Wouldn’t the large number of Americans in their 20s living in their parents homes have affected this?
I suspect a lot of those who have moved back into their parents’ homes were likely earning below the median household income. Remove them as a household, and suddenly the median family is one higher on the income scale.
I would say it is wiser to draw a conclusion using the census household size data, since the headline statistic of household income is also sourced from the census. Why compare apples and oranges when you have apples and apples?
Well the inferences would only be as good as the sampling then. I know for me, the census was the last thing that was on my mind, and it was only completed it because my spouse was did it. There has been many issues with Census data collection (take a google news search).
This data is from the Current Population Survey where they select households and then either visit or call on the phone. It's not a thing where they just mail out the survey. The CPS also repeatedly selects the same household in consecutive surveys, which gives them continuity that other surveys lack.
I don't know! The article that supposedly upholds the theory of slow household growth is discussing a forecast of the 2020 decennial census and says nothing about 2019. The income data we are discussing is for 2019 only. These two things do not really stand in opposition to each other.
Given the context the the article provides, and that the raw table does not, I am inclined to believe the pew research article, and would suggest the linked table needs to also have some methodology and definition of what it thinks it is and is not capturing.
The pew article also looks at statistics like "In 2019, 20% of households are shared households, up from 17% in 2007."
The weakness in the pew article is it's forecasting growth in household size from one year of its model, obviously we need to wait more time to see if it's model is correct.
I have the opposite assumption: the raw data is usually more reliable than an editorial. And I confirmed it: the raw table is more reliable since it is the same survey across different years. The article is inconsistently comparing numbers from 2 different surveys. The 2018 figure (2.63) is from the "American Community Survey" and the 2010 figure (2.58) is from "Census SF1 data".
from which they mention "By 2016, 20% of Americans lived in a multigenerational household, up from 12% in 1980"
One survey is one survey, multiple data points from a set of different perspectives is more comprehensive an analysis and less susceptible to single measurement methodology errors.
The main thing I take from this is that movement of a household income number is fairy meaningless unless you also know what household size number is measured or calculated with the income number.
I came here to say this is mostly likely the cause.
We're looking at is households, and the easiest way to explain this jump is actually that the economy is more fucked than ever and more working age people are living together. If we consider the type articles you're referencing, that have been noting the migration of young, educated, working-age adults back to their parents homes in the USA-- we should very well expect to see a large spike in the reported median household income. The same growth would be true if more people were living in situations with roommates where ideally they wouldn't.
Here's the definition of a household from the linked article:
> A family household is a household maintained by a householder who is related to at least one other person in the house-hold by birth, marriage, or adoption and includes any unrelated individuals who may be residing there. A nonfamily household is a householder living alone (a one-person household) or sharing the home exclusively with nonrelatives.
Addendum: I'd like to note, that even if household size itself appears to be low; that's likely due to reproduction rates being on the decline as more people, on average, are having smaller families each year...
> The 2019 real median earnings of men ($57,456) and women ($47,299) who worked full-time, year-round increased by 2.1 percent and 3.0 percent, respectively (Figure 4 and Table A-6).
Hm, I wonder how you reconcile this with the other summary finding that
> the real median earnings of full-time, year-round workers increased 0.8 percent between 2018 and 2019
Seems like this is the wealth gap, coupled with an increase of the proportion of females working full-time in the workforce.
> The number of females who were full-time, year-round workers increased by about 1.2 million between 2018 and 2019, while the change for their male counterparts was not statistically significant.
No.. household is a tax and income thing. Parents cannot claim 18+ year olds as dependents unless they are actually dependent (e.g. disabled/guardian etc...)
Not according to their glossary:
"
Household
A household consists of all the persons who occupy a house, an apartment, or other group of rooms, or a room, which constitutes a housing unit. A group of rooms or a single room is regarded as a housing unit when it is occupied as separate living quarters; that is, when the occupants do not live with any other person in the structure, and when there is direct access from the outside or through a common hall. The count of households excludes persons living in group quarters, such as military barracks and institutions. Inmates of institutions (mentalhospitals, rest homes, correctional institutions, etc.) are not included in the survey.
"
"
The number if people in your household does not alter your tax liability, only the number of dependents in that group. Those who qualify as dependents are: “your biological child, stepchild, foster child, sibling, step-sibling, or a descendant of any of these individually... but the child can’t turn 19 at any time during the tax year (age 24 if a full-time student).”
> Wouldn’t the large number of Americans in their 20s living in their parents homes have affected this?
Yeah, in many ways a more interesting figure would be median adult income, but household (which has real comparability problems across time) is the popular number.
> Individual worker median income change is in the report too,
And is still not individual adult median income, and like median household income is a measure whose rise can indicate bad outcomes: where with median household income the factor that causes this is that it increases, cet. par., with more adults/household, with median individual workers it goes up if people who were previously working but at the low end of the distribution just lose their jobs.
No, I'm saying an individual worker median income is not the same as individual median income, and it is quite possible for the former to go up when the latter goes down.
As a simple case, consider a situation with 100% enployment and any non-uniform income distribution you want as the “before”, and the situation where everyone below the median in the “before” loses their job and has 0 income as the “after”, while everyone else remains employed with the same income as before.
> Overall, non-response increased significantly and was more strongly associated with income than in previous years, with non-response decreasing with income, meaning that income data could be skewed higher than it actually was.
I don't see how calculations would trend in a particular direction if they weren't literally collected in this calendar year.
It's still confusing as hell.
Also, is this addendum, by the census themselves:
> When correcting for non-response bias in 2019, the Census found that real median income was $66,790, 2.8% lower than reported in the official release.
This report uses the characteristics of
the householder to describe the household.
