Income and Poverty in the United States: 2019
census.gov
census.gov
I suspect a lot of those who have moved back into their parents’ homes were likely earning below the median household income. Remove them as a household, and suddenly the median family is one higher on the income scale.
https://www.pewresearch.org/fact-tank/2019/10/01/the-number-...
https://www2.census.gov/programs-surveys/demo/tables/familie...
The pew article also looks at statistics like "In 2019, 20% of households are shared households, up from 17% in 2007."
The weakness in the pew article is it's forecasting growth in household size from one year of its model, obviously we need to wait more time to see if it's model is correct.
But the 2010 "American Community Survey" says the average houshold size is 2.63 (https://data.census.gov/cedsci/table?q=b25010&tid=ACSDT1Y201...), so for this survey the trend is flat.
https://www.census.gov/library/publications/2019/demo/p60-26...
From which they conclude "In 2019, 20% of households are shared households, up from 17% in 2007."
https://www.pewresearch.org/fact-tank/2018/04/05/a-record-64...
from which they mention "By 2016, 20% of Americans lived in a multigenerational household, up from 12% in 1980"
One survey is one survey, multiple data points from a set of different perspectives is more comprehensive an analysis and less susceptible to single measurement methodology errors.
The main thing I take from this is that movement of a household income number is fairy meaningless unless you also know what household size number is measured or calculated with the income number.
We're looking at is households, and the easiest way to explain this jump is actually that the economy is more fucked than ever and more working age people are living together. If we consider the type articles you're referencing, that have been noting the migration of young, educated, working-age adults back to their parents homes in the USA-- we should very well expect to see a large spike in the reported median household income. The same growth would be true if more people were living in situations with roommates where ideally they wouldn't.
Here's the definition of a household from the linked article:
> A family household is a household maintained by a householder who is related to at least one other person in the house-hold by birth, marriage, or adoption and includes any unrelated individuals who may be residing there. A nonfamily household is a householder living alone (a one-person household) or sharing the home exclusively with nonrelatives.
Addendum: I'd like to note, that even if household size itself appears to be low; that's likely due to reproduction rates being on the decline as more people, on average, are having smaller families each year...
> the real median earnings of full-time, year-round workers increased 0.8 percent between 2018 and 2019
Seems like this is the wealth gap, coupled with an increase of the proportion of females working full-time in the workforce.
> The number of females who were full-time, year-round workers increased by about 1.2 million between 2018 and 2019, while the change for their male counterparts was not statistically significant.
Reminds me of Simpson's paradox.
From: https://turbotax.intuit.com/tax-tips/family/what-are-depende...
Yeah, in many ways a more interesting figure would be median adult income, but household (which has real comparability problems across time) is the popular number.
Men - +2.5%
Women - +7.8%
And is still not individual adult median income, and like median household income is a measure whose rise can indicate bad outcomes: where with median household income the factor that causes this is that it increases, cet. par., with more adults/household, with median individual workers it goes up if people who were previously working but at the low end of the distribution just lose their jobs.
As a simple case, consider a situation with 100% enployment and any non-uniform income distribution you want as the “before”, and the situation where everyone below the median in the “before” loses their job and has 0 income as the “after”, while everyone else remains employed with the same income as before.
What happened to individual worker median income?
What happened to individual median income?
https://www.epi.org/blog/household-income-gains-welcome-in-2...
> the data was collected between February and April of this year,
Collected here means tabulated. The data reflect changes in hhold income from 2018 to 2019.
> Overall, non-response increased significantly and was more strongly associated with income than in previous years, with non-response decreasing with income, meaning that income data could be skewed higher than it actually was.
I don't see how calculations would trend in a particular direction if they weren't literally collected in this calendar year.
It's still confusing as hell.
Also, is this addendum, by the census themselves:
> When correcting for non-response bias in 2019, the Census found that real median income was $66,790, 2.8% lower than reported in the official release.
This report uses the characteristics of the householder to describe the household. The householder is the person (or one of the people) in whose name the home is owned or rented and the person to whom the relationship of other household members is recorded. If a married couple owns the home jointly, either spouse may be listed as the householder. Since only one person in each household is designated as the householder, the number of householders is equal to the number of households. The count of households in this report excludes group quarters.
Further definitions are held here: https://www2.census.gov/programs-surveys/cps/techdocs/cpsmar...
