Message Font: Serif | Sans-Serif
No. of Recommendations: 11
The pie grows and all benefit.

The poor have lost ground in the past 30 year

This is absurdly wrong, actually an outright falsehood, as much proven by the obvious point that your silly PA diatribe is link and fact-free.

As I [and other educated people who read and understand economics] have noted previously, the key to measuring these kinds of stats is to use a longitudinal study of the US population. That means you are making an apples-to-apples comparison over time.

Otherwise, if 13mm immigrants come to the US as they have in the past years, starting mostly at the bottom, you've got a significantly lower-earning population added to the average/median, even if all existing workers got a nice raise.

Or if you take a simple average and the top 5% falls dramatically and bottom 95% goes up [as happened recently and noted by the NYTimes] you get bad and misleading data.

To wit--
Avg Annual % growth in Real Hourly Earnings from 1978-2004:

Total Population, [non-incarcerated] -
Ages 22 to 25: +6.5%
26-30: +4.0%
31-35: +3.6%
36-40: +2.5%

As you can see, the inflation-adjusted wage gains are quite positive for every category.

However, what if we simply look at college graduates...are they doing better or worse - isn't that the latest fear, that white-collar jobs are going away and paying worse and longer hours and etc?

Bachelor's Degree and Higher --
22-25: +11.6%
26-30: +6.4%
31-35: +4.7%
36-40: +3.0%

As you can see, the Real wage growth for college grads is 20-80% higher in every category, an advantage that lasts for decades.

But wait! The advantage is even higher than that. Why?

Because the BLS does NOT include workers who earn > $100/hr! They automatically exclude high-earning workers from this survey.

Every doctor, lawyer, consultant, money mgr I know charges/earns more than that. Starting lawyers bill $300 or so these days in big cities.

So when you make a fair apples-to-apples comparison of real wage growth, it is positive for all groups and all ages.
But you don't need to take my word for it. Check out for more details.

On top of that, median income needs to be measured on a Real, DPI, per capita basis.

You cannot compare quintiles per household because different quintiles have different numbers of people in them - the lowest quintile has the fewest number of people -- on average 1.95 people, the second lowest 2.5, then 2.95 and then 3 and so on.

The median number of workers in the two highest quintiles is TWO workers, according to the 2006 Survey of US Census Bureau. They start at $55k and $88k respectively, or $27k and $44k per median worker. Rich!!

The median number of workers in the middle and second lowest quintile is ONE worker. The second lowest quintile earns ~$18k per median worker.

The lowest quintile has a median # of workers of ZERO.
60% of them are single-person households, unlike the 90% of top quintile households that contain multiple people, 89% of whom are married families.

According to, per capita income has increased every year for the past 10 years, with an average of 5.2% for the past 4.

They even address the issue of low-wage immigration and its effect on income trends.
'The failure of net migration into Nevada and Arizona to decline sufficiently as employment prospects deteriorated is readily apparent in their relatively low per capita income growth rates. Because their populations are growing at nearly three times the national rate, their personal income must grow at least 2.0 percentage points faster than the national average just for their per capita incomes to keep pace with the rest of the country. Such strong personal income growth did not occur in 2007; employment gains in these states were small.'

UST Income Mobility Study:
"This study examines income mobility of individuals [96,000+] over the past decade (1996 through 2005) using information reported on individual income tax returns."

'• There was considerable income mobility of individuals in the U.S. economy during the 1996 through 2005 period with roughly half of taxpayers who began in the bottom quintile moving up to a higher income group within 10 years.

• About 55 percent of taxpayers moved to a different income quintile within 10 years.
• Among those with the very highest incomes in 1996 – the top 1/100 of 1 percent – only 25 percent remained in this group in 2005. Moreover, the median real income of these taxpayers declined over this period. [over 10 years!]
• The degree of mobility among income groups is unchanged from the prior decade (1987 through 1996).

• Economic growth resulted in rising incomes for most taxpayers over the period from 1996 to 2005. Median incomes of all taxpayers increased by 24 percent after adjusting for inflation.

The real incomes of two-thirds of all taxpayers increased over this period. In addition, the median incomes of those initially in the lower income groups increased more than the median incomes of those initially in the higher income groups.

The degree of mobility in the overall population and movement out of the bottom quintile in this study are similar to the findings of prior research on income mobility.'

In fact, only 44% and 47% moved up from lowest bracket in the 1967 and 1977 study versus 58% by one measure in the latest study.

Median income of the top 5% dropped by 7%.
The top 1% dropped by 26%.

The lowest bracket of income gained 91%!

* DPI is personal income less personal current taxes; Real DPI is DPI divided by the implicit price deflator for personal consumption expenditures. For the sources of the prices used for this deflator, see "Updated Summary of NIPA Methodologies", SURVEY 82 (October 2002): 34–35.
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.