The Brady Bunch was one of the most popular sitcoms to have aired in the 1970s.
It’s the story of a mother and a father, each with three kids of their own, who come together to form a family.
The sole earner of the family was the father, Mike Brady.
He worked as an architect. This job provided him with enough of a salary to own a multi-bedroom home, feed and clothe six kids, pay the salary of a live-in housekeeper, and support payments on two cars.
Today, that would be a far greater challenge for an architect, with a median annual wage of $80,180, according to the Bureau of Labor Statistics.
Income inequality likely isn’t the first thing that comes to mind when you think of The Brady Bunch…
However, even the dramatized life of Mike Brady serves as a great example of the erosion of earning power of any American worker outside of the top 1%.
Over the past 50 years, income inequality has continuously widened with each passing decade.
In fact, as it stands today, income inequality has exploded to levels not seen since the Great Depression.
And how much has this extreme income inequality cost the American worker?
A staggering $50 trillion.
Today, I’ll walk you through how that number came to be.
I’ll also show you a new program from the government that’s set to make income inequality even worse… and what you can do to shield yourself from any further suffering.
A $50 Trillion Shift
Over the two decades following World War II, Americans across the board saw their income grow at the same rate.
This reduced income inequality. So much so that by the early 1970s, Americans in the bottom 50% of income distribution were earning over 20% of the total national income. Whereas the top 1% were earning a century-low 10% of the total national income.
As you can see in the chart, that steadily began to reverse in the middle of the 1970s. Income inequality began to widen.
It can be argued whether factors like globalization, the fall of unions, or shifting tax policy are to blame.
However, the fact remains, over the last 50 years the top 1% has seen their share of income grow, while the bottom 50% have seen their share crumble.
In November 2020, Carter Price and Kathryn Edwards of the RAND Corporation set out to calculate the monetary impact this had on the American worker.
Their goal was to find out how much more income Americans could have earned if the level of income inequality stayed the same as in the mid-1970s.
Using that logic, they found that the combined annual income of Americans in the bottom 90% of earners would have been $47 trillion higher over the 43-year period from 1975 to 2018.
With income inequality remaining just as wide today as it was five years ago, we expect that number to have crossed $50 trillion by now.
But just because the bottom 90% of Americans never earned this $50 trillion doesn’t mean it disappeared.
It was instead earned by the top 1%.
We can see that reflected in the following table. It outlines three data points per income segment.
The first column shows how much income a worker in each income segment would have earned in 1975 using 2018 dollars. The second shows how much each income segment worker earned in 2018.
The third column, the lost salary, shows the level of income each segment could have earned had income inequality remained the same as it was in the mid-1970s.
Let’s say you’re a schoolteacher making $50,000 a year. You’ve missed out on the potential to make a salary of $92,000 had income inequality remained the same.
In that case, extreme income inequality has cost you $42,000 a year.
Same goes if you’re an architect like Mike Brady. Today, you’d make around $81,000 a year. However, you could have been making $126,000. Income inequality has cost you $45,000 a year.
But if you’re in the top 1% earning $761,000, you’re making around $200,000 more as a result of income inequality.
According to RAND, extreme income inequality is costing the average full-time worker about $42,000 per year.
For those looking to get that $42,000 back, unfortunately, there’s no easy solution for that.
But there is a way to protect yourself from any further losses.
You see, the U.S. government has been working to roll out a new program that gives it unprecedented power to track and control how much money you have.
With this program in place, income inequality will get even worse.
Now Is the Time to Prepare
On July 20, the Federal Reserve launched FedNow, its new payment network.
If you’ve been following us the past few months, you know FedNow is a payment system that can settle transactions almost instantaneously rather than in several days.
However, there’s a catch: Because FedNow is centralized, the government can track every transaction.
More importantly, FedNow could be the launching pad for a central bank digital currency (CBDC).
CBDCs are the next evolution of money, according to its backers. Think of it as a digital dollar provided directly by the government.
The danger of a CBDC is that it would give federal officials full control over the money going into every person’s bank account.
The risks to you range from a slight inconvenience to that of an Orwellian nightmare.
For a real-world example of the latter, look no further than Brazil’s CBDC.
Pedro Magalhaes, a blockchain developer, reverse-engineered the code behind Brazil’s CBDC. He found that the government has built in the ability to freeze Brazilian bank accounts and even adjust their balances.
Imagine that the government had the ability to manually change how much money you have in the bank.
What do you think that will do for income inequality?
At first it might seem reasonable… The government will frame this as a way to control inflation or maybe make it easier to afford housing.
Perhaps it will use it to give you free money at first… But the end result will be the same: less money for you, and more control for the government.
However, there is a way to opt out of this fast-approaching government system…
Daily editor Teeka Tiwari has put together a special briefing on what this new digital dollar regime means for you and your money.
He’ll show you what he has done to remove millions of his own dollars out of the financial system in anticipation of a mandatory recall on the U.S. dollar.
You can watch it now by clicking here.
Regards,
Michael Gross
Analyst, Palm Beach Daily