The householder is the person (or one of the
people) in whose name the home is owned
or rented and the person to whom the
relationship of other household members
is recorded. If a married couple owns the
home jointly, either spouse may be listed
as the householder. Since only one person
in each household is designated as the
householder, the number of householders
is equal to the number of households. The
count of households in this report excludes
group quarters.
(dont have time to parse through, but I suspect that there is only one head of household, and thus it means a child who is 18+ living with their parents, they are basically aren't even considered in the calculation)
Pretty dense report with lots of interesting statistics.
These got my attention:
The 2019 poverty rate of 10.5 percent is the lowest rate observed since estimates were initially published in 1959
The 2019 real median incomes of White, Black, Asian, and Hispanic households all increased from their 2018 medians [between 5.7% (Blacks) and 10.6% (Asians)]
Percentage change in share of aggregate income was highest for the lowest income quintile (+1.8%). High income quintile saw decrease in share of aggregate income (-0.6%)
The poverty line has not scaled with the increase in expenditures associated with modern living, nor increased worker value. The only adjustments made in the last half-century have been for inflation and bare-minimum at that.
America is a lot more poor than these statistics let on when compared to the rest of the first world. Furthermore debt is not considered in many such analyses.
And its easily higher is what people don't know. I feel like people don't understand living here that the issue is life is generally just hard. If you are having issue in the US good luck everywhere else in the world and even the first world.
They include retirement income as income, but do they exclude retirement savings? In US there’s a huge burden to save for your own retirement, and modern retirement vehicles (e.g. 401k and IRA) pay out in full even if you die young (no longevity risk pooling), so they’re a lot more expensive to fund.
It's PPP adjusted disposable income after all taxes and transfers, so that includes Social Security, welfare, etc.
It's debatable if this is able to adequately capture all forms of non-cash transfers (like food stamps). To get around this, the World Bank uses consumption as a metric for well-being. By that metric, the poorest 20% consume more than the average person in most OECD countries[1][2], including Canada, the UK, Sweden, Australia, Japan, Denmark, New Zealand, and Iceland.
I was referring to money set away for retirement. Since moving from Norway to US, I can’t really spend all my disposable income, given that maximum social security benefits are so low.
Using my google skills it looks like the maximum supplemental pension in Norway is NOK 293 583 or $32,216 USD.[1]
The maximum US social security pension is $49,680 USD.[2]
Obviously it scales based on income, but at least for US tech workers, you're likely to get close to the maximum amount since you'd be earning over $110,000 for a significant chunk of your career.
The US has a much higher maximum pension amount than Canada, where it's $1,176 CAD or $889 USD. You do get an old age benefit on top of $613 CAD, which bring it up to $1,351 USD or $16,212 USD per year.
You shouldn't look only at supplementary pension for Norway. Everyone gets the basic pension as well, and if you're employed your employer must also contribute on your behalf.
Disclaimer: this is awfully complicated, and I’m not an expert
What’s most relevant for this discussion is the system for people who are earning now for retirement in the future. The amounts are adjusted yearly, but the current maximum rate is about $14300. This is tax funded, and so doesn’t come out of your disposable income. Gaps from illness, unemployment, military service and caregiving are covered. When you start withdrawal, the accrued amount is adjusted for changes in the average national income and your life expectancy based on your age. I.e. the money is paid back to you at a rate that draws your balance to zero at the expected date of your death. If you live longer, it keeps going of course, funded by the people who die earlier. The maximum rate is therefore achieved by retiring at the oldest age (74), or roughly $97000/year with today’s numbers. This would require making well above the national average salary starting at age 13.
If you max out your income based pension described above, the base pension gets reduced substantially. Looks like it can go as low as $4300/year of benefits currently.
On top of these two pension types, your employer must save at least 2% of your income up to $134000, and pay for insurance that covers contributions if you become disabled. The employer must cover all associated costs. These plans vary a lot and have no maximum.
I will add that you need substantially less income in retirement in Norway since you won’t be paying for healthcare, and property taxes are extremely low.
I didn't say America's median population or poverty class was more poor than other developed countries, I said they're just a lot more poor than these statistics let on. Big difference.
Your interpretation of what I said is incorrect, I don't know what to tell you. Read it a few more times. That sentence makes no claim that America is poorer than any other country.
Yes. It’s based on OECD data, which uses PPP dollars. (Purchasing power parity dollars.) The US makes a classic average case versus worst case trade-off. The bottom 20% in the US are poorer than in other Western countries and there is less of a safety net. But in terms of material lifestyle, the median is better off.
I'm not sure I'd say the US has consciously made that tradeoff, though maybe you aren't claiming that. If anything it's likely a side-effect, imo.
The median at any snapshot in time is materially better off, but also much more stressed out than people in other wealthy countries about whether they might end up in a very bad economic situation, due to how there is barely any bottom. Subjectively, middle-income Americans don't feel well off and don't feel secure in even what they have. For example, numbers vary based on the specific survey, but about 60-70% of Americans consistently feel high levels of stress about money. I'm not sure that's a course that would've been taken by a 50th-percentile person trying to optimize their own well-being?
One reason Scandinavian countries tend to come near the top of those "happiest countries in the world" surveys (though I don't like the term "happy" for it) isn't from any particular joyfulness, but because the typical household subjectively has very low levels of economic fear or stress. Some of the survey questions that go into that score include things like, do you feel economically secure, do you worry about losing your housing, etc. A huge percentage of even middle-class Americans spend a lot of their time worrying about that (including my family), while the majority of middle-income people from say Denmark don't consider it a big risk to worry about.
> I'm not sure I'd say the US has consciously made that tradeoff, though maybe you aren't claiming that. If anything it's likely a side-effect, imo.