(dont have time to parse through, but I suspect that there is only one head of household, and thus it means a child who is 18+ living with their parents, they are basically aren't even considered in the calculation)
These got my attention:
The 2019 poverty rate of 10.5 percent is the lowest rate observed since estimates were initially published in 1959
The 2019 real median incomes of White, Black, Asian, and Hispanic households all increased from their 2018 medians [between 5.7% (Blacks) and 10.6% (Asians)]
Percentage change in share of aggregate income was highest for the lowest income quintile (+1.8%). High income quintile saw decrease in share of aggregate income (-0.6%)
America is a lot more poor than these statistics let on when compared to the rest of the first world. Furthermore debt is not considered in many such analyses.
US wealth per adult is higher than Finland, Sweden, Denmark, Germany, and the Netherlands: https://en.wikipedia.org/wiki/List_of_countries_by_wealth_pe...
It's debatable if this is able to adequately capture all forms of non-cash transfers (like food stamps). To get around this, the World Bank uses consumption as a metric for well-being. By that metric, the poorest 20% consume more than the average person in most OECD countries[1][2], including Canada, the UK, Sweden, Australia, Japan, Denmark, New Zealand, and Iceland.
[1] https://www.nber.org/chapters/c12831.pdf
[2] https://fee.org/articles/the-poorest-20-of-americans-are-ric...
The maximum US social security pension is $49,680 USD.[2]
Obviously it scales based on income, but at least for US tech workers, you're likely to get close to the maximum amount since you'd be earning over $110,000 for a significant chunk of your career.
The US has a much higher maximum pension amount than Canada, where it's $1,176 CAD or $889 USD. You do get an old age benefit on top of $613 CAD, which bring it up to $1,351 USD or $16,212 USD per year.
[1]https://ec.europa.eu/social/main.jsp?catId=1123&intPageId=47...
[2]https://www.ssa.gov/policy/docs/progdesc/ssptw/2010-2011/ame...
It's complex, but if you have a high salary it looks like the basic pension is NOK 89 872, so another $9,889 USD, for a total of $42,105 USD?
What’s most relevant for this discussion is the system for people who are earning now for retirement in the future. The amounts are adjusted yearly, but the current maximum rate is about $14300. This is tax funded, and so doesn’t come out of your disposable income. Gaps from illness, unemployment, military service and caregiving are covered. When you start withdrawal, the accrued amount is adjusted for changes in the average national income and your life expectancy based on your age. I.e. the money is paid back to you at a rate that draws your balance to zero at the expected date of your death. If you live longer, it keeps going of course, funded by the people who die earlier. The maximum rate is therefore achieved by retiring at the oldest age (74), or roughly $97000/year with today’s numbers. This would require making well above the national average salary starting at age 13.
If you max out your income based pension described above, the base pension gets reduced substantially. Looks like it can go as low as $4300/year of benefits currently.
On top of these two pension types, your employer must save at least 2% of your income up to $134000, and pay for insurance that covers contributions if you become disabled. The employer must cover all associated costs. These plans vary a lot and have no maximum.
I will add that you need substantially less income in retirement in Norway since you won’t be paying for healthcare, and property taxes are extremely low.
That is demonstrably false.
The median at any snapshot in time is materially better off, but also much more stressed out than people in other wealthy countries about whether they might end up in a very bad economic situation, due to how there is barely any bottom. Subjectively, middle-income Americans don't feel well off and don't feel secure in even what they have. For example, numbers vary based on the specific survey, but about 60-70% of Americans consistently feel high levels of stress about money. I'm not sure that's a course that would've been taken by a 50th-percentile person trying to optimize their own well-being?
One reason Scandinavian countries tend to come near the top of those "happiest countries in the world" surveys (though I don't like the term "happy" for it) isn't from any particular joyfulness, but because the typical household subjectively has very low levels of economic fear or stress. Some of the survey questions that go into that score include things like, do you feel economically secure, do you worry about losing your housing, etc. A huge percentage of even middle-class Americans spend a lot of their time worrying about that (including my family), while the majority of middle-income people from say Denmark don't consider it a big risk to worry about.
The US has consciously made that trade-off. See how even Sanders doesn't propose to raise taxes on people making under $250,000, and Biden is up at $400,000. The top income tax rate in the Scandinavian countries kicks in at around $70,000.
