Income statistics

Discussion in 'Money Talk$' started by billwald, Oct 15, 2009.

  1. billwald

    billwald
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    Why do we only read of median income and never of mean (average) income? Median family income is around $50K gross? Two adults working full time at $12.20/hour average? That's poverty wages!


    Rounding off to 10% accuracy to make the division easier . . .

    In 2007 the GDP (income from all sources) was $14,000,000,000,000 (14 trillion). The population is about 300 million. At 3 people/family, that's 100,000,000 families and an average income of $140,000/family. But the reported median family income is under $50,000/year. Why the big difference? Because the income distribution is not a bell curve.

    If the top 1% gets around half the income, then the 99%, 100K families are actually splitting half the GNP and the average family income is $70,000, closer but no cigar.

    The average income for the top 1% is then $7 trillion/1,000,000 families or $7,000,000/year. (Or did I mess up the math?)

    MY POINT? $50K/year is far from the MIDDLE number between $18K/year ($8/hour) and $7 million/year. THERE IS NO MIDDLE CLASS! There is only poor people and poor people with better jobs.
     
  2. Johnv

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    There's a good reason for that. The rules of avreages does not accurately indicate what a typical middle value is. Here's why:

    Three men are sitting in at a table having lunch. The first makes $25k a year, the second $30k a year, and the fourth $35k a year. The mean income is $30k, and so is the median.

    Now, Bill Gates walks in and sits down. and his income is $900k. The mean is now $247,500 a year. The median, however, is $32,500 a year. The median is a more accurate indicator of typical income.
     
    #2 Johnv, Oct 15, 2009
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  3. rbell

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    Funny...I know lots of middle class folks.

    Guess they must be mirages.


    Why the discontent, billwald? Do you think everyone ought to have the same amount of stuff?

    This sounds like an outgrowth of union indoctrination: wealth envy.
     
  4. billwald

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    >The median is a more accurate indicator of typical income.

    True, but with both numbers the skew becomes apparent. Typical income is poverty wages.

    >Why the discontent, billwald?

    I lived thru the best economic times since Adam got kicked out of the Garden. It was fun while it lasted but the game is over and will not return until after WW3, may THAT never happen. The kids are doing OK but the grandkids will have a much harder row to hoe.

    >This sounds like an outgrowth of union indoctrination: wealth envy.

    My pension is 3 times what we need. The Wife gives most of it to the kids and grandkids. We don't want to be the richest people in the graveyard.
     
  5. targus

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    It sounds like an admission that the unions with their demands for ever higher pay and benefits - even for union employees that don't work - killed the golden goose and forced jobs to be transplanted overseas.
     
  6. rbell

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    Good for you. That's a healthy approach.
     
  7. Johnv

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    One of the problems in discerning poverty level is that it varies widely from region to region. In Southern California, a $50,000 family income barely gets a person by. In Springdale, Arkansas, $50k will have you living quite well.
     
  8. targus

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    True, however most people live where they do by choice.

    Some choose to live in certain areas for reasons other than economics - but it is still a choice.
     
  9. Johnv

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    I would say everyone does so. No one is forced to live where they do. Anyone can move. Not easily, but anyone can do it.

    That said, it's not necessarily resonable to simply tell someone "just move to where it's cheaper". If everyone did that, it would no longer be cheaper in thos areas. OTOH, it's not the responsibility of the American public to subsidize peoples' incomes simply because they choose to live in a more expensive area, just like it's not the responsibility of the American public to subsidize the heating bill of someone who chooses to live in a cold climate.

    I live in a $550k house. Sounds like a lot, until you relaize that's close to average for a single family detached home in Orange County. The trade off is that my heating and cooling bills are only about $40, and I'm 5 minutes from work, 15 minutes from the beach, and 1 hour from some great snow skiing.
     
    #9 Johnv, Oct 16, 2009
    Last edited by a moderator: Oct 16, 2009
  10. targus

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    I agree.