The US has consciously made that trade-off. See how even Sanders doesn't propose to raise taxes on people making under $250,000, and Biden is up at $400,000. The top income tax rate in the Scandinavian countries kicks in at around $70,000.
In Maryland, you have to make $350,000 before you’re taxed at similar rates to what an entry level white collar worker pays in Germany. (I know this because our au pair paid a similar percentage rate at her job in Germany to what my wife and I pay as two attorneys working in private practice.) It’s impossible to provide a safety net like they have in Europe while simultaneously promising not to raise our extremely low tax rates on people making $250,000 or $400,000. When even Sanders makes that promise, that is an indication of how strongly voters choose to keep taxes low versus investing in a safety net.
How does this explain why, compared to middle-income Germans, middle-income Marylanders have low life satisfaction, feel economically insecure, and die younger?
It’s not dissimilar from that of Germany (0.935 vs 0.939), and it’s higher than that of most other OECD nations.
As for average life expectancy: the average is brought down by outliers. In general, the US has a higher homicide rate, a higher motor vehicle death rate, a higher obesity rate, and a higher opioid/drug death rate. These external factors all bring down the average life expectancy number more substantially than in other countries: https://randomcriticalanalysis.com/2017/05/16/the-explanator...
I’m referring to your specific point here: “I'm not sure I'd say the US has consciously made that tradeoff.”
Even if you assume the lack of a safety net causes the symptoms above, my point is that the lack of a safety net is deliberate, because even our left wing party promises not to raise taxes enough to actually fund a more robust safety net.
Apart from that, the life expectancy of white Marylanders is 80 years, just a bit shorter than for Germans (80.9 years). But 30% of our state’s population is from a minority group that was enslaved on Maryland plantations, and then denied civil rights until very recently. If bill gates had been born in the county where I live as a Black kid, he would have gone to a segregated school until middle school. Their life expectancy is several years lower, due to the legacy of those injustices.
Many of the differences between the US and European countries are misdiagnosed as matters of general policy (safety net, healthcare). But when you break it down, much of the difference is actually the result of the country’s history and large Black-white gaps in many indicators. The median white household, for example, has 10 times the wealth of the median Black household—a fact that plays a huge role in people feeling economically insecure. But those gaps can not necessarily be fixed with the same policy choices that European countries apply to their general populations. That wealth gap, for example, has not changed since the 1960s, when Maryland schools were still segregated—despite a large growth in general social welfare spending since that time. It is a unique challenge that requires targeted solutions, and there is no political will to implement those policies. These policy challenges simply have no parallel in Germany.
People measure many things. For example, you mention that debt isn't considered here; wealth metrics are widely studied, the poverty line just doesn't happen to be a wealth metric, but rather an income measure.
I am not sure I fully comprehend the remark "The poverty line has not scaled with the increase in expenditures associated with modern living." It adjusts with inflation, and the inflation metric tries to stay relevant: the CPI basket includes housing, medical treatment and drugs, tuition, TVs, cell phones, etc. I guess the criticism comes down to the idea that somehow a cell phone should somehow adjust from an assumption of 0 from times before cell phones were popular?
If we do something like that, it sounds really hard to get things right (CPI is already pretty hard to get right). What would it mean to say that standard of living improvements are outpacing alleviation of poverty? That sort of metric seems something suited for sophisticated research, not a standard government metric.
Another important thing to do, one might note, that addresses some of the concern about losing track, is to take a fixed proportion of people - e.g. the bottom quintile of income earners - and study various aspects affecting their lives. This is, as I understand it, really widespread.
So adjusting for inflation, which tracks the relative buying power of the dollar across common goods and services, is not representing the cost of modern living?
I know it has some areas that may be under-represented, but in general it tracks the same changes in the power of the dollar across multiple categories. Changing what the inflation metrics track would make it an even poorer standard for comparison/tracking.
There is no source for that, it is not true. The world bank’s preferred metric for material welfare is PPP adjusted consumption (because for instance, food stamps aren’t income), and because poverty measurements are only relative to people within one country, not between multiple countries.
When you measure that, the poorest 20% of Americans have a superior level of welfare to the average person in most OECD countries.
You can see on table 6.5 in the study linked below that lowest quintile households (by income) consumed an average of $57,049 goods and services per household, which is just under $22k per person. Putting the lowest 20% of the US in the top half of OECD countries for that year.
Definitely need some support for that claim. I've heard the opposite claim that poor Americans are better off (save healthcare) than poor in other countries. But like the above, that was hearsay and I'm not sure I would believe either claim without some stats to back that up.
You'll see a lot of empty claims that the US has practically no social safety net. That's plainly false. That it's not as good/effective as eg France, Sweden, Denmark, Norway, etc., that much is true. Poor Americans get free healthcare, around just over 1/4 of all Americans receive free healthcare. ~24% of Americans are receiving Medicaid.
The US spends more on its social welfare programs, as a share of GDP, than Canada does, and it matches what Australia and Switzerland are spending. The US is close to the OECD middle and a bit behind the UK (OECD figures below):
And when it comes to improvements in poverty thanks to our vastly expanded social safety net, you can see that very strikingly represented when you drop out those programs from the calculations (childhood poverty shown below, with and without government aid):
The same thing shows up in our homelessness improvement figures from the past 20 years. The housing first program implemented by the Bush Administration and sustained by the Obama Administration - aka a government program - was almost solely responsible for the huge decrease in US homelessness.
The US social safety net has expanded rather massively in the past 40 years. Structurally the biggest problem the US has when it comes to its social safety net, is it's all haphazard and often poorly administered. The US isn't very good at running social safety nets, it's chaotic and critical parts of it are managed in very different ways state to state. We're not getting enough bang for our buck on that spending, we need to do better. We're spending a lot of money and the results are often not good enough (which we frequently see with government spending in the US). For example, if the US were spending per capita on our healthcare system what the UK is, we could nearly double - maybe up to 40%-45% - the number of people we're covering with free healthcare at minimal additional cost.
