Where is My Money?
And what is all this stuff in my house?
With the economy in shambles and the fall TV season lineup not looking much better, I’ve started to ask myself, “Where has all my money gone?” The various Occupy protestors around the nation wave a shameful finger at corporate CEOs and other one-percentish types, insisting that their high incomes mean more poverty for the common man. But is that true? Is the average person poorer now than in the past?
To find out the truth, I went to a source of honesty and upstanding values: the US government. Well, it might have issues, but it does produce a mountain of statistics, and the US Census Bureau is no exception. Here’s what I found. Between 1967 and 2010, the average (mean) household income in the United States rose from $45,599 to $67,530, all in 2010 inflation-adjusted dollars[1]. That’s a 48 percent increase in raw financial largess.
That number isn’t simply being pulled up by the super-rich. The median income over the same time period rose from $40,770 to $49,445. That means that if you lined up all of the households in America, being careful not to let any fall into the oceans at the ends, the house right in the middle of the line had 21 percent more buying power. That’s not true just for that Median Joe family, but all the families nearby. Plus, those households have fewer people in them now (from 3.26 persons[2] down to 2.58 persons[3] per household), giving each man, woman, and child in the country an even more substantial increase in the last 43 years.
These numbers are all statistics, and there will always be anecdotal instances of specific households falling through the societal safety net. And there are blocks of households that sway the results slightly; the large Baby Boomer demographic tends to have more money than the smaller yet vocal twentysomething class. But by and large, the majority of households in America are richer than they were in the Johnson era. So why doesn’t it feel that way to so many, especially to those who make noise about being in the 99 Percent?
It’s the iPhone’s fault. Memory is short, especially for the younger generation that doesn’t remember what the typical American life was like before Google. Back in the day, families spent less money. They went out to eat less, bought ordinary 10-speeds for their kids instead of flashy fixie bikes, and communicated by licking a 13-cent postage stamp instead of paying $150 or more per month for a family voice and data plan. Life didn’t cost as much back then, not because CEOs weren’t sucking our wallets dry, but because the typical lifestyle involved lower-cost essentials.
With healthcare costs and mortgages skyrocketing, it is certainly true that families spend more on the necessities of life. But with designer stainless steel appliances in the kitchen and a Cheesecake Factory on every corner and a 3G-connected Android device always at the ready, what constitutes a “necessity” has changed. Yes, the CEOs are richer than ever before, but that’s only because we are, too.
[1] US Census Bureau, Income, Poverty, and Health Insurance Coverage in the United States: 2010, released September 2011, http://www.census.gov/prod/2011pubs/p60-239.pdf
[2] US Census Bureau, Statistical Abstract of the United States, Table HS-12, “Households by Type and Size 1900 to 2002,” http://www.census.gov/statab/hist/HS-12.pdf
[3] US Census Bureau, May 26, 2011 press release, http://www.census.gov/newsroom/releases/archives/2010_census/cb11-cn144.html
[Image credits: Microsoft Office clip art]
Categories: Commentary, Politics. Tags: Census Bureau, CEOs, income, money. This post has 2 comments.
Hello Tim,
Can you measure quality of life?
You might want to do some research on statistics and probability. Statistics, as used by most media is just propaganda. Any competent gambler will tell you that you can’t apply the same numbers to every card in a deck if you are continually drawing from it. Statistics drawn from even twenty years ago cannot be reliably applied to current statistics. Why? Because the population is not the same population as it was a generation ago. Conditions are not the same. Population density is not the same. What the government publishes is magical smoke and mirrors. As a citizen, you cannot verify the numbers by doing an actual count. Another thing that is not the same – which some of us elder geeks recognize – is that the quality of merchandise is not the same. The quality of food in grocery stores is not the same. The quality of the communications media is not the same. But some things we have at hand have improved significantly: one to one communication, the ability of the individual to publish worldwide with a few flicks of his fingers; the ability of the individual to maintain communication with a loved one at almost any time, or to schedule or block untimely or unwanted communication. Forty years ago there was no 911, no voice mail, no caller ID, no texting.
So are we richer in quality of life? Now, households must employ two persons outside of the home in order to maintain this household income, whereas before 1967 this was not so important. Does that mean you need to cut your statistics in half?
One more thing: the government (any government) is not your friend. Government is a selfish, self-promoting organism that needs strict observation, just like any corporate entity.
Our best hope is to protect freedom of the press and our right (for anyone) to publish without censorship. (Defeat SOPA.)
Your point about there being more income earners per household is a good one; I’ll try to find the statistics on that. But that doesn’t change the fact that those households are not only richer (thanks, in part, to an additional income), they are also seeking out more luxurious consumption. Best Buy sells TVs of all sizes, from traditionally large TVs in the 20 to 30 inch range, up to the new giant flat-screen 60+ inch versions. So many people who probably shouldn’t be spending that much are opting for the larger displays. People see the larger screen size as a modern necessity, even though it’s not. The same is true of cars. Luxury models decades ago were the private reserve of those who could afford luxury. Now higher-priced-but-not-tremendously-luxurious cars like Lexus and Infiniti are all around, even in the middle classes. An affordable Ford or Honda gets you from point A to point B just as well, but many families would rather dip into their home equity for that little bit of luxury.