"The Income Chart That Explains American Politics"

[applegrove]

The Income Chart That Explains American Politics

by John Cassidy at the New Yorker

http://www.newyorker.com/news/john-cassidy/chart-explains-american-politics

"SNIP..........................



On Tuesday morning, the United States Census Bureau released its annual report on income and poverty in the United States. Ostensibly, it didn’t contain many news-grabbing headlines. In 2013, the number of people living in poverty edged down a bit—from 46.5 million, in 2012, to 45.3 million—and the median household income edged up a bit—from $51,800 to $51,900. (The income figures are adjusted for inflation.)

These developments were positive. The poverty rate fell from fifteen per cent to 14.5 per cent, and the Gini coefficient for equivalence-adjusted income, a measure of over-all household-income inequality that takes into account the number of people in each household, also fell a bit. But all of the changes were minor. In fact, the changes in the median household-income figures and in the number of people in poverty weren’t statistically significant. (In a separate release, which was a headline grabber, the Census Bureau reported that the number of people without health insurance fell by 3.8 million in early 2014, after the Affordable Care Act extended coverage to many new people. Health experts said that the figure actually understated the impact of the A.C.A., probably because the government survey concluded in March.)

The median household is the one right in the middle of the income distribution, and any sign of it doing better, even a bit better, is welcome. Both the uptick in the median income and the fall in the poverty rate reflect the economy’s steady, if unspectacular, recovery from the Great Recession, which hit low- and middle-income people particularly hard. As the recovery continues, more modest gains can be expected.

But there the good news stops. Even in cyclical terms, there is a long way to go before ordinary Americans are able to recover the losses that they suffered during the recession. Median household income was eight per cent lower in 2013 than it was in 2007, when the recession began. And the poverty rate in 2013 was two percentage points higher than it was in 2007.




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[valerief]

1. I hate these charts that talk about household income over the past 50 years.

Back then, there was only one income earner in a household. Now, there are two. Apples and oranges.

[bhikkhu]

2. Statistically, the richer the household, the more earners

...and the majority of households from the median down are still single-earner. I'm not sure if that makes any particular point (and sorry if the source is obnoxious, but it all comes from census bureau numbers).

[PSPS]

3. It is still a valid point.

The Census Bureau chart you provided breaks out only by quintile with the top quintile having a median earner income of $90K. Believe it or not, when the term "middle class" was being bandied about in the last presidential election, the figure being used as the "cutoff" for this term was $250K/year for a single-income household or $400K/year for a married couple both working. Pretty whack, no?

When I was a child, it was the norm for a household to consist of a married couple where the man works and the woman stays at home with the kids -- a single income household. And from this single income, the family could afford to buy food, pay a mortgage, buy clothes, take a yearly two-week vacation, buy the occasional new car, send the kids to college, and occasionally go out to eat. It was comfortable but certainly not extravagant.

Accomplishing the same standard of living today would require far more than the $750/week that the middle-quintile income earner makes, hence the need for at least dual incomes (a phenomenon that became the norm with Reagan.)

To see that the top quintile has an average of over 2 earners per household isn't a surprise given that the median earner income for that quintile is $90K which equates to $14,000 in 1970 dollars.

[valerief]

4. Thanks, and the highest three-fifths fifty years ago were probably one earner.

I tried to find a comparable table circa 1970 at the census site but couldn't.