> The US isn't very good at running social safety nets, it's chaotic and critical parts of it are managed in very different ways state to state. We're not getting enough bang for our buck on that spending, we need to do better. We're spending a lot of money and the results are often not good enough
Typically, when someone is complaining about the lack of a social safety net in the US, they mean in terms of services received, rather than money spent.
As the above quote shows, you obviously know that because of various insane inefficiencies (often caused or abetted by perverse incentives at the interface between the public and private sectors) the point you're making of how much is spent in terms of % of GDP doesn't actually refute the complaints (about how little is being done for those in need) that you are objecting to.
So. We spend a heck of a lot, and we don't have a decent social safety net.
It's also worth noting that where social safety net programs are being poorly run by the government, this can sometimes be traced to politically motivated shenanigans and deliberate mismanagement.
This is a very accurate summary of the US social safety net. It’s very large, but some European countries spend more. But it’s also a bit of a bureaucratic mess and not that easy to navigate.
"well sourced" would be linking to the actual source with the citation, not expecting us to dig out the information. I'm not sure how they got to near 20% of US gdp being spent on social programs.
US GDP is 21 trillion, social program spending is under a trillion.
That is confusing, but it’s before and after “benefits and taxes”. So I assume back then some families didn’t qualify for benefits (but were above the poverty line), but after accounting for taxes, they slipped below the poverty line.
I think you misread my comment like many others. I made no claim we're doing worse than other developed countries. I just pointed out that these statistics don't capture the entire picture and we're worse off than they let on.
Why is household income such a common statistic to use - it seems like it doesn't tell us much unless you at least normalize it by the number of earners in the house and the cost of rent?
For example - I'm pretty sure large numbers of people living together and sharing rent is way more common nowadays than it used to be. From 18 - 25 (I'm 27 now) I was always living in a house with at least 3 other people (usually 4-5), because that was literally the only way I could afford to pay rent if I wanted to eat as well and I'm still splitting rent 50/50 with one other person now.
Most of us were working (low paid) full time jobs, so our total household income would have been pretty big - but this situation is obviously not at all an improvement over what we had a few decades ago when one minimum wage full time income could afford their own house and a full belly.
It's used (historically) because household income is one of the best determinants of living standard for a great majority of individuals under "typical" living conditions.
I.e. if you have one high income earner, married to a low income earner, supporting one or two no income earners living together in a household, its inaccurate to split those out and consider or calculate those statistics as individuals. Most households historically live a lifestyle more akin to pooling and sharing income and resources.
But, as you rightfully point out, when I was calculating them, we also tended to use equivalised-household incomes (to take into account the different resources and structures used by the number of children vs adults living together). 'Course you also then have to worry about things like imputed rent and drawing on access to capital/resources that don't turn up in economic or monetary flows.
The short answer for why its used is probably like most economic statistics: its calculable and easily available and people think they understand it (even if they don't).
Really unless I'm missing something increasing average/median household income could be an indicator of housing availability getting worse, not better.
This survey comes with a chapter-length caveat that says the current data should not be used to compare with the prior year, because the survey response rate was exceptionally low and potentially biased by COVID-19. The survey was conducted in spring of 2020 and asks respondents to report their 2019 income, which is where the estimate of 2019 HH income growth is coming from. But, beginning on page G-9 (353rd page) of [1] the Census itself says:
""" it is likely that the characteristics of people for whom a telephone number was found may be systematically different from the people for whom the Census Bureau was unable to obtain a telephone number. While the Census Bureau creates weights designed to adjust for nonresponse and to control weighted counts to independent population estimates by age, sex, race, and Hispanic origin, the magnitude of the increase in (and differential nature of) nonresponse related to the pandemic likely reduced their effectiveness. Using administrative data, Census Bureau researchers have documented that there are more (and larger) differences between respondents and nonrespondents in 2020 than in the prior three years. Of particular interest for the estimates in the ASEC reports are the differences in median income and educational attainment, indicating that respondents in 2020 had relatively higher income and were more educated than nonrespondents."""
second+ order effects of tax policy have effects on pre-tax income distribution, just as do second+ order effects of benefits policy have effects on pre-benefits income distribution.
Quite often, arguments about the likely second+ order effects are major arguments for or against tax and benefit policy changes; it's not all about first order effects in isolation.
This[1] is from the year prior, but it indicates that wages may not be going up and causing income to go up. People may just be working more. Not sure if it applies to 2019 as well, though.
I think there’s a non-trivial number of Americans who have adopted a belief system that we’re a crap country and don’t want to hear anything that contradicts that narrative. It seems like a lot of folks also shift into and out of that category when their preferred red or blue team is in the White House.
Yeh the america is bad crowd is out here in full effect trying to say other places have it better. When the reality is life is hard and its actually much hard everywhere else. There is no easy mode to this.
The difference between 88 and 90 isn’t important here. This is directly in response to your claim that “Generally everyone in the US views the US negatively right now.”
Perhaps that’s true in late 2020 amidst a once-in-generation pandemic and the inevitable economic fallout that’s gripped the entire world. But these pre-COVID US Census numbers mostly line up with the overwhelming pre-COVID sentiment. I don’t know why that’s so surprising/off-putting to you.
"US satisfaction" surveys don't do a good job of telling us how people feel about their economic well-being, because it is also a survey of social issues, foreign policy, etc. It's a survey of how Americans feel about the government. While important, it's a polluted data-point in the context of income and poverty in the United States, which is the topic at hand here.
