Wednesday, January 18, 2012

Income Disparity

Ah, the things you can do with statistics:
Inconvenient truth: the distribution of income in the U.S. is basically the same as it was a quarter-century ago—and the middle class has gained ground over the last decade...

In other words, most of the reported rise in income disparity since 1979 had already occurred by 1986, and there has been no significant trend since then.

There’s more. From 2000 to 2009, tax filers with adjusted gross income of at least $500,000, who represented the top 0.5 percent of all returns in both years (similar in spirit to the CBO report, which looks at the top 1 percent of households), saw their average adjusted gross income decline by 15 percent and their average after-tax income decline by 11 percent. All other filers—the 99.5 percent—saw average increases of 15 percent in AGI and 17 percent in after-tax income. The middle class has not “lost ground” over the last decade.
If this is true, why might some want to make claims about income disparity--claims that are unsupported by data? I wonder....

5 comments:

Ellen K said...

I doubt that this will even be mentioned in the sidebar of the media websites.

mazenko said...

Or not. All depends on what your definition of "is is. Plenty of arguments for increased disparity and lost ground by the middle class.

allen (in Michigan) said...

Plenty of arguments for increased disparity and lost ground by the middle class.

None of them valid but if they serve to inflame emotions and elect people who are happy to carve a pie they have no hand in baking, then the purpose of those arguments is served.

Bill said...

Yes, this is what happens when you cherry-pick data. Almost all of the loss in the top returns is from the market crash, which effected the income of the top percent, but the savings of the middle class.

Why would people make claims about income disparity? Possibly because they're true...

Anonymous said...

I have found plenty of data to the contrary. I for one, a California teacher, have most definitely lost economic ground this century.

I cannot recall the last time my district awarded a COLA (so, it has to be at least 5-6 years ago), and this year I am weathering a 5% pay decrease.

My husband's wages have stagnated, and declined, over the past 12-15 years. He now typically earns less than he was earning in the 1990s for the same work (independent software engineer, self-employed).

We are noticing the change in our standard of living, vacations are fewer and farther between, we have had to dip into reserves during 2011 (once) and 2010 (also once) to fund our budget during months that were a little higher ($$) than expected (something we NEVER did in over 20 years of marriage.

I don't know where you got your data, unless you are looking at some of the data that is spun calculating the cost of living changes on a few limited categories that conveniently ignore others.