Wyoming’s Teton County, home to Jackson Hole, has the nation’s highest per-capita income from assets, according to a study by the Economic Innovation Group. The analysis found a sharp increase in geographic concentration of asset ownership over the past decades…
It’s soared in places like New York City and the San Francisco Bay Area. Meanwhile, across Appalachia, the Deep South and much of the Midwest, it stagnated, representing a negligible source of income…
Nationwide, the county with the lowest asset income per capita is in South Dakota, home to the Pine Ridge Indian Reservation. At $2,800 per person, it’s one-third of the national average. Among the largest U.S. counties, the ones with the five lowest incomes from assets per capita are all mostly Hispanic or Black.
Only a minority of Americans holds assets beyond homes, cars and retirement savings. About 15% of households own stocks and 13% hold business equity or other residential property, according to Fed data.
First, the emphasis here on asset income is helpful compared to the more common analysis of incomes. While income may be related to assets, assets gets more at wealth or how income is converted into more long-lasting economic resources.
Second, that assets are concentrated in particular locations is not surprising but with the relatively limited number of Americans who have certain assets, this concentration is even more notable. The truly wealthy Americans have assets and utilize them in certain places, like New York City, San Francisco/Silicon Valley, and Jackson Hole, Wyoming.
With this said, how much does increasing incomes reduce the gap in wealth and assets? Or, how might efforts at local and national levels affect this gap both locally and nationally? The most exclusive locations are going to be difficult for many Americans to afford at any point, regardless of their income. While much sociological research has studied the concentration of poverty, wealth also concentrates with positive feedback loops for those who can participate.
Researchers found that when wives are the bigger breadwinners, husbands report making an average of 2.9 percent more than what’s in their tax filings. Meanwhile, women who make more than their husbands report earning 1.5 percent less than their actual income…
So why does this phenomenon happen? Researchers say they suspect societal expectations about the roles each person plays in a marriage could be a main factor.
“When married couples . . . violate the norm that husbands outearn their wives, the survey respondents reporting the couples’ earnings appear to minimize the violation by inflating the earnings of the lower-earning husbands and deflating the earnings of the higher-earning wives,” researchers wrote in their findings.
If the misreporting is due to gender norms, might we expect this to go away as more women earn more money? Already, “In about one out of four couples surveyed, wives made more money than their husbands.” Give this a few decades and this misreporting might disappear.
On the other hand, social norms can be last a long time even after society has changed quite a bit from when the social norm arose. If the misreporting continues or even increases, it would be interesting to see how the Census and other surveyors adjust their figures.
“When you look nationwide at the share of households that had roommates or lived with parents, it did start to increase in the years just before the housing bust,” said Aaron Terrazas, senior economist with Zillow. “But it really took off during the financial crisis” that began in 2007, often referred to as the Great Recession.
Since 2005, the doubling up has increased at the same rate among employed and unemployed adults, regardless of age, Zillow found. The share of 20-somethings living in doubled-up households climbed faster than any other age bracket, but people in their 50s came in second.
The median individual income of an employed adult in a doubled-up household is $30,000, compared with the $45,000 earned by those living alone.
“I think there are both demographic and economic forces driving this doubling up — living with parents or living with roommates,” Terrazas said. “In the near term, I don’t see those forces turning around.”
I suspect more Americans would want to live alone – for reasons that sociologist Eric Klinenberg describes in Going Solo– but resources can hold them back. I wonder if the same trend is present on college campuses: those students with more resources live in solo rooms or can live in nicer settings off campus while others may not be able to access those residences.
More broadly, this gets at what Americans think about privacy and intimacy, personal space, and what home should be like. Are roommates really only an option until you find something better (a family or relationship of your own choosing, living by yourself because you can afford it)? Does this help explain why Americans have such big dwellings compared to much of the world (they need space to get away from others who live in the same residence)?
A millionaire is a person with a net worth of $1 million or more. Net worth is the value of everything a person owns, minus all debts…
Such an individual could have a negative net worth, yet they drive a Range Rover and live in a McMansion. Meanwhile, the millionaire next door lives in a three-bedroom house and drives a Hyundai…
Although it’s a common misconception that millionaires spend their money on luxury vacations, clothing, houses, and cars, what I’ve learned in growing my own net worth — and speaking with other millionaires — is that after a certain point, money stops mattering as much as it once did.
This seems to line up with the accepted wisdom that many American millionaires are relatively frugal and made their way to that wealth through saving and hard work.
