Sunday, May 1, 2011

Americans and Money

 We all spend too much time trying to make money compared to what we would rather be doing.

Often I say that if people did not have to eat, then there would be many more poets and artists. Similarly I tell my kids to be practical about their job prospects.

Every year Parade Magazine runs an issue on What People Make, which is one of their most popular. I came across some census and polling data on income, and I thought I'd share it.

Data from the Census Dept 2010
The first graph shows two things, first  income for men  has been flat since 1974.  This is all in 2009 dollars -- meaning the effect of inflation has been erased.

This means all the GDP growth has not been going to individual guys. Of course there are more people now that before, but each individual is making the same amount.

Second women still make less than men. This is improving, but not that fast. 77% is surprisingly low.

I am not going to engage the sexual politics of income disparity between men and women. Way too complicated for today.

The above figure shows the average income in the USA in 2009 dollars. The average income is about $50,000. Middle class according to the census bureau goes from half that to 1.5 times that, or 25,000 to 75,000.

From Pew Research 2008
 One of the keys to the American Psyche is the American Dream, which is that anybody who works hard can become successful, for example become President.

This figure shows people assessment of how well their standard of living compares to their parent's.  See my previous post on this topic.

Upper income and middle income groups believe in the American dream. The lower income group is divided on whether the kids will have it better than their parents.

The housing price crash has certainly helped young people buy a house, and also degraded many older folks standard of living.

On the other hand, the rising cost of education is putting a higher and higher hurdle in front of high achievers from disadvantaged backgrounds.  Education is an important part of equality of opportunity.