50% of All Workers Made Less than $26,000 in 2010
theatlantic.com
theatlantic.com
My first thought was to think, Wow this really provides a strong counterargument to people who keep touting the fact that 47% of US citizens don't pay any income taxes (other than FICA). Also I was shocked to see that "The 1%" included essentially anyone making over $200K. [edit: i originally made a mistake and said $100K]
But in looking more closely, I can't tell if the numbers are based from individual W2s (meaning a single individual with two jobs might contribute two separate data points), on individual taxpayers, or individual tax filings (maybe a family).
I suspect it's one of the first two. And if that's the case, these numbers can't directly be applied to stats about poverty levels or the "99%" and the "1%" and the "47%" figures being slung around these days.
For instance, these numbers include part time workers, such as teenagers with after-school jobs. At minimum wage, working 4 hours a day for 6 days a week for 50 weeks, this person might earn ~$8K.
So it's likely that some part of that first 25% on the chart are part-time workers.
That's not to say that there aren't some families doing everything they can to make just $8K in a year, but rather that the percentages would sound different if we built the chart using only data from tax returns (not W2s) and stripped out everyone who was not attempting to work full time to support themselves or a family.
Can someone provide insight that would either debunk or validate my assumptions above?
ftp://ftp.bls.gov/pub/special.requests/lf/aat19.txt
About 3/4 of those who are part time are voluntarily part time (i.e., not because they can't find full time work).
ftp://ftp.bls.gov/pub/special.requests/lf/aat20.txt
It looks like it's anyone making over $200k not $100k if I'm reading it correctly.
The data does include part time workers, including students. There aren't that many teens and college students in the US (only about 10% of the population). It also includes some retired people working part time jobs.
I think the IRS and the US Census publishes similar data but uses total compensation. IIRC, the median moves up a bit (but still under $30k) while the top end skews upwards dramatically.
Further, this data does not include dividends, capital gains or interest. Should be fairly obvious which end of the curve gets the lion's share of that.
But it also doesn't include unreported income, public grants, welfare, food assistance programs, Medicare, Medicaid, retirement funds, pensions, Social Security, receipt of charity, etc.
It also fails to realize that some of those low-income workers are homemakers who only work a few hours a week to get out of the house, teenagers and young adults just working for spending money, and retired elderly who are looking to stay active and supplement their fixed income without working too hard.
I'm not against social assistance by any means, but trumpeting misinformation only serves to muddy the waters and harm productive discussion.
http://en.wikipedia.org/wiki/Nickel_and_Dimed
A small road trip in South Dakota, Mississippi, Alabama et al would also be insightful.
Once you are in bankruptcy it can become more difficult to get jobs because shady employers often check credit history during the application process. Why? For the fuck of it, as part of the background check. So then there is this black mark on it.
There is not even a single thing that is wrong and we just fix that and bam! we are back up. Minimum wage is low, no single payer health system, our graduates are not competitive enough, housing is still expensive in major cities, there is just a lot of people just barely keeping their heads above the water. Not sure what the fix is and not saying there is a direct casual relationship between any of the things above or others, but it is obvious that he situation quite bad.
The thing is, how much money you make? usually has more to do with how much money you are involved with than anything else. Now, sure, if you are highly skilled, you have a better chance of scoring the jobs involving more money, but that doesn't weigh any heavier than connections, certainly after you pass the bar of basic competence, from what I've seen. People working for top-end consulting companies, from what I've seen, are not on average much more skilled than people working at ISPs or smaller companies.
There is a 'shadow IT' industry where people do, essentially, our jobs for $10-$15/hr. Some of these people are quite good, (and often 'real IT' companies that pay real wages will snatch people out of this 'shadow IT' industry.) It's interesting to watch this happen; usually one person in the "shadow IT" industry will get a real job, and then the good people that one person knows? over the next few years they will get real jobs through this one person who got a job. I mean, you need a certain minimum level of skill to be considered, and beyond that, the better you are the more social bullshit people will overlook, but a lot of it really is 'who you know, not what you know.'
