Average American Family Income Declines

[deadparrot]

WASHINGTON - The average income of American families, after adjusting for inflation, declined by 2.3 percent in 2004 compared to 2001 while their net worth rose but at a slower pace.

The Federal Reserve reported Thursday that the drop in inflation-adjusted incomes left the average family income at $70,700 in 2004. The median, or point where half the families earned more and half less, did rise slightly in 2004 after adjusting for inflation to $43,200, up 1.6 percent from the 2001 level.

The median, or midpoint for net worth rose by 1.5 percent to $93,100 from 2001 to 2004. That growth was far below the 10.3 percent gain in median net worth from 1998 to 2001, a period when the stock market reached record highs before starting to decline in early 2000.

The Fed's results were published in the 2004 Survey of Consumer Finances, a document which provides a comprehensive view of how Americans are faring on such pocketbook issues as incomes and net worth.

http://news.yahoo.com/s/ap/20060223/ap_on_bi_ge/family_finances

[VegasWolf]

1. Just wait until Amerikans can no longer borrow against their houses

to pay off their credit card bills. We will see real pain as houising prices have passed their peaks and are on the way down.

[ixion]

4. indeed, and then they'll lose the house altogether because

of rising interest rates.

All these folks with no-interest loans are going to be in a world of hurt, IMO.

[radfringe]

27. let them eat pizza....

http://www.mercurynews.com/mld/mercurynews/13940642.htm
Bush insists outsourcing to India has its benefits
By Jim Puzzanghera
Mercury News Washington Bureau -- 2/23/06

WASHINGTON - To people in Silicon Valley and around the country concerned about the outsourcing of jobs to India, President Bush on Wednesday offered something to make the practice more palatable.

Pizza.

It's just one of the U.S. products that India's rapidly growing middle class is developing an appetite for, Bush said in a speech to the Asia Society as he prepares for a trip to India and Pakistan next month. While acknowledging the individual trauma of Americans who lose jobs when companies move operations abroad, Bush said India's economic growth is an overall plus for the U.S. economy.

[Captain Hilts]

29. Boy, is borrowing against your house's increased value stupid.

We need public service ads instructing people why that's not a good idea.

[raccoon]

2. But the average family income, seems to me,

is MEANINGLESS. My guess is at least half the people I know have an income far below that.

It's like the joke about if Bill Gates walks into a bar, the average net worth of everybody in the bar jumps to several billion.

[DBoon]

5. Average does not mean median

the median is 50% above, 50% below. Median is not skewed by a few high income points.

Average is skewed. A few really well off families will ull up the average, even if many middle income or poor people are doing a lot worse.

That makes this statistic so scary - EVEN with the outrageously wealthy doing so well, if the average drops, it means there is some serious shit coming down.

[AX10]

9. You are 100% correct.

[tn-guy]

21. Is this a bad thing??

Maybe I'm confused but it seems to me that if the average goes down and the median goes up then that means the distribution of income is becoming less uneven. Isn't this a case where the high income folks prospered less, thus depressing the average but low income people made some gains, modest though they may be?

I could be wrong, I'm not sure exactly how to interpret it when mean and median go in different directions.

[Mithras61]

22. I think what you mean is...

"median is not AS skewed by a few high-income points, especially when offset by more low income points."

Median could be skewed by a few high-income points if they are not offset by a similar number of low income points. That means in this case that a few more haves than have-nots were created this period. The fact that the mean crept down a bit means that the have nots are being less offset by the haves than they previously were.

I'd like to see numbers on the mode (that is, what are the income ranges being measured, and how many fall into each of those categories). I would especially like to see the numbers broken out by the categories $0-$25K, $25,001-$50K, $50,001-$75K, $75,001-$100K, and so on to $200K, with a final category of >$1,000,000. I'd also like to see these numbers for raw income, not AGI. I'm certain you'd see the graph skewed WAY right (but we're not likely to ever see THAT one, because it would clearly illustrate the disparities in our economy).

For those who don't know it, skewed right means that a few unusually large measurements exist on the right side of the graph, so you would have a large bulge on the low end of the scale and a long tail on the right end of the scale.

