Article: Charts show growing rich-poor gap

[schildi]

news.yahoo.com/s/yblog_thelookout/20110223/ts_yblog_thelookout/separate-but-unequal-charts-show-growing-rich-poor-gap

What do you all think - is it true that the gap widens dramatically?

[gooddecisions]

I believe the numbers, but I would be curious to know how many goverment and charity run programs there are to help supplement the income for the poor. I did an internet search to try to find a list and came up empty. Anyone have a list like that?

So many of our poor people do pretty well with good food, good clothes, electronics, cable TV, multiple cars, etc. I imagine welfare, medicaid, food stamps, utility assistance, WIC, tax credits, school lunch programs, etc go a long way to help subsidize lifestyle. I understand that there are also many that are in true dire straits.

[daisylu]

This chart shows that the poorest 90 percent of Americans make an average of $31,244 a year, while the top 1 percent make over $1.1 million:

The fact that the average for 90% of Americans is $ 31,000 is what astounds me.

At $31,000/yr in the area where I live you do not qualify for ANY type of state assistance - unless you have like 4 kids.

[cytoglycerine]

Interesting link, thanks for posting! What I'd like to see is that "Average Household Income" chart in a logarithmic scale...When comparing the average $31,000 to the top guy's $2mil on a linear scale, it's tough to see any movement whatsoever in the $31,000 figure - Even doubling from $31,000 to $62,000 would probably barely register on that linear graph. Not that I think it would change the picture all that much...I doubt the poor guy on the bottom saw his income quadruple.

[alabamagal]

The thing that strikes me when looking at those numbers is that the rich are wy more affected by changes in the economy (big dips in 2003) than those not in the top 1%, who have more steady income lines

[Deleted]

Yeah... it 2002 it looks like their income average almost dropped to 1 Million a year (1.1? Million) ... the horrors...

[sunuva]

I agree, the scale is kind of distorting. However, managing to acchieve a 5% rate-of-income growth over 30-years would allow for the quadrupling of income. It is the compounding effect, that probably has the most to do with the distortion (although the top 1% are definitely the outliers and benefit from situations the other 99% won't or can't).

Simply put, the poor won't get rich because they don't have the capacity to get into the compounded growth necessary for the transition from poor to rich. Not for savings and not for income.

I would expect the gap to widen even further in the coming years because I don't believe the poor will be able to acchieve savings or better income prospects. Governments try to make their lives better, charities help to make their lives better, but that doesn't mean they will make them financially richer.

I am certain we can all imagine a scenario or situation that can take a person out of the poor house and on the way to being rich (not necessarily into the top 1%, but babystep into succedding brackets to get to the top 20%).

As can be seen from the graphs they talk about income (top graph) and wealth (bottom graph) and change in share of income (middle right graph). Three graphs, for certain, but can lead to a mistaken assumption of correlating income to share of income to wealth. Since we know the outliers can affect things on a change-percentage scale (change of share of wealth in percentage, for example). The average household income, I think, provides a better indication of being poor (bottom 80%) and not being poor (top 20% including the outliers).

I don't really think this is earth-shattering. And someone in the poor-camp, rather than crying bloody-murder and pointing fingers and saying "the man is keeping me down" may be able to say, I need to change my situation because it is never going to get better.

The top-20% have seen growth (not like the top 1% but those guys skew the scale).

[Savoir Faire-Demogague in NJ]

I am not surprised. The fed govt puts tremendous effort into growing the low income/poverty demographic.

As MTL pointed out on the old msn forums, today, as in no time in in the last 40 years, the ability for the average US worker to provide and bring value to the work place, been the lowest ever. Employees are compensated base on what the bring to the work place.
The US work force is the least educated and is the product of the worst public education system in the world. No wonder wages are where they are.

[Savoir Faire-Demogague in NJ]

One other item that these charts do not show is that those at the top of the income or net worth, where not there 10 to 15 years ago. Most, if not all these people who got there are typically individuals in the tech area, like Michael Dell, Larry Ellison, Steve Jobs, Marc Zuckerburg, etc.
As income is highly mobile, so is net worth.

[Deleted]

One thing that skews the stats is that more and more of indivduals' raises have been in the form not of salary, but benefits, specifically health care... most people just don't realize how much in terms of salary that their health care/insurance actually costs...