I know a bit about this, because I worked my way up through the 'shadow IT' industry into 'real IT' and now I run a company that is somewhere in between 'shadow IT' and 'real IT'
From what I've seen, the difference between working for peanuts in the 'shadow IT' industry and working for six figures in the 'real IT' industry, once you pass a certain minimum skill level, has more to do with who you know, and how confidently you can present at interviews than anything else. I can't tell you about several times where I was picked over people that I knew were vastly technically better than I was.
As for the real question you are asking, "what do we do with unskilled laborers?" well, there are two problems. first, there just isn't enough work to go around at minimum wage right now. Next, we live in a country where basic medical care is unaffordable on minimum wage.
I think both problems would be solved if we could find something higher-value for low-skilled people to do. I mean, sure, education maybe could help? but personally, I doubt it. I didn't go to school, and economically speaking, I am doing much better than people I know who did. I think most of the wage/education correlation you see has to do with the correlation between going to college and having well-off parents.
I mean, I've gotten a job through parental contacts (I mean, only one, but it was in the depth of the dot-com bust. I /really/ needed that job.) and almost all my other jobs through contacts that I earned myself; and yeah, I didn't go to college, but I had access to a computer, compilers, programming books, and training from a real live programmer and a real live sysadmin from the age of four on. I was privileged in the same way that most people who go to college are privileged.
And the solution is genetic engineering, an infant technology.
None of my talents matter if the electricity that powers the servers I need wasn't generated and the systems of delivery weren't maintained.
None of my talents matter if the roads and public transport I rely upon to get to work weren't maintained.
None of my talents matter if the hardware I work with wasn't assembled and quality checked.
Etc, etc.
Electricians and others who run wiring for new installations (I know several people who do this) all make pretty good money. The guys who work for utility companies fixing stuff after storms are unionized and make a comfortable living. Power companies themselves make money not only in the delivery of services but also in state-of-the-art energy trading.
I have direct experience supervising road crews. Most states have a mandated minimum pay for road workers; even the guys holding the stop signs are making $16-22 an hour, and that was in Ohio, where the cost of living is about half of the Bay area. Public transit workers are also almost always unionized. Government workers (I interned at the County Engineer office) make salaries on-par with other knowledge workers and have generous retirement.
The hardware is the major outlier here, but for the most part, the workers making your hardware are doing relatively well for themselves compared to their fellow citizens. And they are largely irrelevant when discussing income inequality in the US.
The reality is that useful skills bring in good money. The people providing for your quality of life are doing pretty well for themselves and will always be in work. Being unskilled and being unable to provide real value is a problem without an easy solution. I feel that people should be ensured a base quality of life, but that's not free. If people didn't aspire to more, no one would have anything at all.
But if someone is earning $26K a year, then this means that their labour isn't worth any more than twenty-six thousand dollars to anyone else. Money is, after all, a medium of exchange, and if your labour is only worth $26K this means you're contributing very little of any value to society... barely enough value to account for the baseline amount of wealth (food etc) which every one of us destroys each year just in order to stay alive.
People who only make $26K a year need to take a good hard look at themselves and say "How can I make the value of my labour higher, so that I'm contributing more than a minimal amount to society?" If they'd start thinking about the problem in the right way, they might be able to solve it.
This is trivially true.
>if your labour is only worth $26K this means you're contributing very little of any value to society
This is way, way wrong. This is a very pervasive error in reasoning. Just because someone is only willing to pay X amount for your labor, doesn't mean that labor is worth X amount to society. When there are a lot of people willing to perform said labor, that pushes down the monetary value of that labor. This is completely independent of its value to society.
If I knew some magic incantation that would cure cancer, this action would be invaluable to society. But if I taught 1 million people how to perform it, the cure for cancer's value to society does not decrease.
The problem is that people conflate value in the moral sense with monetary worth. Thus when someone's labor can only bring in 26K a year in the marketplace, somehow its seen as a moral failing on their part. It serves to transfer the burden of finding a place in society completely on the individual, instead of where it belongs; on society as a whole.
Capitalism is preferable because it can manage resources better than any central planning can (at least pre-strong AI), but since imbalance is inherent in capitalism its also imperative to provide opportunities to mitigate imbalances within the system, in the form of education, skill training, etc.
