"CEO jobs are too few to effect the averages much even though they pay so high."
Disagree.
Disagreeing is totally nonsensical. Their are very few CEOs in the US. Esp. if you only include CEOs of at least mid sized companies (small company CEOs, tend to make a lot less money). CEOs with $100 mil dollar "golden parachutes" make headlines, but their are very few of them. There are three hundred million people in the US, compared to a few thousand large company CEOs and a much smaller number getting the type of salaries that make headlines.
Median would give a more accurate picture of what we are talking about.
That's a matter of opinion. But even if you take median. Median total compensation has also increased.
Sure they are two different things, but if home ownership is increasing then the middle class isn't getting priced out of it."
That is very simplistic reasoning.
Simply accuate. More and more people own houses. Thats the precise opposite of houses becoming only a dream that most people can't afford.
It takes two incomes now to buy a house in most cities when it took only one income a generation ago and you say the average American is doing better.
A generation ago, it took two in many cases, and now in many cases it does not. House prices have gone up compared to average incomes in a number of markets, but not in the whole country. Your simple statement about how one income was all that was needed then while two incomes are needed now isn't accurate.
"That's just flat out false."
You should look at the statistics before you let your gut reactions speak.
The statistics back me up. I wouldn't make a statement like that otherwise.
"But everyone is getting richer. In real dollars, every quintile has posted significant annual increases over the past 35 years, ranging from $3,000 for the lowest quintile to $13,000 for the middle quintile to over $25,000 for next-to-highest one. And the individuals in those quintiles change all the time, something even The New York Times, which wrings its hands on class matters like an obsessive-compulsive, admits. Urban Institute economists Daniel P. McMurrer and Isabel V. Sawhill estimate that between 25 percent to 40 percent of individuals switch quintiles in a given year and that "rates of mobility have not changed over time." Research tracking individuals in the lowest income quintile in 1968 found that 23 years later, 53 percent were in a higher quintile and that half had spent at least a year in the top income quintile.
More important, basic indicators of wealth and opportunity drive home the reality that the middle class' place at the table is pretty secure--maybe not the best seat in the house, but arguably better than ever. A historically high 70 percent of Americans own their homes (see table 956). And two-thirds of high school graduates go on to college (up from half in 1970) [see table 265]. That wouldn't be happening if the U.S. was fast turning into the Brazil of the North."
reason.com
Message 23536827
"...Second, the CBO data show that between 1979 and 2000, average after-tax income in each quintile (fifth) of the household income distribution rose. For the lowest quintile, it rose from $13,500 to $14,600 [all numbers in this sentence are in 2003 dollars]; for the second-lowest quintile, it rose from $27,300 to $30,900; for the middle quintile, it rose from $38,900 to $44,800; for the second-highest quintile, it rose from $50,900 to $63,600; and for the top quintile, it rose from $89,700 to $138,500. So for Krugman's claim (CBO reference aside) to hold true, average income in the bottom 90 percent would have had to have fallen drastically between 1973 and 1979, to more than offset the later increase. Reynolds uses U.S. Census data to show that no such thing happened."
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"How about the "vanishing middle class?" To say that the middle class is vanishing, one must have a definition of the middle class. A sensible person would probably define it as the group of people in the middle, say the middle quintile or the middle three quintiles. But that's not how the commentators who have made the claim have defined the middle class. Instead, they take the group of people making income within a fixed range in inflation-adjusted dollars, say, between $35,000 and $50,000, and show that the percent of the overall number of families within this range is falling. In commenting on this way of defining the middle, Reynolds points out an obvious but, nevertheless, often completely overlooked fact:
"Such a fixed definition ensures that the proportion of households in the middle group must decline with a rise in general prosperity, because rising prosperity causes a rising percentage of families to earn more than $50,000." (emphasis his)
Reynolds continues by telling of a 2004 story in the Washington Post titled, "The Vanishing Middle-Class Job." The Post article pointed out that in 1967, nearly a quarter (22.3 percent) of households made between $35,000 and $49,999 in inflation-adjusted terms, but that that share was down to 15 percent by 2003. Reynolds notes that the same article showed that the percentage of U.S. households with a real income higher than $50,000 rose from 24.9 percent in 1967 to 44.1 percent in 2003. Moreover, the percentage with income lower than $35,000 fell from 52.8 percent to 40.9 percent. In other words, the "middle class" was shrinking because people were moving out of the Post's statically defined middle class into a higher income class. Comments Reynolds: "The article could have been more aptly titled, 'The Vanishing Lower-Class Job.'" But because Reynolds shows elsewhere that higher-income households tend to have more than one worker, one can't simply equate households and jobs. Therefore, the article would have been even more aptly titled, "America's Families are Getting Wealthier." But that's not exactly the message or the tone the Post was shooting for."
Message 23119031
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The income share of the top quintile rose to 50.4% from 50.1% in 2001 while the bottom two quintiles lost 0.1% each and the third and fourth quintiles were unchanged (discrepancy due to rounding). And only the 0.1% change for the lowest quintile is statistically significant (i.e. non-zero) at conventional confidence levels.
Meanwhile, the Gini index has been bouncing up and down between .46 and .47 since 2000 after rising steadily throughout the Clinton years from .43 in 1992 (it was .42 in the mid-1980s).
In short, income equality took a big hit in the 1990s and has been essentially unchanged since Bush took office.
Oh, and the mean incomes of households in each quintile all rose in 2005, so any gains for the top quintile came at the expense of no one.
Message 22767344
Data from BEA.GOV
Message 22824787
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% change per quarter of real hourly compensation for non farm labor
cafehayek.typepad.com
Also see
Message 22759585 and all the links in that post. |