This issue is one where we as Dems get clobbered by the lack of education on the part of the general populace. The vast majority of people in this country think of themselves as belonging to the "middle class" and presume that about half of everyone makes more than them, and half makes less than them. This is the same problem we get when we begin talking about taxes falling on the middle- or low-income workers. We need to STOP using fuzzy or relative values and start saying concrete things like "the 95% of the tax burden in this country falls on people making less than $40,000 per year" (don't use MY figures, though - they are just pulled out of the air), and "taxes are the cost of doing business and living in a modern economy. If corporations and the wealthy don't want to pay taxes, they should stop doing business in this country." So long as almost everyone thinks they are "middle-class" we will loose the class war that is going on here. The facts are that more than 95% of the wealth in this country is controlled by less than 1% of the people, and those people want the rest of it too. If you aren't in the >$1M/year salary range, the haves are after what little you DO have.

[SoCalDem]

23. Yeppers.. Two houses in one area of land One household makes 1mil

the other is an unemployed family living in a tumble-down shack that the rich guy wants to but..So the average income of that little group..$500K.. figures lie..liars figure

[raccoon]

31. Great post, Mithras, especially the last 2 sentences. nt

[EuroObserver]

7. Exactly. Remove the statistical extreme

at the top of the scale (1% -2% extremely wealthy), then plot the chart.

[ThoughtCriminal]

3. Doesn't "Inflation" adjusted exclude energy and food?

I bet if you compare to actual "cost of living", the drop is even worse.

[raccoon]

8. Speaking of that, I also read somewhere on DU the other day

that medical expenses are excluded from the official inflation figures.

If that's true, and if energy and food are also excluded, then what in Hades are they using to compute it?

[arkie dem]

16. I think durable goods as in....

military equipment is used. I'm sure the defense contractors are cutting the Pentagon a good deal on equipment these days.:shrug:

[EuroObserver]

18. Frivolities n/t

[havocmom]

19. Yachts, furs, diamonds, high end stoves... you know, the essentials!

Anything that is 'volatile' is excluded. But most of us spend most of our paychecks on volatile goods like food commodities, fuel and medical care. So what hits us most is not even considered in the inflation rate.

Sorta like the unemployment figures. They now base that on the number of people currently receiving unemployment benefits. Once your benefit time has expired, you are no longer counted as unemployed.

See? They just create the reality they want. Anything which upsets their model results is removed from the equation. Their oil buds are charging enough to make record profits, so the cost of fuel can't be counted. Food has to be transported, so prices going up due to fuel. Food can't be counted. Medical care going up WAY too fast, can't count that. People who are no longer receiving unemployment benefits must be working (or dead) so we won't count them either.

Economy is just fine and we don't want to hear any dissent from all you starving people!:sarcasm:

[Up2Late]

6. AGAIN? Must be time for another BIG Tax Cut again!

I'm beginning to wonder if the Bush Cabal really has no clue, or do the know exactly what they are doing to America?:shrug:

[raccoon]

32. I don't know which it is, but I do know they don't give a flying toot. nt

[kineneb]

10. but everything is Hunky-Dory!

not even... (gathering the ideas from above)

Anyone out there able to recalculate these stats to include
1. Median income
2. Fuel, food, medical cost increases

Our income...went from somewhere around $44K in 2001 to the present $14K. Duh! Loose your job and your health, see what happens.

[HughBeaumont]

11. Color ME surprised!

Jesus, read Perfectly Legal to see the flat-lining of the Family income since the 70s in contrast to the skyrocketing of the ultra-wealthy's income since then.

[UrbScotty]

12. There are more serious issues facing families.

Do you not know that the sancity of marriage is being ATTACKED?!

:sarcasm:

Just the other day I saw a woman put her arm around another woman!

:eyes:

[BiggJawn]

13. Oh, my, yes!

And GAWD will stop being SO good to Indiana (as in "Ain't GAWD GOOD t'Indiana?") if we don't get "in GAWD WE TRUST" on our license plates!

why, he may even allow "activist judges" to prohibit Brian Bosma from having a Revivial Meeting everyday at the start of Things in the House of Bubbas!
:evilgrin:

It's 50 degrees here. Time to check things over and buy new tyres...

[RedEarth]

14. this chart puts in perspective.....

[davekriss]

25. The chart above...

...explains more than anything else why the powers that be are distancing themselves from and even attacking GWB. If he can't make money for them, then what good is he?