    Additionally, it is probably the case that where the cost of living is lower so are wages - so it most likely balances out.
     
  11. billwald

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    The nature of poverty has changed. People on welfare have every sort of consumer good that rich people have but with inferior quality. The big difference is that rich people don't stand in lines.

    This doesn't bother and of you?


    The family with the $50,000 median income is probably spending all of it every year and
    his marginal tax rate is probably 25% on the taxable income between $33,950 and $82,250;
    plus $4,675 (unless he tithes <G>).

    The guy with the $7 million increase in assets may not have any INCOME. He has long term
    capital gains which is not taxable until he spends it. Say he spends $500,000 after
    deductions. His tax rate is 15% max and he pays $75,000 on his $7 million increase.

    Say the median guy has $33,951 of taxable income. He pays $4,675 plus $4,000 in Social
    Security taxes for a grand total of $8,657. The guy with $500,000 capital gains doesn't
    pay any SS. In other words, the median guy has a higher total tax rate than the guy who
    spend $500,000 and has $6.5 million increase left over to leave to his kids if he should
    get hit by a bus. The median guy? If he gets hit by a bus he might leave his kids a paid
    off $300,000 house if had life insurance, 2 used cars, and enough cash for a cheap
    funeral.

    The bottom line is money to buy power, not money to buy consumer goods. That is why nothing changes when we have a national election. The same people own all the parties. I was in the John Birch Society back when it was a semi-secrete organization. I quite after it became apparent that nothing was going to change. In 50 years nothing has changed but the names of the tax collectors. Remember "Contract With America?" The Republicans weren't supposed to win both houses but they did. They never introduced legislation on half the items.
     
  12. targus

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    You're all over the place.

    What is the topic of this thread that you started?
     
  13. billwald

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    The topic: the concept of "middle class" is a fiction invented by our owners to incite class warfare between working people with low paying jobs and working people with high paying jobs.
     
  14. targus

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    You seem to be overlooking the concept of furthering one's education and working hard to move from a low paying job to a higher paying job.

    The class warfare that you speak of comes from envy (which is a sin) and politicans exploiting that eny to further their own desires.
     
  15. billwald

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    This year college grads have a higher unemployment rate than those who never finished HS.

    The benefit of middle class is that instead of living in subsidized housing a person can get married, put his wife to work and with two incomes they can pay for a mortgage?
     
  16. targus

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    It must really be hard to be you with that black cloud you choose to take with you everywhere.
     
  17. billwald

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    Personally, I'm in "fat city" but I hate to see the country trashed for the grandkids.
     
  18. targus

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    I'm with you there.

    As I see it though the secret to success will still be the same - personal responsibility.

    One of my sons worked through college - graduated at the head of his class with a degree in engineering. He went right to work for GM at a fantastic salary, company car, five weeks vacation, etc. Six months later (last April) he was released from GM and his department was eliminated.

    There are not a lot of current openings for automotive engineers in the Detroit area. He is married and has a house. Houses are not selling all that quickly in the Detroit area either.

    Rather than complaining he went to work clerking for a judge - without pay - and enrolled in a class to prepare for the LSAT. His plan is to become a patent attorney. He did very well on the LSAT and is in the process of applying for law school. As a result of networking he also has three upcoming interviews with law firms that are considering offering him employment while he goes to law school at night.

    The point is not to brag but to offer a real life example of taking responsibility for one's own life rather than complaining about how hard things are.
     
  19. christianyouth

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    Billwald, so you pointed out a basic fact, and thanks for doing that, but what do we do now? I mean, what is the point of you pointing out these hard economic times? Do you have a solution for the problem? Are you promoting a certain type of political reform, do you want the Unions to demand their way to a middle class?

    I'm just wondering what is your reason for making the point that the middle class has disappeared.
     
  20. rbell

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    I've already given you an example (and I could give many others) of an obvious exception to this. Why do you ignore data and factual evidence?
     

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