It’s not dissimilar from that of Germany (0.935 vs 0.939), and it’s higher than that of most other OECD nations.
As for average life expectancy: the average is brought down by outliers. In general, the US has a higher homicide rate, a higher motor vehicle death rate, a higher obesity rate, and a higher opioid/drug death rate. These external factors all bring down the average life expectancy number more substantially than in other countries: https://randomcriticalanalysis.com/2017/05/16/the-explanator...
Even if you assume the lack of a safety net causes the symptoms above, my point is that the lack of a safety net is deliberate, because even our left wing party promises not to raise taxes enough to actually fund a more robust safety net.
Apart from that, the life expectancy of white Marylanders is 80 years, just a bit shorter than for Germans (80.9 years). But 30% of our state’s population is from a minority group that was enslaved on Maryland plantations, and then denied civil rights until very recently. If bill gates had been born in the county where I live as a Black kid, he would have gone to a segregated school until middle school. Their life expectancy is several years lower, due to the legacy of those injustices.
Many of the differences between the US and European countries are misdiagnosed as matters of general policy (safety net, healthcare). But when you break it down, much of the difference is actually the result of the country’s history and large Black-white gaps in many indicators. The median white household, for example, has 10 times the wealth of the median Black household—a fact that plays a huge role in people feeling economically insecure. But those gaps can not necessarily be fixed with the same policy choices that European countries apply to their general populations. That wealth gap, for example, has not changed since the 1960s, when Maryland schools were still segregated—despite a large growth in general social welfare spending since that time. It is a unique challenge that requires targeted solutions, and there is no political will to implement those policies. These policy challenges simply have no parallel in Germany.
I am not sure I fully comprehend the remark "The poverty line has not scaled with the increase in expenditures associated with modern living." It adjusts with inflation, and the inflation metric tries to stay relevant: the CPI basket includes housing, medical treatment and drugs, tuition, TVs, cell phones, etc. I guess the criticism comes down to the idea that somehow a cell phone should somehow adjust from an assumption of 0 from times before cell phones were popular?
If we do something like that, it sounds really hard to get things right (CPI is already pretty hard to get right). What would it mean to say that standard of living improvements are outpacing alleviation of poverty? That sort of metric seems something suited for sophisticated research, not a standard government metric.
Another important thing to do, one might note, that addresses some of the concern about losing track, is to take a fixed proportion of people - e.g. the bottom quintile of income earners - and study various aspects affecting their lives. This is, as I understand it, really widespread.
I know it has some areas that may be under-represented, but in general it tracks the same changes in the power of the dollar across multiple categories. Changing what the inflation metrics track would make it an even poorer standard for comparison/tracking.
What would make a better metric?
So the inflation rate doesn’t give you a good picture of the actual increase in the cost of living.
Source?
When you measure that, the poorest 20% of Americans have a superior level of welfare to the average person in most OECD countries.
You can see on table 6.5 in the study linked below that lowest quintile households (by income) consumed an average of $57,049 goods and services per household, which is just under $22k per person. Putting the lowest 20% of the US in the top half of OECD countries for that year.
The US spends more on its social welfare programs, as a share of GDP, than Canada does, and it matches what Australia and Switzerland are spending. The US is close to the OECD middle and a bit behind the UK (OECD figures below):
https://i.imgur.com/5GnDdTp.png
And when it comes to improvements in poverty thanks to our vastly expanded social safety net, you can see that very strikingly represented when you drop out those programs from the calculations (childhood poverty shown below, with and without government aid):
https://i.imgur.com/hqTS3Ck.png
https://i.imgur.com/9aEi2sL.png
The same thing shows up in our homelessness improvement figures from the past 20 years. The housing first program implemented by the Bush Administration and sustained by the Obama Administration - aka a government program - was almost solely responsible for the huge decrease in US homelessness.
The US social safety net has expanded rather massively in the past 40 years. Structurally the biggest problem the US has when it comes to its social safety net, is it's all haphazard and often poorly administered. The US isn't very good at running social safety nets, it's chaotic and critical parts of it are managed in very different ways state to state. We're not getting enough bang for our buck on that spending, we need to do better. We're spending a lot of money and the results are often not good enough (which we frequently see with government spending in the US). For example, if the US were spending per capita on our healthcare system what the UK is, we could nearly double - maybe up to 40%-45% - the number of people we're covering with free healthcare at minimal additional cost.