The personal satisfaction survey captures exactly what we're talking about: how Americans feel about their personal well-being, and that's primarily driven by their personal access to resources/goods/services — in other words, their economic well-being.
> Your narrative games don't work on actual intellectuals. Sorry.
Not going to touch this, but you might be overestimating the positive effect statements like this have on your argument's credibility.
According to BEA, "State personal income increased 4.4 percent in 2019, after increasing 5.6 percent in 2018". This is not median data, so the median would likely have increased even less.
Oh you’re not talking about the FRED data, which examines real median personal income over time (which has been constantly increasing).
You’re talking about why the BEA data doesn’t line up with the US Census Bureau data for 2019. That’s probably because the BEA data is average growth while the US Census data shows the median income growth. For year 2019, we noticed that wage growth was largely driven by the lower quintiles: https://www.hiringlab.org/2019/03/05/february-jobs-report-pr...
This can largely explain the discrepancy. In other words, the assertion that “median would have increased even less” actually turned out to not be true, empirically.
Sure, we have seen "anomalous" years for median earners from time to time, but it's important to remember that over time real median income has still been increasing as a function of the business cycle — I.e. the first derivative has always been positive during bull economies (see: FRED historic data). Sometimes the second derivative is also positive, which isn't uncommon. In 2019, the second derivative was not only positive, it was very positive.
That’s interesting but I think also a little misleading. The income brackets are held in constant dollars, which is helpful, but many of the important things in life have scaled like crazy in constant dollars as well.
$100k equivalent income in the 1960s was enough to buy a family home almost anywhere, and now it’s not enough to buy a family home in most major metros.
The way that CPI inflation is calculated accounts for spending pattern changes already, including mortgage/rent. If you don't have a nuanced critique of the CPI calculation method, I'd argue that this point is moot.
It's also worth pointing out that the average square footage of a home has grown considerably in this time, and that even if you are comparing a similar sized home, it is unfair to compare a home 3 miles from city center in a city of 1 million people to the same in a city of 2 million people, after it has grown through the years.
Interesting to see such a good improvement. My questions is why the Fed cut interest rates in 2019. Everything i read is the economy is strong. Curious what the fed saw that warranted a drop in the interest rate.
They started cutting because broad economic growth was softening noticeably.
The labor market was extremely tight though, which was pushing wages up at an accelerating rate. Most of the slack in the labor market was gone.
GDP growth had been grinding lower for multiple years, the very long economic expansion was probably increasingly due for a recession (which we have now gotten out of the way).
If a more natural recession had occurred circa 2020 or 2021 (without the pandemic), it likely would have been shallow, with the Fed always guns-ready to pump (since the great recession). The economy was strong in the sense that there wasn't anything major structurally wrong with it such that it was about to implode, however growth was not anything to write home about leading up to the pandemic.
This is good to see but I’m curious how 2020 will turn out. I would guess that with with the pandemic driven shutdown median household income will drop pretty dramatically. Maybe more than this 6.8% gain.
My only problem is that it comes along with rising inequality. We needed to have more billionaires and multimillionaires (and thus raise asset values and debt much higher) for the wage increases to happen. Which basically means that the wage increases don't lead to a better quality of life.
Wage i.e. income increased is exactly what did happen. Billionaires and millionaires aren't bad. And income equality not a good goal. If we create more rich people at the same time incomes increase for the lower and middle class at historic who cares about the ratio split.
Equality isn't a good goal. But expansive inequality isn't either.
I'm not arguing for socialism. I'm arguing for proportionate slice of the pie for the work done. The share of the pie is heavily skewed towards owning wealth in the first place today and the only way to keep the vast majority employed seems to be making the rich richer.
If expansive inequality isn't the goal why does it matter.
What does the percent of the pie matter even if you slice is getting bigger at historic paces because the pie in general is bigger. Would you rather have a higher percentage of a smaller pie or a lower percentage of a smaller pie.
Equality isn't the goal, equal opportunity is and higher standard of living I'd guess and focusing on equity may not be helping.
Its basically been growing like crazy since 2008. Check out the difference between the US growth vs most first world countries growth. The GDP per capita was 45k in 2008 and 48k in 2019. The US when from 48k to 63k.
> The 2019 real median earnings of men ($57,456) and women ($47,299) who worked full-time, year-round increased by 2.1 percent and 3.0 percent, respectively
If individual earnings gains are less than household income gains, it means people aren't necessarily making more money, it means they're working more total hours. I don't consider this a good thing for the richest country in the world. It's also interesting to note that women earnings increased almost a full percentage more than mens.
I feel like the inflation measurement is BS. It tracks prices of goods, but doesn't account for people paying for things they didn't pay for in the past (day care, bottled water, health insurance, retirement savings), and comparing that to their income. 25 years ago it was normal for families to live fairly well-off on a single income...nowadays you'd barely make ends meet.
It's deceiving nowadays because we're basically living the same lifestyle quality we were 25 years ago, except that either both parents are working like dogs, or the even sadder reality of couples foregoing/delaying kids because of their finances.
This is median, so maybe if you're saying the mechanism is fewer low income jobs available? 15/hr at 40h/50wk is 30k, so it would not raise median to bring the floor up.
The other logical conculsion is the President doesn't really have much effect on the these numbers. It looks like increasing incomes and decreasing poverty have been on a steady clip no matter which party is holding office.
I think it shows the strength of American capitalism. Millions of people on the ground, making the best decisions for themselves are improving conditions for everyone. Thus giving us more improvement than a person at the top trying to make decisions for millions of people.
I am curious which of the policies by democrats are zero-sum economic fallacy. I would say it is Trump's trade policy that seems grounded in zero sum thinking, which have been harmful.
Trump won in 2016 because a large portion of america was angry and not doing well, largely, the rust belt. Maybe you should go to them and tell them how well off they've been.