>This is way, way wrong. This is a very pervasive error in >reasoning. Just because someone is only willing to pay X >amount for your labor, doesn't mean that labor is worth X >amount to society. When there are a lot of people willing >to perform said labor, that pushes down the monetary value >of that labor. This is completely independent of its value >to society
bzzt, wrong - if you're paid less it means your skill is of less value to society - supply is just a part of the equation. No one wants a cat chef - the skill is worthless to society - even if you are the only one that can fillet a cat.
Your last paragraph is dead-on, though. Societal worth does not equate to moral worth - on a moral scale, all men are equal. On a societal scale, not so much.
Nope. The point is that someone is willing to pay for a skill does not equal what that skill is worth to society. I think my example explains the distinction well, you've said nothing to refute it. People love to refer to market value as if it correlates with actual worth. This is just wrong. There are plenty of instances of things that have much value but the market cannot price them properly.
By your logic, all volunteer work is worthless. Likewise, a mother raising their child to become a good citizen has no value if they are not paid for it.
To put this into better perspective, consider the hypothetical that parents didn't toilet train their children. What would the cost to business be if they couldn't externalize this training to society?
http://www.theatlantic.com/business/archive/2011/10/the-1-ai...
To say that's making the rich "poor" is, frankly, offensive to people who actually are poor.
It's great to say we should enact policy that makes everyone richer. But it's basically saying something everyone can be in favor of because it has no concrete meaning.
Taxing the rich more so that everyone else can get better education and healthcare will make "everyone richer" in that it should raise per-capita GDP, but I don't think that's what you mean.
According to the Census, the median income for people with a Master's Degree is $54K (for ages 25-64), while those with only a High School diploma get $22K.
We need to improve our education situation 15 years ago, IMHO.
Edit: I'm going to edit this because people seem to think I'm suggesting a causal relationship here. I'm not. People with Master's Degrees tend to be highly trained in their field. It's not particularly surprising they tend to earn more.
If you invest the time to make yourself less replaceable, you will earn more money.
Not saying that education is not lacking but rather that there is a already a predatory system set up to get this people deeper in dept without necessarily providing a better chance at getting job.
Obviously an increase in PhD programs in french-fry frying would raise incomes even further.
The point, if you want a job, is to be competitive in a cutting edge field.
I'll start worrying about what happens when everyone has a Master's Degree when 20% of the population has a Master's Degree.
At the end of the day that still looks like a collective pay cut. Some took a part-time pay cut, some took a paycut down to 0.
From what I hear from people working in retail (I am sure it is true for other places as well), employers are cutting everyone to part time hours so they don't have to pay benefits. So people find 2 part time jobs to make ends meet. They effectively work full time and more , but now they don't have health benefits. First trip to the hospital and it is all over, they can't get out of dept, ever.
http://www.selfsufficiencystandard.org/
It's bad out there. Most people live lives of quiet desperation.
15% of the country lives in poverty. (http://www.nytimes.com/2011/09/14/us/14census.html?pagewante...)
Imagine what it would look like if 1 in 6 people took to the streets. 50 million. That's a horde.
10 * 9 * 6 * 52 = $28,080 / year
No, I don't think 54 hours / week is too much to ask. I'm sure most people making over the 26k probably work more than that. Yes, I know this is Canada, but it's just an example.
Also, why do you think it's acceptable for people to only have one day a week away from work? Why is a nine hour workday acceptable? Are you taking into consideration that lower income workers are more likely to have to live further from work, and use public transportation to get to and from their place of employment (or to the grocery store, etc. but that's outside of my argument). So these people should have to work nine hours a day, plus any unpaid breaks they take. IIRC, my girlfriend is paid for breaks but not for lunch, so let's add a half an hour to this example to accommodate that. So we're at 9.5 hours per day, six days per week. Now, the worker has to walk to their bus stop - and to do it early so as not to possibly miss the bus - and maybe take a 15, or even 30, minute bus ride. They do that twice a day, to get to and from work. That's adding possibly an hour, or even more, to their day. So you're advocating that asking someone to spend nearly 11 hours a day, six days a week?
