Everyone Gets Wealthier, Minorities and Women Hardest Hit
It is hard to look at this data and see anything but a positive story, but apparently the New York Times and the rest of the media only see tragedy. If there is no problem, there is no justification for increased government power, therefore there must be a problem.
(I am presuming this is in real dollars rather than nominal, but God forbid that the NYT ever makes such things clear). They do manage to show a slight negative recent trend in the growth of the percentage of low income Americans, but only by cherry-picking the dates of comparison to the peaks and troughs of the last two business cycles. Overall I would read the story as middle and lower class are moving into upper income brackets, but the Times headlines it as "Middle Class Shrinks Further as More Fall Out Instead of Climbing Up," illustrated with a classic empathy-inducing sad-mom photo.
By the way, since more rich people fall than middle class, it would seem to make sense to discuss instead the falling fortunes of rich people, but of course the NYT has no desire to write that article.
Onlooker from Troy:
And not that correlation is causation but, the short term bad trend just happens to coincide with the Fed kicking into hyperdrive in "easing", thus ramping up the theft of economic productivity from the majority and funneling it the the moneyed/political elite.
But the NTY couldn't possibly see that link.
January 29, 2015, 9:16 amDaublin:
I believe more people are living alone nowadays than a few decades ago. As such, this makes "households" an unwieldy basis for comparison of the 60s versus today.
At the same time, looking at individuals is also problematic, which is why people talk about households at all. If one person is marriage is working, then the non-working spouse has a nominal income of zero. Such a person will count as being below the poverty line. That's very misleading, though.
More broadly, it's tough to disentangle exactly why someone is unemployed, and whether it matters. A person who is not working might have retired, or might be married to a very wealthy person, or might be in college. Let me state something that is completely obvious once you think about it: many people who aren't working have an enviously happy life.
I am very sympathetic to trying to get a handle on how random people in the population are doing. Households are tricky, though, especialy across decades of time passing.
January 29, 2015, 9:38 amProDover:
Also notice, that in order to round to 0 decimals, the totals for 2000 sum to 101 and for 2013 sum to 99. The rounding errors are almost as big as the differences.
January 29, 2015, 9:59 amNot Sure:
"I believe more people are living alone nowadays than a few decades ago. As such, this makes "households" an unwieldy basis for comparison of the 60s versus today."
January 29, 2015, 10:02 amUnless it provides you with the conclusion you are searching for.
Mercury:
Apparently neither The NYT nor Coyote will consider one possible reason why there now are a greater share of households on the lower rungs of the economic ladder: We keep importing households from the lower rungs of the economic ladder.
January 29, 2015, 10:58 amDuvane:
The first thing I noticed is that low income went up by 3%, while high income went down by 3%, indicating that everybody is sliding down the ladder. Then I realized that apparently the overall population had declined from 101% to 99% of itself. A population density chart would be much more informative than breaking things up along arbitrary breakpoints; it's pretty much guaranteed that whatever is happening here is happening around the breaks.
January 29, 2015, 11:43 amDamon Gentry:
I couldn't help but notice that only 25% of middle class income earners are married, and those are the ones whose 'household' incomes have risen. To me, this is an interesting side effect of the overall decline of marriage and the increase in divorce rates. Want to avoid poverty? 1) Graduate high school. 2) Wait until 21 to get married and have kids. 3) Have a full-time job. I think #2 is the biggest one. Having kids outside of marriage significantly increases your chance of living at (or under) the poverty level.
January 29, 2015, 12:06 pmPaul M:
Your feeling is confirmed here: http://www.census.gov/prod/2013pubs/p20-570.pdf
From 2000 to 2012, households made up of either one man or one woman rose from 25.5% of all households to 27.5%.
Households made up of married couples with or without children went down, from 52.8% of in 2000 to 48.7% in 2012.
"Other family households," which includes single-parent households, went up from 16% to 17.8% 2000-2012.
Also, labor participation has dropped coming out of the last recession. Income isn't wealth. Millennials still living with parents, people who decided to go grad school, travel, retire early may all be fairly well off but have low income.
January 29, 2015, 2:41 pmJim Rose:
Yes, the travelling in the size of the upper middle class and richer received no comment at all. The only thing that happened is the number of people on low incomes increased during the great recession and the slowest employment recovery in 50 years.
If the graph is not in real dollars, whoever wrote it should be sacked.
P.S.you have a great blog with a great many interesting and insightful posts.
January 29, 2015, 3:32 pmNumbers:
Households, households, households. Unless you normalize it for the decided shift to more single person households as the population ages, the charts are bleep.
January 29, 2015, 4:08 pmColoComment:
If you're talkin' income, not wealth, then think: Boomers.
January 29, 2015, 6:41 pmThe first wave of Baby Boomers (remember us, all you youngsters?) hit ~62 in 2008, ~65 in 2011.
I suggest that, for the majority of "middle class" Boomers, their social security annual benefit, even as it may be augmented by a pension plan, 401k, or savings, is probably not going to reach anywhere near the level of their last ?-years' annual salary(ies if a working couple) plus benefits. (Could also be what I'd consider "upper" middle class: for example, if you've got a couple of 20+yr teachers, or engineers, or corporate HR director and IT professional, you could be looking at a joint >$300k annually that is now going to drop.)
Then, as you move them in retirement toward today, the actuaries will tell us that the males are dying off faster than the females, with a commensurate SS benefit adjustment downwards for the "survivor".
They may not be "low income," but their annual income will have decreased nonetheless, no matter how much wealth they may have.
Me too:
Low income chart looks flat. High income chart has a steady rise. How is this bad?
January 30, 2015, 5:26 amMe too:
According to the chart the low income is flat to down sightly. How does that equal a greater share of households?
January 30, 2015, 5:27 amMe too:
The low income chart shows a decline by 6%. You're cherry picking
January 30, 2015, 5:28 amMercury:
Not the case since 2000 which is the thesis of the article.
Where would you plant the "Welcome To The Recovery" sign in this chart:
January 30, 2015, 7:14 amhttp://en.wikipedia.org/wiki/Household_income_in_the_United_States#mediaviewer/File:US_Real_Household_Median_Income_thru_2012.png
obloodyhell:
}}} with a commensurate SS benefit adjustment downwards for the "survivor".
Actually, doesn't work that way. The SS paid out goes "down", in the sense that they aren't getting both the incomes, but the surviving spouse gets the greater of the two SS incomes. So if his bennies were $2000/mo, and hers were $1400, and he passes away, she gets $2000/month.
Lotta people don't know that.
January 30, 2015, 7:49 amobloodyhell:
The number of people per household is an available stat, and is highly relevant.
A :"household" with five people living on 'x' dollars in the 1960s, is not directly comparable to a "household" of 2005 with three people living on 'x' dollars of income, adjusted for inflation. The three-person household almost certainly has more disposable income. So so the optimal metric is to use the household income, then divide it by the number of individuals in the household. This provides a sense of "individual" income regardless of the working/income functionality.
That 2005 middle class household making 3% less, inflation adjusted, than the one in 1965, is actually substantially better off. Less food to pay for, lower clothing expenses, and probably 1/3rd of the college expenses to prepare for in the coming decade. Hence much more disposable income to use for various gewgaws and doodads -- newer cell phones, more infotainment options, and so forth... Not to mention that there ARE more of those things to seek out -- that 1965 household couldn't HAVE a cell phone or a Playstation.... at any price.
January 30, 2015, 7:59 amBram:
$100k is the entry level of Middle Class here in NJ.
January 30, 2015, 8:18 amColoComment:
Yes. But we're looking at households, aren't we?
January 30, 2015, 8:31 am