It is inarguable that increasing productivity and technology cause aggregate standard of living increases on a long enough time scale. We can quibble about localized effects, and it is true that technological change (for example) does sometimes leave some individuals behind temporarily. But in the very long history of humankind, never have so many lived so well. Never have so many lived with as much justifiable hope for a better future than in our recent years.
It's actually exactly the opposite: based on the World Bank's preferred indicator for well-being (consumption), the bottom 20% in the US do better than the middle class in most OECD countries.
Consumption is a proxy for access to resources, and is downstream of all transfers, which is why the World Bank uses it as the preferred metric for wellbeing.
The second website just summarizes the first paper, which is primary source. For your sake, I recommend attacking the substance of the argument rather than the entity making the argument.
For your sake, I recommend attempting to convince people with more than a 44 page economics pdf and oil propaganda (that article literally has green energy as the number 1 reason for the consumption disparity). Thanks
I don't have time at the moment to read through 44 pages of dense economics, but can you explain why some people think "consumption" is the right choice?
It sounds to me like "consumption" is approximately the same as "spending", which goes up whenever prices go up. Conflating consumption with wealth seems like a big mistake, if we are to truly evaluate the impact that materialism has on our long-term well being.
You don’t have to read 44 pages, it’s on Table 6.5, under the consumption for the lowest quintile. The second source does that work for you by simply summarizing the primary source.
Average life expectancy is lower for the same reason that average wealth in the US is higher than other countries: outliers.
The US has a higher homicide rate, a higher car accident rate, a higher opioid death rate, and a higher obesity rate. So you’re slightly more likely to die earlier if by gun, car, OxyContin, or Big Macs, which brings down the average.
Critically, the average life expectancy tells us very little about the state of the median American, or even a lower quintile American who avoids drugs and happy meals, and takes the bus.
Next time when you want to convey something make it direct. Table 6.5 is meaningless information if no one can directly reach it in a huge file.
Try to to give the exact page number.
Anyway I did waste my time to see what is on table 6.5, i see can year 2010, where is the more recent data?
If more people are dying by drugs, OxyContin and big Macs does that mean these people dont get access to healthcare/emergency services because they are poor or they are not educated because they are poor?
Isnt that a proxy to signal that people in other developed countries still have a better life compared to Americans?
> If more people are dying by drugs, OxyContin and big Macs does that mean these people dont get access to healthcare/emergency services because they are poor or they are not educated because they are poor?
It’s certainly reasonable conjecture, but there’s little evidence to suggest that lack of access to healthcare/emergency services is the root cause for the opioid epidemic. In fact, we now know the root cause to largely be the Purdue Sackler fraud — doctors were over-prescribing it. It’s ironically a proxy for abundant access to prescription medication.
Big Macs aren’t a necessity, it is more than easy to buy cheap and healthy food at the grocery store. This is especially true when you’re poor, because food stamps are currently prohibited for use at fast food restaurants.
> Isnt that a proxy to signal that people in other developed countries still have a better life compared to Americans?
No, it’s a proxy to signal that there exist a lot of Americans that exhibit poor personal lifestyle, and that America disproportionately allows individuals to live like that. Indeed, the data shows that if you live in America, eat healthy, and avoid drugs, your standard of living is comparable to, if not better than other developed countries.
The second link has the same 2010 chart, where is the more recent data?
That link also says "The OECD data is particularly flawed because it is based on “income,” which excludes a host of non-cash government benefits and private charity that are abundant in the United States"
A nation should not be dependent on handouts from rich people.
So without the handouts as per this link we can assume the US bottom folks are in worse condition.
> lot of Americans that exhibit poor personal lifestyle
Which comes back to education, which means they dont get proper education compared to their peers in other developed countries.
> disposable income in the US is among the highest in the developed world:
Yes but then why is poverty rate high as well compared to other developed nations.
> The second link has the same 2010 chart, where is the more recent data?
I'll have to find some more recent data — but the state of the world hasn't dramatically deteriorated since 2010. In fact, the opposite has happened: we've experienced recovery since the Financial Crisis of 2008, so we should expect the numbers to be even better. In many ways, 2010 represents the low watermark for most metrics.
> A nation should not be dependent on handouts from rich people.
Eh? Why not? This is certainly debatable and not some axiomatic truth. The vast majority of the world works on handouts from rich people — it either comes in the form of taxes and transfers, or voluntary handouts. In the US, we see that both play a role in maintaining the high standards of living we enjoy. All that matters is the standard of living, given the current set of systems. The disposable income and consumption metric is downstream of all potential sources of material income, which enables access to goods/services/resources.
Also, "without the handouts", if the state of the US deteriorates, this impacts the political will to turn voluntary handouts into taxes and transfers: you can't change a variable in the system, then conclude that all other variables will remain constant. And even if you do account for all variable changes, it's still a hypothetical. It's impossible to refute or falsify hypotheticals and counterfactuals.
> Which comes back to education, which means they dont get proper education compared to their peers in other developed countries.
In any case, if you’re making the argument that drug abuse and unhealthy diets are caused by the K-12 education system rather than cultural differences, you’re going to have to back that up. Pretty much everyone in the US attends an increasingly funded (though perhaps inefficiently administered) public school, where we learn that drugs are bad and that eating your vegetables is good.
> Yes but then why is poverty rate high as well compared to other developed nations.
Because poverty rate is a relative measure within the country, not a comparative measure across countries. We measure it by drawing a line in the income/wealth distribution, and determining the percentage that live below that line. What it doesn't tell us is how the absolute standard of living for someone below that line in country A compares to their counterpart in country B (ask yourself what it means to live in poverty in Switzerland vs Swaziland). It also doesn't account for taxes and transfers. That's exactly what the analyses I've linked shows. After taxes and transfers, the bottom 20% of Americans enjoy a higher standard of living than their counterparts in comparable OECD countries — measured by PPP adjusted disposable income and consumption.
