America’s Secret Ruling Class By Rick Kelo

Economists have long used quintiles to define class.  If you were in the bottom 20% you were the “lower class”, the top 20% the “upper class” and so on.  That’s where the term “middle class” (the 3rd quintile) originated.  These are the cut-off limits for each income quintile in America in 2012:

  • Low class: anyone making below $20,262
  • Lower-middle class: $38,520
  • Middle class: $62,434
  • Upper-middle class: $101,582
  • Upper-class: anyone making above $101,582

So let’s discuss the distribution of money in this country as it involves an ever growing ruling class.  A ruling class who exists concentrated in the upper-middle class & upper class quintiles only.  A ruling class putting in their pockets every year an average compensation of $128,000.  Who are they?

Bear in mind the income quintiles above.  Bear in mind the average wage for a top executive in America last year was $120,060.   (SOURCE: BLS.GOV)  So who is this group that earns even more than the top executives of the corporate world? 

First permit me to provide you a picture of American income distribution (shown left).  Note that this is not a graph of quintiles because, by definition, a quintile is 1/5 of the total number of people working in America; so the number of workers in each group is equal if you graph it.  Because of that its not as helpful to depict in a graph so this graph shows you the number of people in each $25,000 group.

Here is the reality for America on average:

  • $41,211 was the average wage in America in 2011 according to the Social Security Administration (SOURCE: ssa.gov)
  • $45,790 was the mean wage in America in 2011 according to the Bureau of Labor Statistics (mean wage is the point if you drew a line half the population would be below & half above) (SOURCE: bls.gov)
  • $53,463 was the average wage in American in 2011 according to the BLS
  • Now there are variations between the 2 agencies based on how they include the unemployed & retired, but you get the general idea.

NOW, let’s talk about a certain rich, ruling class:

  • In 2011 there were 2,109,000 of this rich ruling class in America (Source: Bureau of Economic Analysis Table 6.5D)
  • In 2011 this rich ruling class earned $178,572,000 in total pay, and $270,428,000 in total compensation (Source: BEA Tables 6.2D & 6.3D)
  • In 2011 they earned an average pay of $84,671 (double the average worker’s pay)
  • In 2011 they earned an average total compensation of $128,225 when benefits are included, compared to the $62,757 the average American made with benefits (double again)
  • (SOURCE: Bureau of Economic Analysis Tables 6.3D & 6.5D, then 6.2D & 6.5D)

What is so bad about this rich ruling class, and who are they?  What is to be done about the wealth disparity?

  • They contribute nothing to the economy; they produce no good or service that people consume or people buy.
  • They actually they make it harder for everyone else to get a job.
  • They have a guaranteed job for life and virtually cannot be removed from the position they occupy.
  • If they work more than 40 hours / week (despite the fact they are salaried) they get that overtime as paid vacation.

Now the reveal: WHO IS THIS RICH SEGMENT OF SOCIETY??!? They are the federal government bureaucrat. Remember the quintiles we started the article with?  Remember the bar graph you scanned just a minute ago?  The bureaucrat takes home a larger paycheck than 87% of the people working in America.  Go look at the bar graph again.  You can take money from the capitalist by not buying his product.  You can use Google Apps for $50 instead of giving Bill Gates $400 for Microsoft Office.  You cannot take pay away from the bureaucrat.  A vote for a smaller government does not mean less benefit to the needy, it means less money taken from the needy to make the bureaucrat rich. “For bureaucrats procedure is everything and outcomes are nothing.” ~ Thomas Sowell

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