten people versus 1950 when we had three cars for every ten Americans. While technology has allowed for the dramatic drop in food and clothing costs, it has caused an increase in the amount we spend on healthcare as well as technology itself.
While these changes have improved life for most, more powerful changes have been underway.
In 1976, the top 1% of all wage earners received 9% of all pay. Today, they receive 24% of all wages. This same 1% control 40% of America’s $54 trillion in wealth while the bottom 80% (that is 4 in 5) control 7% of the wealth. Stated differently, the 3.1 million people in the top 1% of America’s 313 million citizens have on average $7,000,000 each while the bottom 235 MILLION Americans have about $15,000 each. Think about that $15,000 for a second – that is the average over 235 million people – meaning that more than have of all Americans have far less than that amount. The top 1% also own 50% of all stocks while the bottom 50% own 0.5%. The average CEO earns 380 TIMES more than the AVERAGE worker.
This is all evidence that money and power are increasingly concentrated in the hands of only a few people. As recent studies show that 4 in 5 Americans are at risk of falling into poverty, we should all be alarmed and concerned. What made America great was a thriving middle class. The erosion of the middle and upper middle classes is a precursor to greater instability for you and me as well as our children.