Taxes fund welfare/entitlements, which are literally handouts. Your beef is with the mechanism by which the welfare is funded.
> Ultra rich people can change tax laws to benefit them so that they can throw some money on a charity. Why do you think that is good option?
I'm not making a value judgement, I'm showing you the current result of it. You took issue with the observation that consumption metrics include "handouts", implying a hypothetical that such handouts might cease to exist. I rebutted that hypotheticals are impossible to falsify, and that the real world results speak for themselves.
> Not sure why a random blog post is data point.
It's not a "random blog post", it's data published by Indeed's labor market research lab. In any case, the idea that the collective standard of living typically improves with bull markets, and that the last 10 years have been a bull market...isn't controversial.
> What cultural differences make Americans do more drugs and be more obese?
Great question, we don't know! But it's a phenomenon that we observe empirically: Americans on average consume more sugar, eat less healthy, and abuse more opioids. Evidence in the link I shared shows that simply changing that culture can bring the average life expectancy to parity with OECD peer nations (modulo car crashes and gun homicides).
> And yet US is behind among the developed world.
Again, you're using a metric that internally compares income, and using that to somehow make external comparisons between cohorts. "Inequality adjusted HDI" does not tell us what the absolute standard of living is, and it does not tell us how the poor in the US fare compared to poor people in other countries — it just tells us how unequal the US is. The poorest people in America could be richer than even the median earners of every other country, and the inequality-adjusted HDI wouldn't change all that much as long as there are ultra-rich billionaires like Bezos, Gates, et al. The GP comment claimed: "Isnt the US poor people in worse conditions than the poor in other developed countries?". Inequality-adjusted HDI is ill-equipped to answer that question. The specific answer to that question is "No", based on the specific, directly related metric that compares the standard of living of the bottom 20% of the US with their counterparts in other comparable OECD countries.
You wouldn't know that by looking at the inequality-adjusted HDI, because what it measures is completely unrelated.
To remind you again: Internally relative comparisons compared across countries (like inequality-adjusted HDI and poverty rate) tell us close to nothing about how well off (or not) the poor are. To suggest otherwise is just poor data science. The important metric as it relates to the GP commenter here are those that directly compare standards of living across countries, by income level (apples to apples) — and that's typically done by measuring PPP adjusted income and/or consumption by quintile, and then comparing those across countries.
> Your beef is with the mechanism by which the welfare is funded.
I still dont understand why do you think it better to depend on scraps thrown by rich people just because they are better at manipulation laws for their benefit?
>. I rebutted that hypotheticals are impossible to falsify, and that the real world results speak for themselves.
Maybe I missed that part where did you do that?
> it's data published by Indeed's labor market research lab.
So its just indeed's data which may not reflect the actual state of the market?
> Evidence in the link I shared shows that simply changing that culture can bring the average life expectancy to parity with OECD peer nations
Hypothetically everything is possible but in reality its not.
> The poorest people in America could be richer than even the median earners of every other country
Since you dont like the data, lets look at some actual use cases.
How much would a poor mother in US spend on pregnancy in a hospital, atleast in Australian Govt hospitals its zero dollars, is that the same in US?
> I still dont understand why do you think it better to depend on scraps thrown by rich people just because they are better at manipulation laws for their benefit?
I never said I think that, I never made any value judgements about charity. All I said was that: 1) it isn't some forgone conclusion that charity is inherently bad, or something we inherently have to replace entirely with government welfare, and 2) you have to look at the outcome of the system as it exists today, and per the OECD data, the poorest 20% of the US are richer than the average person in Canada, Greece, the UK, Sweden, Australia, etc — once you account for all forms of income, transfers, in kind benefits, charity, etc. When analyzing the standard of living for the bottom 20% in the US, it's a misrepresentation of reality to ignore charity because the US happens to be the most charitable nation on the planet: https://www.marketwatch.com/story/the-us-is-the-most-generou...
I also think it's a mischaracterization of the status quo to consider charity "scraps thrown by rich people". In general, you should try to articulate the best version of your opponents point of view before trying to defeat it. I'll do it for you: in the US, charity accounts for $427B per year — hardly "scraps": https://givingusa.org/giving-usa-2019-americans-gave-427-71-....
> Maybe I missed that part where did you do that?
By showing you the OECD rankings of per-person consumption, including the average consumption of the bottom 20% of US persons.
> So its just indeed's data which may not reflect the actual state of the market?
It's a compelling data point because Indeed is one of the largest job boards on the market today, and has income and employment data. In any case, because you don't like the data, I've found another source that corroborates Indeed's findings: the Federal Reserve Bank of Atlanta: https://www.cbsnews.com/news/low-wage-workers-are-getting-bi...
> Hypothetically everything is possible but in reality its not.
Just declaring it doesn't make it so. Per the actual data that I showed you, the majority of the variance in US's average life expectancy is attributable to lifestyle choices and cultural factors (obesity rate, opioid deaths, car travel, homicide rate). That data isn't a hypothetical. It stands to reason that changing this culture will provably bring the US's average life expectancy close to parity with OECD nations. It is also a demonstration of the folly of "averages" in general. When Bill Gates walks into a bar, the average wealth of everyone in the bar increases many-fold. Likewise, when an opioid addict walks into a bar, the average life expectancy of everyone in the bar falls.
> Since you dont like the data, lets look at some actual use cases.
