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Income Gap Shrinks Between the Rich and Poor in the US

With the deepest recession in the US economy since the Great Depression, the income gap between the well-off in the United States and the average American is becoming to shrink. Ideally, this gap should be closed by lifting up the bottom. But in the trend being seen today, it is shrinking because the top is being pulled down.

According to Ariell Reshef, an economist from the University of Virginia, “Based on experience, it looks like inequality will go down and change the long-term trend of America being a less egalitarian society.” Over the last three decades, individuals occupying top positions as chief executives, law-firm partners, Wall Street bankers, and savvy traders have amassed huge amounts of money. Meanwhile, the income of teachers, office managers, factory workers, and other individuals working in the middle grew slowly.

It is estimated that in 2007, the top 1 percent of US families controlled 23.5 percent of all personal income in the United States. The share of that 1 percent is shrinking fast. It is believed that their income will drop to between 15 to 19 percent of all personal income by 2010.

One significant development that can be seen is the drastic cut in pay for chief executives. In 2008, the median salary of executives listed in the S&P fell 15 percent. However, the effects of the economic crisis and the succeeding credit crunch will go deeper than that. Saving money, for example, has become an important part of an average America’s life.

Finance, for its part, has previously been seen as a lucrative job that attracts top talents. It will not be this way in the future because it will make up a smaller part of the overall economy. The behaviors of Americans will also change. Because borrowing is becoming harder, the focus of many would be debt relief to avoid high interest payments. In any case, there is no doubt that the developments in the last two years will be seen as a watershed for the country’s economic life and American’s lifestyles.

Compilation of Money Saving Blogs

This week, we mainly talked about debt, debt assistance, and finance-related problems. Well, for today’s post, we will take a break from all of that. Everyone can take a breather from their financial troubles. Instead, we’ll provide a list of blogs that can help you save money. Some blogs are witty; some are very informative, while there are others that even give out promotional codes. Hopefully, you’ll gain something from reading these blogs. So below are this Friday’s rundown of recommended blog reads:

Kathryn @ Promotional Codes compiled a list of coupons, deals, and discount codes you can take advantage of. Some of the things you can save on include airfare, gift products, beauty supplies, and pet products among others. There are a lot of fun things you can buy at rock bottom prices.

The Save Money Blog featured a post titled “Is Your Online Time Wasted?” The article basically revolved around the title because it talked about making productive use of your internet time. For example, you can use it for comparative shopping for health insurance and other deals. A good site that provides comparison shopping for credit report, online travel, and even DVD rentals is ComparedForMe.com.

The Not Made of Money blog provided very helpful money saving tips for this week with the article “Five Tips for Tightening Your Budget”. It gives very practical advice about getting your spending under control. You can slash your entertainment expenses, look into your utility bills, learn to do house chores instead of hiring someone, and avoid new purchases.

Bill Shrink Guy recorded his observation about the recession with his article “10 Behaviors that the Recession made more acceptable.” It is a witty blog post that talked about how frugal people rule during the time of recession, while they are dismissed as penny-pinchers during more prosperous times. Frugal behaviors that can be observed today include brown-bagging leftovers, growing your own food, and even bartering.

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