[The J]

I want to see how it's actually measuring this. Does the "poorest 90%" include children? Retirees who don't have an "income"?

[stats45]

Most jobs don't pay all that much, and it is increasingly important to have a household with two earners to be comfortably middle-class, especially if you have children.

[resolution]

Feb 24, 2011 12:08:26 GMT -5 The J said:

I want to see how it's actually measuring this. Does the "poorest 90%" include children? Retirees who don't have an "income"?

The fine print says "average income per family" so I would guess it includes retirees and kids in the families as well as retirees living alone. The numbers sound lower than I expected because I thought all the HCOLA people would have a lot more income and push it up a bit. The area I live is semi-rural and the median household income is just under 31k and per capita income is 17k.

[haapai]

Yes, the gap widens. However, it was reading Tim Noah's series in Slate and following the embedded links that convinced me that inequality was on the rise.

These graphs don't do much for me. I like my graphs legible and accompanied by lots of text that explains exactly what data is being portrayed. I distrust beautiful graphs. The more graphics arts mojo I detect; the more carefully I will question the choices of what scales to use and what data to portray.

[Clifford]

The charts in the Yahoo! article are pulled from an article that "explains everything that's wrong with America." I have a problem with this type of "journalism", written to encourage class warfare. It suggests that the rich are getting richer to the detriment of the poor. Acquisition of wealth is not a zero-sum game. For every person who gets wealthier, there is not someone out there who gets poorer. I recognize the disparity and its repercussions, and I do not believe that a CEO's output is necessarily worth 185 average employees' output (based on wages). But if I do better for myself and increase my wealth or wages, it is not because I stepped on someone and kept them down to get there.

[Savoir Faire-Demogague in NJ]

In addition to wage gap inequality, what is worse is education inequality. The US is producing the most uneducated and ignorant graduates out of the public school system, in perhaps the history of the country.

Furthermore, we are graduating people with college degrees in Child Psychology, Social Work, Women's Studies, Ethnic Studies, European History, American Literature, etc. None of these college majors does anything to promote the competitiveness of the graduates or the country as a whole.

Is it any wonder why we are getting our clocks cleaned?

If it is any concession, we probably lead the globe in self esteem.

[The J]

Feb 24, 2011 13:58:34 GMT -5 resolution said:

Feb 24, 2011 12:08:26 GMT -5 The J said:

I want to see how it's actually measuring this. Does the "poorest 90%" include children? Retirees who don't have an "income"?

The fine print says "average income per family" so I would guess it includes retirees and kids in the families as well as retirees living alone. The numbers sound lower than I expected because I thought all the HCOLA people would have a lot more income and push it up a bit. The area I live is semi-rural and the median household income is just under 31k and per capita income is 17k.

Given that median household income in the US is around $48k, and average is around $52k, according to the BLS, I'm pretty sure these numbers are somewhat messed up.

Particularly because the median means that out of the "90%" quoted, it breaks down to 40% that make the median and above and 50% that make below the median. I doubt it skews the mean that far down.

[phil5185]

Furthermore, we are graduating people with college degrees in Child Psychology, Social Work, Women's Studies, Ethnic Studies, European History, American Literature, etc. None of these college majors does anything to promote the competitiveness of the graduates or the country as a whole.
Is it any wonder why we are getting our clocks cleaned?

If it is any concession, we probably lead the globe in self esteem.

LOL - you nailed it. Have you interviewed any of those esteem-based grads to fill technical jobs lately?

The rich-poor gap has been a powerful motivator that put the US near the top in productivity, standard of living, ingenuity over the past 75 yrs. Productive people put money at risk, work hard, are inventive, and are able to become wealthy in a capitalist society under Rule of Law protection. The rich are encouraged to do 'more of the same' and the poor are encouraged to go after their dreams. Conversely, the socialist/communist societies get equal pay and equal benefits spread evenly across their society - so everyone's std of living is low.

[Deleted]

You know if degrees like social work (or teaching) don't add to productivity, why require higher education to perform it? If all a librarian does is shelve books and go "shush," hire a clerical person.

Some of our $$$ problem is that we don't value certain fields. We complain that Johnny can't read and write (or multiply or divide), but we don't want to pay someone a comparable salary to teach him this.