My first job out of college, doing some shitty COBOL programming, was 42.5 hours per week (40 working hours, plus an unpaid half hour a day for lunch). Because I was making enough cash to afford it, I lived within walking distance of work. It added maybe 15 minutes per day to walk to and from my job. I made between 38 and 43k for this, depending on when in my employment you asked me.
So why does it make so much sense for you to ask someone to spend an average of 66 hours a week of their time to make $28k, when I spent about 44 hours a week to make $43k?
I'm not even including the few weeks that I had to put in extra hours - no week ever really exceeding 60 hours from my recollection - at various crunch times, since I was paid out for that time, and the outlier in time was met by an outlier in pay. My hourly wage exceeded minimum wage by more than double, so including that would only skew the calculations further away from your argument.
Why did you include commute time in their payment, and exclude it in yours?
I'm not sure what you're doing, but even in my summer internship I spent a good 10-11 hours a day, excluding commute time working. I wasn't even paid hourly. Most of my friends working proper jobs, in finance and tech spend at least 10 hours a day working - usually more.
I didn't. I used myself as the example, explaining that because I could afford better accommodations, specifically an apartment close to work, that my travel time was minimized. My point there was that lower income workers can't afford to be as selective in where they live as can workers with a higher income, and that they are more reliant on cheaper, yet less time-efficient, modes of travel.
Having said that, I will admit that by using my situation as the example, I may have biased the analogy a bit. I overestimated the average travel time for lower income workers, and underestimated the average travel time for higher income workers. While I think it's important to note the variable of travel time, it was possibly unfair to include it in the summation.
I can't speak to your example, because I don't think I'd stay in a job where 50-55 hour weeks were the norm. Overtime is fine when it's used properly, but there's a reason they call it a "9-5" job. If you go beyond that, you'll get burned out and be less efficient.
Americans do seem to have a different view on working than do other countries, even compared to Canadians like me, so this could just be a cultural difference. I don't think it is though, even in the States.
I can't think of any of my friends or family - an admittedly small data set - who work more than a 40 hour week on average. In Canada, I believe there are legal protections, at least in some provinces, which prevent you from working too much without adequate compensation (e.g. time and a half for hours over 40, double time for holidays, etc.) I sometimes had to work more than 40 for "straight pay", but that was apparently due to loopholes for salaried and/or on-call employees.
Good employers insist you not work those kinds of hours to begin with, they know it does not increase productivity in the long run, in fact having the opposite effect, and leads to burnout and health problems.
At best, you are accomplishing nothing working those hours regularly. At worst, you are seriously harming your long-term health.
Edit: By the way, Statistics Canada provides some numbers you should look at:
Not even long-term health. This can affect you quicker than you might think.
During one particular crunch time, I was working long hours on a regular basis (crunch time here being "after the project had continued years after it's originally scheduled end date, we were given a hard deadline a few months in the future, so everything was a "crunch" until then). I wasn't sleeping right, and one morning I came in looking like hell. My boss - my nice boss, anyway - diverted us when we went for our morning coffee. He took me to the pharmacy instead, and bought me a bottle of Valerian pills. If that isn't a warning sign, I don't know what is.
Also, I ended up on a stress leave for a couple weeks after a while. Without the constant pressure of work, my body finally relaxed. When it did, I ended up getting strep throat and general body aches. It could be coincidence, but I tend to think that I worked myself so hard that I actually compromised my own immune system.
I don't have a problem working long hours over short periods of time when it's properly needed, but I won't ever let myself work a job where that's the norm for extended periods of time (or, god forbid, all the time) again.
- Minimum wage in Canada != minimum wage in the U.S.
- Economy in Canada != economy in U.S.
- Canada has free health care, blunting the impact of a low wage job without benefits (as opposed to the U.S. where a lack of health insurance can be devastating)
- Not everyone with a minimum wage job is able to work all the hours they would like to work.
And that is without touching on whether or not you think a 54 hour work week is a reasonable thing to ask someone, possibly with children, to be working at some unfulfilling minimum wage job.
