Life is sweet for the rich

From MarketWatch.com

Tiffany & Co says sales at its flagship New York store jumped 26% in the first quarter. International luxury goods giant Louis Vuitton Moet Hennessy whose brands range from Fendi to Givenchy to Moet & Chandon Champagne, plus, of course, Vuitton bags says U.S. sales boomed 20% in the first quarter, including a remarkable 58% boost for sales of jewelry and expensive watches like Tag Heuer. the Swiss watch federation says exports of luxury watches (those $2,000 "timepieces") to the U.S. rose 12% in May and are now ahead 9% for the year. Super-luxury goods purveyor Richemont which owns such brands as Cartier, Dunhill, and Van Cleef & Arpels says U.S. sales are up. The Sunseeker Club in New York, America's biggest dealership in the multi-million dollar British luxury power boats say business is strong again. Those who have the money to spend, they say, are spending it. The truth is, this is a great time in which to be rich.

According to consultants Cap Gemini, the wealthy saw their net worth bounce back sharply last year. And while those with $1 million or more did pretty well, the real story was the boom among the ultra rich: Those with more than $30 million to invest. "Ultra-HNWIs (High Net Worth Individuals) increased their wealth by a striking 21.5% in 2009, far more than the average in the HNWI segment as a whole," Cap Gemini reported, adding: "A disproportionate amount of wealth remained concentrated in the hands of Ultra-HNWIs." There are fewer than 100,000 ultras around the world. A third of those are in the U.S. Ultras make up 1% of the high net worth, according to Cap Gemini, but held 36% of the high net worth's wealth.

The average Fortune 500 chief executive pocketed $10.5 million in 2008, the last year for which data are yet available. That's more than 300 times the average worker's pay. Back in the 1940s through 1980 the ratio was typically about 40 times. From 1979 through 2007, says the Congressional Budget Office , the top 1% saw their average household income skyrocket from $346,000 to $1.3 million in constant, 2007 dollars.

According to an analysis by the Central Intelligence Agency, the U.S. has one of the most unequal income distributions in the world. The U.S. income distribution is more in line with Zimbabwe, Argentina, and El Salvador. Many think of Russia as the land of oligarchs, but America's inequality is actually slightly greater than Russia's.

Numbers published by the Federal Reserve a few weeks ago show that corporate profit margins have just hit record levels. Indeed. Andrew Smithers, a well-regarded financial consultant and author of "Wall Street Revalued," calculates from the Fed's latest Flow of Funds report that corporate profit margins rocketed to 36% in the first quarter. Since records began in 1947 they have never been this high. The highest they got under Ronald Reagan was 30%.

As for all those millions out of work: Maybe they can get jobs as servants. The official jobless rate, at 9.7%, is a fiction and should be treated as such. It doesn't even count lots of unemployed people. The so-called "underemployment" or U-6 rate is an improvement. For example it counts discouraged job seekers, and those forced to work part-time because they can't get a full-time job. That rate right now is 16.6% .

An analysis of data at the U.S. Labor Department shows that there are 79 million men in America between the ages of 25 and 65. And nearly 18 million of them, or 22%, are out of work completely. (The rate in the 1950s was less than 10%.) And that doesn't even count those who are working part-time because they can't get full-time work. Add those to the mix and about one in four men of prime working age lacks a full-time job. The Center for Economic and Policy Research in Washington, D.C., says the numbers may be even worse than that. Research suggests a growing number of men, especially in deprived, urban and minority neighborhoods, have vanished from the statistical rolls altogether.

The government said for those who do have jobs, average hourly earnings were up 1.9% from a year ago.The government also reported that those workers produced 2.8% more goods and services per hour. So they actually got paid about 1% less for each product they made, TV they sold, or meal they served. Over the same period consumer prices rose 2.2%. So even those lucky enough to be working have gone backwards