Typically, when someone is complaining about the lack of a social safety net in the US, they mean in terms of services received, rather than money spent.
As the above quote shows, you obviously know that because of various insane inefficiencies (often caused or abetted by perverse incentives at the interface between the public and private sectors) the point you're making of how much is spent in terms of % of GDP doesn't actually refute the complaints (about how little is being done for those in need) that you are objecting to.
So. We spend a heck of a lot, and we don't have a decent social safety net.
It's also worth noting that where social safety net programs are being poorly run by the government, this can sometimes be traced to politically motivated shenanigans and deliberate mismanagement.
Not sure why you’re getting downvoted.
US GDP is 21 trillion, social program spending is under a trillion.
Social expenditures are here: http://www.oecd.org/els/soc/OECD2016-Social-Expenditure-Upda...
As defined by the OECD, social program spending includes social security, Medicare, and education (each of which are $700-900 billion expenses).
Wage growth for the lower half had been consistently outpacing wage growth for the upper half since 2014.
And from the report, it seems like poverty had been decreasing for years.
Since 2014, the poverty rate has fallen 4.3 percentage points, from 14.8 percent to 10.5 percent
For example - I'm pretty sure large numbers of people living together and sharing rent is way more common nowadays than it used to be. From 18 - 25 (I'm 27 now) I was always living in a house with at least 3 other people (usually 4-5), because that was literally the only way I could afford to pay rent if I wanted to eat as well and I'm still splitting rent 50/50 with one other person now.
Most of us were working (low paid) full time jobs, so our total household income would have been pretty big - but this situation is obviously not at all an improvement over what we had a few decades ago when one minimum wage full time income could afford their own house and a full belly.
https://www.census.gov/content/dam/Census/library/visualizat...
And household income is all income earned, including those down to 15 years old.[1]
Plus, the report breaks out individual income as well and the numbers are similar.
[1]https://www.census.gov/programs-surveys/cps/technical-docume...
I.e. if you have one high income earner, married to a low income earner, supporting one or two no income earners living together in a household, its inaccurate to split those out and consider or calculate those statistics as individuals. Most households historically live a lifestyle more akin to pooling and sharing income and resources.
But, as you rightfully point out, when I was calculating them, we also tended to use equivalised-household incomes (to take into account the different resources and structures used by the number of children vs adults living together). 'Course you also then have to worry about things like imputed rent and drawing on access to capital/resources that don't turn up in economic or monetary flows.
The short answer for why its used is probably like most economic statistics: its calculable and easily available and people think they understand it (even if they don't).
It probably is a dated stat but it's still useful.
Going down the more individualized path also has problems
Afford might be poor choice of word though
""" it is likely that the characteristics of people for whom a telephone number was found may be systematically different from the people for whom the Census Bureau was unable to obtain a telephone number. While the Census Bureau creates weights designed to adjust for nonresponse and to control weighted counts to independent population estimates by age, sex, race, and Hispanic origin, the magnitude of the increase in (and differential nature of) nonresponse related to the pandemic likely reduced their effectiveness. Using administrative data, Census Bureau researchers have documented that there are more (and larger) differences between respondents and nonrespondents in 2020 than in the prior three years. Of particular interest for the estimates in the ASEC reports are the differences in median income and educational attainment, indicating that respondents in 2020 had relatively higher income and were more educated than nonrespondents."""
1: https://www2.census.gov/programs-surveys/cps/techdocs/cpsmar...
https://www.census.gov/library/publications/2019/demo/p60-26...
https://www.census.gov/library/publications/2018/demo/p60-26...
https://www.census.gov/library/publications/2017/demo/p60-25...
Quite often, arguments about the likely second+ order effects are major arguments for or against tax and benefit policy changes; it's not all about first order effects in isolation.
[1] https://www.brookings.edu/blog/up-front/2018/10/04/if-real-w...
Occam must be spinning in his grave.
maybe some mumbo jumbo stat that has nothing to do with the real world says things are better. Or maybe they frankly are not better.
Pre-COVID, personal satisfaction in the US was at all time highs, so these numbers shouldn’t be all that surprising to anyone outside the HN bubble...