No, I never said I "don't like the data", I pointed out that the data that you cited is completely unrelated to the question at hand: how do the poor in the US compare to the poor in other first world countries. "Inequality adjusted HDI" doesn't answer that question; it's totally unrelated. It would be like me citing the average SAT score among high school students in the world when answering the question: "which country has the best universities?"
> How much would a poor mother in US spend on pregnancy in a hospital, atleast in Australian Govt hospitals its zero dollars, is that the same in US?
A mother in the bottom 20% in the US would spend close to nothing on pregnancy in a hospital because they would be covered by Medicaid, in addition to receiving the Child Tax Credit for every child the mother already has (which was doubled in 2017). If the mother in the US was employed, they would also receive cash in the form of the Earned Income Tax Credit. If the mother was unemployed, they would qualify for unemployment insurance, and during the pandemic that's actually higher than the median wage.
In fact, one of the bigger problems with the US's healthcare system is that it's fragmented: https://twitter.com/CPopeHC/status/1234510323425652737 — 60% of Americans have some of the best healthcare in the world, and that includes Medicaid recipients, all of whom are in the bottom 20% in the US.
This is also why you need to look at total PPP adjusted consumption AFTER transfers and in-kind benefits, which is what the OECD data does.
Your link says charity given by individuals decreased while scraps thrown by rich people increases, thanks for defeating your own argument.
> the Federal Reserve Bank of Atlanta:
Which says wages are rising partly because the states are increasing their minimum wage. So you can thank the law not the employers for that.
> the majority of the variance in US's average life expectancy is attributable to lifestyle choices and cultural factors
Yes you claim that but when I asked you the reason, you dont know the answer and yet if the these hypothetical reasons are fixed it will magically fix the life expectancy. Do you see a flaw in your logic?
> A mother in the bottom 20% in the US would spend close to nothing
Is it nothing or close to nothing, it its close, what is it?
Poor people and even middle class people atleast in Australia dont have to jump though all these hoops, the cost is nothing.
Is jumping though all these hoops the reason why US has the highest maternal mortality rate among the developed world.
Why would a nation whose poorest 20% are richer than average OECD people have the highest maternal mortality rate?
> Your link says charity given by individuals decreased while scraps thrown by rich people increases, thanks for defeating your own argument.
What? My link shows that charity is more than just "scraps from the rich". It doesn't defeat the argument at all. It means that it's a reliable source of transfers for the poor, and therefore an amount you need to account for when computing standard of living and consumption. The NBER does this in a systematic way.
> Which says wages are rising partly because the states are increasing their minimum wage. So you can thank the law not the employers for that.
Sure, nobody ever claimed that the increase in standard of living is SOLELY due to economic growth, just that economic growth is a necessary but not solely sufficient condition for it. The central question at hand is how prosperous the poorest in the US are, given its institutions and welfare systems — BOTH public and private. It's why OECD metrics account for taxes and transfers, because as you rightly point out, you can't ignore them.
> Yes you claim that but when I asked you the reason, you dont know the answer and yet if the these hypothetical reasons are fixed it will magically fix the life expectancy. Do you see a flaw in your logic?
No, what I claim is that the variance in life expectancy is measurably attributable to lifestyle and cultural factors. Therefore changing the culture and lifestyle can provably close the gap. What I don't know the answer to is why the culture is the way it is, or how best to change it. Why does the average American cook cheeseburgers and casserole and drink Coca-Cola? Why does the average Japanese eat vegetable rice, healthy omega-3 fish dishes, and drink tea? Why do first-generation immigrants eat healthier than middle-class white Americans? These are cultural questions that are harder to answer.
> Is it nothing or close to nothing, it its close, what is it? Poor people and even middle class people atleast in Australia dont have to jump though all these hoops, the cost is nothing.
It's "close to nothing" because there are still co-pays for visits, just like in Australia. It can even be "literally nothing" depending on the circumstances because, in addition to Medicaid, the poor qualify for other transfer programs that can be used to cover even the cost of co-pays.
You don't "jump through hoops" to qualify for Medicaid, you just have to show that your income is below a certain level. I myself have qualified for Medicaid when I started a company after college and had no income. If your argument is that we ought to make it easier for poor people to get welfare, I don't disagree, but it's a serious mischaracterization of the status quo to suggest that we're not already generously funding welfare for the poor.
> Why would a nation whose poorest 20% are richer than average OECD people have the highest maternal mortality rate?
Because the flaw in your statement is assuming that the mortality rate is concentrated among the poorest 20%. In fact the poorest 20% have some of the best healthcare in the US. The fundamental problem in America is that if you happen to not be one of: {below poverty, employed, old}, you slip through the cracks and have inadequate healthcare. THAT is the problem.
Per my linked source, 30% of Americans have poor quality insurance (gaps), and 10% are uninsured — but importantly, the bottom 20% do not intersect with that set because they qualify for Medicaid. But this isn't a "the poor in the US are worse off" problem, this is a "the healthcare system in the US is a byzantine mess" problem, and there are various ways to specifically fix that (and not just the one proposal you keep hearing about).
Similar assertions were made during previous administrations. I suspect that such claims will not become less familiar as the partisan gap widens. I don't believe that outright fraud is happening in either case, but is our duty (and that of the press) to watch the numbers and methodology statements carefully. If the news was a bit more precise in its reporting of statistics it would go a long way to making large scale manipulation more difficult.
There is no rational, evidenced argument that the last four years has been on par with the Obama administration in terms of the corruption of political appointees, or the degradation of our institutions. The what-about-ism you put forth is a false equivalency in magnitude and kind.
We are in truly dangerous times, and I say this as a libertarian-leaning, conservative-friendly individual: Trump is an existential threat to our Republic.
I suspect a lot of those who have moved back into their parents’ homes were likely earning below the median household income. Remove them as a household, and suddenly the median family is one higher on the income scale.