Incomes are much lower than you think

[OhioChick]

October 2, 2014, 10:31 AM ET



The recently released Census Bureau publication Income and Poverty in the United States: 2013 confirmed the dismal picture presented in the Federal Reserve’s Survey of Consumer Finances that median household income has not recovered from the financial crisis and the Great Recession. The publication also contains fascinating information on the level and distribution of income. The numbers go to the heart of conversations about the “middle class” and the “rich.”

The headline news associated with the release of the new Census data was that poverty had declined. Indeed, the decline in the poverty rate was statistically significant and occurred primarily among children. Not to rain on that parade, but the poverty rate remained 2.0 percentage points higher than in 2007.

Median family income in 2013 according to the Census was $51,939, compared to $56,436 in 2007. The median means that half of households had higher incomes and half had lower ones. The table above presents the thresholds for being in different parts of the income distribution. For example, a household with an income of $150,000 is at the 90th percentile point, or in the top 10% of the income distribution. Even more amazing, a household with an income of $196,000 is at the 95th percentile, or in the top 5%.

The thresholds must be interpreted with caution because households include old and young, urban and rural, coastal and midland, and small and large. Yet, many of those with $150,000 of household income would be quite surprised to know that they are among the richest 10%.

More: http://blogs.marketwatch.com/encore/2014/10/02/incomes-are-much-lower-than-you-think/

[valerief]

1. And these are "household" not "individual" incomes. Appalling, considering the cost

of living today. I speak as someone from the Northeast.

[Warpy]

2. It's just as bad in the southwest

which is why marginal workers live in derelict trailers with no water, sewer or electricity just outside town--if they're lucky. There are tarpaper and plastic tarp shanty towns here that rival anything I've seen south of the border.

And these folks are trying to raise their children in those conditions.

I feel rage when I look at these things. I can't imagine the rage of people who live in them. No wonder there is such an incredible alcoholism problem out here.

I saw poverty in the northeast because I lived in those neighborhoods. I never saw anything to rival what I've seen out here in the last few years. And I am angry.

[valerief]

4. Tragic and criminal. nt

[RKP5637]

3. I swear, around here, they're working hard to get grocery prices up to an average of $8/item. Every

damn week the prices go up higher and higher.

[CoffeeCat]

5. It's the big, fat secret that most people hide from others...

Things were going well pre-2008, in our household. Then the financial crisis hit, and my husband was laid off. He was a network engineer and the IT industry was hit pretty hard. Our household was without any income for several months. We blew through our savings, but we made it. We are grateful.

Post 2008 is another story. We've been existing on a 30 percent paycut.

Life has forever changed. I watch every penny. We live paycheck to paycheck, whereas before we were saving for retirement, our children's college fund and we were shoring up an emergency fund (which is now down to zilch).

I can't even pay off my student loans anymore. They've been in forbearance for a couple of years.

Why am I sharing detailed financial info? Because I am tired of walking around, feeling as though I'm the only one in this hell. I am sick to death of worrying that my kids may not go to college. I am sick of worrying about every penny. I am sick of feeling as if the bottom dropped out in 2008 and it's never coming back.

Most of all, I'm sick of no one--in real life--talking about this. Nearly everyone is going through some kind of post-2008 crisis. I just read that 70 percent of US households live paycheck to paycheck, and if some financial disaster happened--they would be out of their homes within a couple of months. We're all just too damn proud to admit that the economy is a horrendous disaster and that the middle class is being tortured. Grocery prices are just awful. We've adjusted to $3.00 a gallon gas, and we now spend hundreds of dollars per month for healthcare--when we used to spend next to nothing.

I'm sorry if I sound bitchy. I'm just tired. I'm sick of being stressed about this. I'm sick of everyone pretending as if everything is ok. Nothing will ever change unless we start talking about this and admitting that most of us are suffering.

[OhioChick]

6. You're not alone

People do need to start talking about this.

[Bill USA]

7. It's worse than that. The avge income for the bottom 90% in 2012 = $31K. that's 10.2% above th 1964

average for the bottom 90% based on constant 2012 dollars.

See: World Top Incomes Database at the Paris School of Economics (i.e. Thomas Pikkety)



[font size="3"] Jeez!. I made a mistake in enterring the formula in an excel spreadsheet. [/font]

but note that the median income of $51,939 is much higher than the average for the botton 90% which removes the top 10% from the calculation and describes the situation much more accurately.