Note, however, that Bush's favored industries, Oil, Pharma, and Defense, are making out like bandits. Instead of the Republithug-approved shift of income and wealth from the many to the few, we're now observing a shift of declining income from the few to a fewer few, to Bush's Base, or in OBL language, Bush's Qaeda ("Al Qaeda" means "the base" in English).

Hoohoo! Won't be long now but Bush will be rendered a completely impotent (lame) duck or actually impeached!! (Of course, the owning class will simply replace him with a better steward of their personal advantage, but at times like these an FDR can slip in...)

Scary part is every calamity of capitalism, from depression to world war, is preceeded by internicine squabbles amongst factions within the owning class. My guess is we better hold on to our seats, folks, 'cause we're in for a very bumpy ride!!

[aquart]

15. But India's growing middle class is buying our products.

[fryguy]

17. it is official

if you're not part of the bush cabal you're not part of his view that the state of the union is strong

[CountAllVotes]

20. In 1929: richest 1% owns 40% of the nation : 4% drop in income

From:

http://www.huppi.com/kangaroo/Timeline.htm

Timelines of the Great Depression

1929

Automobile sales decline by a third in the nine months before the crash.
Construction down $2 billion since 1926.

Recession begins in August, two months before the stock market crash. During this two month period, production will decline at an annual rate of 20 percent, wholesale prices at 7.5 percent, and personal income at 5 percent.

Stock market crash begins October 24. Investors call October 29 "Black Tuesday." Losses for the month will total $16 billion, an astronomical sum in those days.

By 1929, the richest 1 percent will own 40 percent of the nation's wealth. The bottom 93 percent will have experienced a 4 percent drop in real disposable per-capita income between 1923 and 1929.


http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x19565 discussion re: this.

Similarities are astonishing! I do believe we are in for one hell of a ride. We cannot ignore this. It will not go away on its own. It will lead to c. 1930 only worse, all over again might I dare suggest?

[raccoon]

33. It will be worse than the '30's, that's for sure.

People's expectations have been raised a great deal since then.

Also, in the 30's, many people still lived on farms and could at least feed themselves. Now VERY few people can do that.

[Onlooker]

24. Debt, lower wages clip net worth growth

http://money.cnn.com/2006/02/23/pf/consumer_fedsurvey/index.htm?cnn=yes

NEW YORK (CNNMoney.com) – Americans' net worth grew between 2001 and 2004, but not nearly as strongly as it did between 1998 and 2001, according to the Federal Reserve's triennial Survey of Consumer Finances released Thursday.

...

Net worth: Median net worth rose 1.5 percent, to $93,100, meaning half of all households had a higher net worth. By contrast, between 1998 and 2001, the median net worth increased 10.3 percent.

...

Income: A decline in wages also helped account for the slow growth in net worth.... The growth in income was the slowest since the Fed's 1992 survey, when median income actually fell.6.7 percent, to $35,100, between 1989 and 1992.

Savings: The percent of families who said they'd saved in the preceding year fell 3.1 percentage points, to 56.1 percent.

[MADem]

26. But, but...I thought the economy was just swell!!

Isn't that what the fearless leader keeps telling us???

Could it be that figures don't lie??? Unlike our President, Mister Rosy Scenario???

[Ben Ceremos]

28. What average American family?

Earning $70,000.00 in 2004? Almost all the middleclass people I know are making do on 50,000. or less.

[Indy Lurker]

30. Median Income for a family of 4

Here are the current numbers from US census

http://www.census.gov/hhes/income/4person.html





United States $65,093




Of course it varies by state:


*** Sorted by State***


Alabama 55,448
Alaska 72,110
Arizona 58,206
Arkansas 48,353
California 67,814
Colorado 71,559
Connecticut 86,001
Delaware 72,680
District of Columbia 56,067
Florida 58,605
Georgia 62,294
Hawaii 71,320
Idaho 53,376
Illinois 72,368
Indiana 65,009
Iowa 64,341
Kansas 64,215
Kentucky 53,198
Louisiana 50,529
Maine 59,596
Maryland 82,363
Massachusetts 82,561
Michigan 68,602
Minnesota 76,733
Mississippi 46,570
Missouri 64,128
Montana 49,124
Nebraska 63,625
Nevada 63,005
New Hampshire 79,339
New Jersey 87,412
New Mexico 45,867
New York 69,354
North Carolina 56,712
North Dakota 57,092
Ohio 66,066
Oklahoma 50,216
Oregon 61,570
Pennsylvania 68,578
Rhode Island 71,098
South Carolina 56,433
South Dakota 59,272
Tennessee 55,401
Texas 54,554
Utah 62,032
Vermont 65,876
Virginia 71,697
Washington 69,130
West Virginia 46,169
Wisconsin 69,010
Wyoming 56,065



