Twenty years ago I was a very broke college student. One semester I was homeless, sleeping in university stairwells, my car, and friends' sofas. Today I have two new-bought cars (one given to my daughter in college), a colonial suburban house, and an income that is about 1,400% greater (not adjusted for inflation) than my early undergraduate years. Twenty years ago government statistics placed me in the bottom 20%; now they place me somewhere in the upper 30% or so in terms of income. But according to the study discussed in this commentary, incomes of "the lowest 20%" only increased in this time by about 20% (adjusted for inflation). Did my metioric rise help elevate that figure? No; the statistics for "the lowest 20%" only counted my income for the time that I belonged to that catagory. Once my income increased past the "lowest 20%" threshhold, I stopped contributing to the figures for that catagory.
So what do these figures truly mean? That -- adjusted for inflation -- people living in the USA's lower 20% income level today are doing better than when I resided in there.
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Those economics professors at George Mason U are something else. Here's another post that adresses how much better things are today than 20 years ago in the US:
http://cafehayek.typepad.com/hayek/2006/01/a_1975_sears_ca.html
I'm sure the income for your family wasn't in the lower 20% while you were a college student. Whether they contributed to your income or not, their support should be factored into this equation. You didn't start out as an impoverished child. Big difference.
I buy this part of the argument:
"It's comparing two snapshots over time and pretending that the people in the snapshots are the same people. The implication is that if you were a poor family in 1980, you barely got ahead while the rich families, turbo-charged ahead of everyone else and left them in the dust. The rich get richer and the poor basically stay poor.
But they're not the same people in the two snapshots. The comparison of the two snapshots is close to meaningless. The bottom quintile of families today includes a bunch of people who weren't there in 1980. Some of the families are recent immigrants to the United States seeking opportunity. Some of the families are young and just starting out. Some are the result of a divorce that has dumped one or both partners into poverty and it will take time for them to recover.
And most importantly, some of those rich families today that have allegedly zoomed ahead were poor in 1980 but have become rich in the meanwhile, an experience that is the exact opposite of what the headline would have you believe."
If the study of census data tracked the same families, then it could be construed as more accurate.
However, we do know from several studies that on average there has been growth in the income of the very rich while income for the lower rungs of society has remained flat or gone down.
============Nadir
I'm sure the income for your family wasn't in the lower 20% while you were a college student. Whether they contributed to your income or not, their support should be factored into this equation. You didn't start out as an impoverished child. Big difference.
=================
Unfortunately, Nadir, that's not how these statistics work. You might imagine that's how they work, or suggest that they ought to work that way, but they do not. When I was in college, my parents filled out their income tax returns, and I filled out mine.
And yes, there are certainly rich kids on that "lower 20%"! Indeed those statistics do include rich kids living in their parents home, driving a nice car that their parents purchaed for them, filling out an income tax return for $8,000. One of them is the 25 year-old female bum living in her mom's West Bloomfield mansion, driving her very nice car. Another is my own eldest daughter, living in an apartment paid for by her grannie, driving a new car that her idiot father bought. She worked a bit and filled out a tax form. (She didn't work as much as Tom, Sara, or I did when we were paying our own way through college, paying our own rent and providing ourselves with transportation, seizing difficult majors and making the honor roll every semester. No, not working *that* hard as waiters and cooks. But a little work-study here and there.
Yes, those people indeed show up in the "lower 20%" statistics. Indeed! Please remember that the next time you encounter these statistics, and then wonder why all those idiots keep moving to the US, and so few ever move away.
===Nadir
However, we do know from several studies that on average there has been growth in the income of the very rich while income for the lower rungs of society has remained flat or gone down.
===
Yes... from flawed data like this. This data proves that grocery store cashiers in 2006 make *only* 20% (adjusted for inflation) more than did grocery store cashiers 20 years ago. But what fraction of grocery store cashiers 20 years ago are still working in such jobs?
Actually, this is pretty impressive. My eldest daughter just took a job for about one month working as a... grocery store cashier! Apparently she had about 20% more spending power than I would have had taking the same job back when I was an undergrad. This is an amazing sign of progress. I wonder how many of her co-workers had 20 years of cashier experiance?
I remember one of the original black families in our neighborhood. Tom, remember the Tisdales? The mom was a grocery store cashier at a major chain, about 30 years ago. Remember? Remember that by the time we got to high school, she was the manager of the store's new outlet? Her income has grown quite a bit more than 20% in 20 years, but the college students running the cash registers for make 20% than she did 20 years ago. Not bad!
I wonder what the similar statistics are for Cuba...
Another way that these figures actually portray the USA favorably: Imagine that since 20 years ago grocery cashiering had become a very high-paying profession. Grocery cashiers instead of making $10k a year then, now make $40k. Result: they no longer count amoung the "lower 20%". Every nation at any time will have a "lower 20%". If, adjusted for inflation, the average income increases 1 point a year, that's a very good sign!
I am very curious to see how the average wage of Venezualan grocery cashiers will change over time with the reduction of free economics there. Since Chavez and his supporters believe that governments can set wages and prices, let's just have him turn the wage-dial for everybody there up to $50,000 US dollars. That would be a wonderful minumum wage. While he's at it, maybe Chavez can certify all Venezualans as excellent guitar players.
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