Anyway, it sounds like you’ve really made up your mind here, and no amount of data appears to be sufficient to reverse the dogma.
lol wow. 2% of difference. Am I really supposed to believe this nonsense you spew? What a meaningless statistic, all to support YOUR dogma.
See what I mean? You seem easily convinced, so stick around and I'll have your whole world upside down.
Perhaps that’s true in late 2020 amidst a once-in-generation pandemic and the inevitable economic fallout that’s gripped the entire world. But these pre-COVID US Census numbers mostly line up with the overwhelming pre-COVID sentiment. I don’t know why that’s so surprising/off-putting to you.
This is "personal satisfaction survey." Not a US satisfaction survey. Completely different things.
Your narrative games don't work on actual intellectuals. Sorry.
The personal satisfaction survey captures exactly what we're talking about: how Americans feel about their personal well-being, and that's primarily driven by their personal access to resources/goods/services — in other words, their economic well-being.
> Your narrative games don't work on actual intellectuals. Sorry.
Not going to touch this, but you might be overestimating the positive effect statements like this have on your argument's credibility.
[1] https://www.bea.gov/news/2020/state-annual-personal-income-2...
You’re talking about why the BEA data doesn’t line up with the US Census Bureau data for 2019. That’s probably because the BEA data is average growth while the US Census data shows the median income growth. For year 2019, we noticed that wage growth was largely driven by the lower quintiles: https://www.hiringlab.org/2019/03/05/february-jobs-report-pr...
This can largely explain the discrepancy. In other words, the assertion that “median would have increased even less” actually turned out to not be true, empirically.
[1] https://www.rand.org/pubs/working_papers/WRA516-1.html [2] https://www.fastcompany.com/90550015/we-were-shocked-rand-st...
https://pbs.twimg.com/media/EiCLL-_UYAIBJ_T?format=jpg&name=...
The middle class is disappearing ... into the upper class.
$100k equivalent income in the 1960s was enough to buy a family home almost anywhere, and now it’s not enough to buy a family home in most major metros.
It's also worth pointing out that the average square footage of a home has grown considerably in this time, and that even if you are comparing a similar sized home, it is unfair to compare a home 3 miles from city center in a city of 1 million people to the same in a city of 2 million people, after it has grown through the years.
The labor market was extremely tight though, which was pushing wages up at an accelerating rate. Most of the slack in the labor market was gone.
GDP growth had been grinding lower for multiple years, the very long economic expansion was probably increasingly due for a recession (which we have now gotten out of the way).
If a more natural recession had occurred circa 2020 or 2021 (without the pandemic), it likely would have been shallow, with the Fed always guns-ready to pump (since the great recession). The economy was strong in the sense that there wasn't anything major structurally wrong with it such that it was about to implode, however growth was not anything to write home about leading up to the pandemic.
Lowest quintile +1.8% Highest quintile -0.6%
So it would appear it didn't go to the highest income earners.
My only problem is that it comes along with rising inequality. We needed to have more billionaires and multimillionaires (and thus raise asset values and debt much higher) for the wage increases to happen. Which basically means that the wage increases don't lead to a better quality of life.
More incoming money, more outgoing money.
I'm not arguing for socialism. I'm arguing for proportionate slice of the pie for the work done. The share of the pie is heavily skewed towards owning wealth in the first place today and the only way to keep the vast majority employed seems to be making the rich richer.
What does the percent of the pie matter even if you slice is getting bigger at historic paces because the pie in general is bigger. Would you rather have a higher percentage of a smaller pie or a lower percentage of a smaller pie.
Equality isn't the goal, equal opportunity is and higher standard of living I'd guess and focusing on equity may not be helping.
If individual earnings gains are less than household income gains, it means people aren't necessarily making more money, it means they're working more total hours. I don't consider this a good thing for the richest country in the world. It's also interesting to note that women earnings increased almost a full percentage more than mens.
That’s a good thing, no?
It's deceiving nowadays because we're basically living the same lifestyle quality we were 25 years ago, except that either both parents are working like dogs, or the even sadder reality of couples foregoing/delaying kids because of their finances.
edit: moreover, the impact of COVID on census data collection isn't likely to be equal across income groups.
https://m.washingtontimes.com/news/2015/feb/10/donald-lambro...
We are in truly dangerous times, and I say this as a libertarian-leaning, conservative-friendly individual: Trump is an existential threat to our Republic.