Health care isn't free, it's just heavily subsidized. Depending on your province, you can expect to pay about $750 a year to cover your end of basic coverage. Vision, dental, and prescriptions aren't covered, and most people have supplementary coverage for them.
Of course, for low wage earners and students there are various programs in place that can drop the amount you pay to basically nil. There's no deductible for most things (doctors, er, surgery, etc) either, which is handy.
Are you referring to the amount of tax that goes toward support of the healthcare system, or out-of-pocket expenses?
If it's the latter, can you tell me which provinces those are so that I can avoid them? I lived in Ontario from birth until I was 21, and have lived in Nova Scotia since then. Outside of minor costs like the uninsured portions of my dental work and prescriptions (I know there's a word for this, but I don't know it off hand), I've never had to pay for my healthcare.
Supplemental coverage - as you said, vision, dental, and drugs - are typically provided by your employer. I don't really know how many people buy extra on top of that. Maybe when you have kids it becomes more important, but I'm not there yet.
I will definitely agree with your "health care isn't free" statement. It's surprising how many people seem to think it is free in Canada, but it's just a much less noticeable cost. It's rolled in with our taxes, so we just don't think about how much of our tax will go for healthcare. It's just tax. "Out of sight; out of mind" and all that.
That might as well be free.
I pay almost $7,000/year in California for good (by US standards) medical coverage. That includes some prescription coverage, but not vision or dental. I'm in a low-risk age group, I'll let you guess what my premiums would look like if I were, say, 50. :)
8 hours a day is the norm here. A lot of the minimum wage workers (lower than 10$ an hour) work even fewer than the 40 hours that would constitute full time as a way to reduce businesses supposed obligation to cover healthcare / 401k / etc. I've seen in my experience many workers get cut off between 35 and 38 hours in a week to avoid this.
I would anticipate that very few people, less than 5%, of people making over 26k in the US work more than 54 hours a week... It just isn't done that way here.
My father worked three jobs when I was growing up, to support our family. He never complained about wealth inequality; he just did what he had to. Sure, it'd be nice if everyone got paid a lot of money - but since that's never going to happen, people might need to adjust what the norm is.
52? 6 days a week? Not every job allows for it. You want to abolish week-ends? Come on.
The Federal Minimum Wage in the U.S. is $7.25.
I'm lucky when I can do a full 40, and I make a lot more than $26k. A LOT more.
Several of my friends, while great people, unfortunately have a close-to-minimum-wage skill set. I'm just saying that these people who are making so little could make more, if they put in more time.
2006 38,651.41
2007 40,405.48
2008 41,334.97
2009 40,711.61
2010 41,673.83Reminds me of the old saw about how when Bill Gates walks into a bar, everyone turns into a millionaire, on average.
That's the problem with averages.
Also, wages/employment are sticky because of the friction in changing them... companies will generally change comp slower than the change in sales (in both directions.)
For example, this is also true:
50% of all taxpayers make less than the median EVERY DAY
That should disturb you, especially in comparison to that stat decades ago.
It says they come from W-2 filings. But do they bother to match up different W-2 filings from the same person? i.e. if I work two part-time jobs, are those added up? Or even if I switch jobs part way through the year?
Of course it doesn't include income from non-work sources (investment income etc), though that shouldn't change the median that much since people in the lower half don't have all that much in passive income.
Of course it doesn't include tips either (or it can -- reporting of tips on W-2s is, as I understand it, complicated and whatever the law is, it isn't followed).
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_...
http://en.wikipedia.org/wiki/Median_household_income
Adjusting for PPP, your $16 USD is only about $11.40. Australia is considerably more expensive than the US.
http://au.ibtimes.com/news/234393/20111020/forex/australia-d...
Not sure why you think Australia is more expensive than the US. I visit the US every year and do not find this to be the case at all.
http://en.wikipedia.org/wiki/Dollar_sign
So, barring time travel, I suggest that your theory about a U superimposed on an S must be wrong (at least as a causal story).
I've got to learn to stop caring about the rampant America-centrism on H.N.