*** Sorted by Income ***

New Jersey 87,412
Connecticut 86,001
Massachusetts 82,561
Maryland 82,363
New Hampshire 79,339
Minnesota 76,733
Delaware 72,680
Illinois 72,368
Alaska 72,110
Virginia 71,697
Colorado 71,559
Hawaii 71,320
Rhode Island 71,098
New York 69,354
Washington 69,130
Wisconsin 69,010
Michigan 68,602
Pennsylvania 68,578
California 67,814
Ohio 66,066
Vermont 65,876
Indiana 65,009
Iowa 64,341
Kansas 64,215
Missouri 64,128
Nebraska 63,625
Nevada 63,005
Georgia 62,294
Utah 62,032
Oregon 61,570
Maine 59,596
South Dakota 59,272
Florida 58,605
Arizona 58,206
North Dakota 57,092
North Carolina 56,712
South Carolina 56,433
District of Columbia 56,067
Wyoming 56,065
Alabama 55,448
Tennessee 55,401
Texas 54,554
Idaho 53,376
Kentucky 53,198
Louisiana 50,529
Oklahoma 50,216
Montana 49,124
Arkansas 48,353
Mississippi 46,570
West Virginia 46,169
New Mexico 45,867

[OKNancy]

34. kick

[papau]

35. Federal Reserve reports Average Family Income dropped 2.3% - 2001 to 04

Federal Reserve reports Average Family Income dropped 2.3% - 2001 to 04

The average income of American families, adjusted for inflation, fell
2.3% to $70,700 in 2004 compared with 2001, according to the Federal
Reserve. The median, or point where half the families earned more
and half less, did rise slightly in 2004 (after adjusting for
inflation) to $43,200, up 1.6% from the 2001 level. The median, or
midpoint, for net worth rose 1.5% to $93,100 from 2001 to 2004. The
Fed survey found the share of Americans' financial assets invested in
stocks fell to 17.6% in 2004 from 21.7% in 2001, while the percentage
of Americans who owned stocks, either directly or through a mutual
fund, fell 3.3 percentage points to 48.6% in 2004, down from 51.9% in
2001. The survey found the percentage of families with some type of
tax-deferred retirement account, such as a 401(k), fell 2.5 percentage
points to 49.7% of all families – however, the median for holdings in
retirement accounts rose 13.9% to $35,200

http://www.federalreserve.gov/pubs/bulletin/2006/financesurvey.pdf

[nickinSTL]

36. ours dropped a lot more than that

let's see...doing the math...58.93%

Of course...we're probably not average.

Oh, and we make less than half of the "average income of American families".

And about $10k less than the median income.

[ChairmanAgnostic]

37. propaganda! Pure and Evil.

Why, the top 1.5% of the population earned 30% more over that time period, before the tax cuts. So all this naysaying is traitorous, evil and just anti-american.



Whereas Chicago's NPR noted yesterday that food kitchens in the area served more than 1,000,000 meals last year, far more than the year before. And they are going broke because faith based initiatives have cut funding to them. Most people only got one meal a day, some got two. That is a lot of meals a day.
In a study in Appalacia, there were annecdotal reports that 20% of the extremely poor were reporting going hungry more than one day a week. So much for our being the richest, most democratic and most civilized country in the world. Our brothers and sisters starve, while Haliburton steals us blind. Not to mention building and deploying untested, non-working missile systems in Alaska.

I am so mad at this administration that I could scream. Why, I think I will. Right now.



Damn. Doesn't help.

[papau]

38. Our US Media will prevent these facts from spoiling our weekend

They will not be allowed on Sunday talk unless the "opposing side" - whoever that is in terms of a Federal Reserve Report - sends a speaker.

[Dr Batsen D Belfry]

39. I am am down 33%

this past year alone.

This economy SUCKS. I am now a member of the "ownership society" by necessity, trying to make a go of it. If I succeed, I am selling and getting the fuck out of here.

DBDB