My problem with the ARTICLE is that I didn't fit in the top 1% or the top 10%. Then it started breaking it into 20%. But I didn't know if I belonged or not. You can't talk about apples and then compare oranges.

[formerexpat]

We complain that Johnny can't read and write (or multiply or divide), but we don't want to pay someone a comparable salary to teach him this.

But yet we say that many of the teachers have Master degrees. So, our children can't read or write despite having a very educated field of teachers that are paid quite handsomely after annualizing their wage to 12 months, extending their work day to 8 hours and including benefits.

What's wrong with that picture? Seems the rewards are improperly aligned with the teachers motives if they're the most educated we've ever seen but our children are dumber than they've been as a whole.
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[schildi]

Feb 24, 2011 12:08:26 GMT -5 The J said:

I want to see how it's actually measuring this. Does the "poorest 90%" include children? Retirees who don't have an "income"?

This is something that is missing on a regular basis in most (all? ) charts. Gives the author the chance to manipulate data without lying. . Without telling the assumptions, I can show anything with any graph / data, and I can always make it fit my agenda ....

[schildi]

Feb 24, 2011 18:00:54 GMT -5 phil5185 said:

Furthermore, we are graduating people with college degrees in Child Psychology, Social Work, Women's Studies, Ethnic Studies, European History, American Literature, etc. None of these college majors does anything to promote the competitiveness of the graduates or the country as a whole.
Is it any wonder why we are getting our clocks cleaned?

If it is any concession, we probably lead the globe in self esteem.

LOL - you nailed it. Have you interviewed any of those esteem-based grads to fill technical jobs lately?

The rich-poor gap has been a powerful motivator that put the US near the top in productivity, standard of living, ingenuity over the past 75 yrs. Productive people put money at risk, work hard, are inventive, and are able to become wealthy in a capitalist society under Rule of Law protection. The rich are encouraged to do 'more of the same' and the poor are encouraged to go after their dreams. Conversely, the socialist/communist societies get equal pay and equal benefits spread evenly across their society - so everyone's std of living is low.

I agree in general. One thing though: once the gap becomes too big, that could pose a serious problem.

[formerexpat]

This chart shows that the poorest 90 percent of Americans make an average of $31,244 a year

As for the article, perhaps this is indicative of the problem that most the country has with mathematics. Here is the 2008 tax return data broken down by income levels:

www.taxfoundation.org/news/show/250.html

This uses AGI, which is lower than gross income, but this is what we have:

A) Returns with positive AGI between 10% and 50% = 55,984,232.
B) Total AGI for this group = $3,495,649m

B / A = $62.4k

C) Returns with positive AGI lower than 50% = 69,980,290
D) Total AGI for this group = $1,074,514m

D / C = $15.4k

E) A + C = 125,964,522 positive returns for lowest 90%
F) B + D = $4,570,163m total AGI for the lowest 90%

F / E = $36,281 average AGI for lowest 90%

AGI is lower than gross income. [/size]

[schildi]

Feb 24, 2011 23:11:50 GMT -5 formerexpat said:

This chart shows that the poorest 90 percent of Americans make an average of $31,244 a year

As for the article, perhaps this is indicative of the problem that most the country has with mathematics. Here is the 2008 tax return data broken down by income levels:

www.taxfoundation.org/news/show/250.html

This uses AGI, which is lower than gross income, but this is what we have:

A) Returns with positive AGI between 10% and 50% = 55,984,232.
B) Total AGI for this group = $3,495,649m

B / A = $62.4k

C) Returns with positive AGI lower than 50% = 69,980,290
D) Total AGI for this group = $1,074,514m

D / C = $15.4k

E) A + C = 125,964,522 positive returns for lowest 90%
F) B + D = $4,570,163m total AGI for the lowest 90%

F / E = $36,281 average AGI for lowest 90%

AGI is lower than gross income.

[/size][/quote]

Expat, this requires thinking. It is late, and I had a beer. Two actually. Why are you doing this?

[formerexpat]

I wasn't talking about you Schildi. I know you have the capability to do this math. I meant the public in general.

I'm fairly familiar with the numbers on that link I provided and once I read the sentence in the article I knew it was BS.

Probably did the math because I wasn't drinking #tongue2#