But, if millionaires are not buying all those McMansions, who is? The flip argument expressed above that there are plenty of people living a millionaire lifestyle or above their means does not apply in all cases either.
Part of the trick here might be disconnecting income from wealth. Having $1 million plus in wealth does not necessarily mean you have the kind of assets to put down a sizable down payment or make sizable payments on a large house. (Think of the people who have paid off their mortgages and have a lot in retirement and savings accounts – this is not always easy to access.) Some people might be willing to buy homes based on whether they can afford the monthly payments – does it roughly fall within 30-35% of my monthly take-home pay – while others would be unwilling to splurge on a McMansion.
To be honest, I have not seen a convincing article or set of data regarding McMansion owners. I would guess a good number are in the top 20% of earners in the United States but probably a good portion are also living paycheck to paycheck.
Instead, analysts said, the decline in both marriage and partnerships is likely a result of the declining ability of men to earn a salary large enough to sustain a family.
“All signs point to the growing fragility of the male wage earner,” said Cheryl Russell, a demographer and editorial director at the New Strategist Press. “The demographic segments most likely to be living without a partner are the ones in which men are struggling the most — young adults, the less educated, Hispanics, and blacks.”
Russell pointed to data that shows marriage rates increase for younger Americans in connection with salaries. Fewer than half of men between the ages of 30 and 34 who earn less than $40,000 a year are married. More than half of those who make more than $40,000 a year are married, including two-thirds of those who make between $75,000 and $100,000 a year…
The Pew data underscores the economic marriage gap: Adults who do not live with partners are more than twice as likely to live in poverty than those who have partners.
“Our surveys show us that one of the things that’s holding unmarried adults back from getting married is that they feel they’re not financially stable enough,” Parker said.
While there are likely additional reasons for this (one example: the development of the idea that marriage is about two economically stable people coming together), marriage in American is increasingly tied to social class.
Regionally, economic growth was uneven.
The median household income in the Midwest grew just 0.9 percent from last year, which is not a statistically significant amount. In the South, by contrast, the median income grew 3.9 percent; in the West, it grew 3.3 percent. “The Midwest is the place where we should have the greatest worry in part because we didn’t see any significant growth,” said Mary Coleman, the senior vice president of Economic Mobility Pathways, a national nonprofit that tries to move people out of poverty. Median household income was also stagnant in rural areas, growing 13 percent, to $45,830. In contrast, it jumped significantly inside cities, by 5.4 percent, to $54,834, showing that cities are continuing to pull away from the rest of the country in terms of economic success…
African Americans and Hispanics experienced significant gains in income, but still trail far behind whites and Asians.
All ethnic groups saw incomes rise between 2015 and 2016, the second such annual increase in a row. The median income of black families jumped 5.7 percent between 2015 and 2016, to $39,490. Hispanic residents also saw a growth incomes, by 4.3 percent, to $47,675. Asians had the highest median household income in 2016, at $81,431. Whites saw a less significant increase than African Americans and Hispanics, of 1.6 percent, but their earning are still far higher, at $61,858.
The poverty rate for black residents also decreased last year, falling to 22 percent, from 24.1 percent the previous year. The poverty rate of Hispanics decreased to 19.4 percent, from 21.4 percent in 2015. In comparison, 8.8 of whites, or 17.3 million people, were in poverty in 2016, which was not a statistically significant change from the previous year, and 10.1 percent of Asians, or 1.9 million people were in poverty, which was also similar to 2015…
Income inequality isn’t disappearing anytime soon.
Despite the improvements in poverty and income across ethnic groups, the American economy is still characterized by significant income inequality; while the poor are finally finding more stable footing following the recession, the rich have been doing well for quite some time now. The average household income of the the top 20 percent of Americans grew $13,749 from a decade ago, while the average household income of the bottom 20 percent of Americans fell $571 over the same time period. The top 20 percent of earners made 51.5 percent of all income in the U.S. last year, while the bottom 20 percent made just 3.5 percent. Around 13 percent of households made more than $150,000 last year; a decade ago, by comparison, 8.5 percent did. While that’s something to cheer, without a solid middle class, it’s not indicative of an economy that is healthy and stable more broadly.
Both of these figures – the poverty rate and median household incomes – are important indicators of American social and economic life. Thus, that both are trending in the right direction is good.
Yet, we also have the impulse these days to (1) dig deeper into the data and (2) also highlight how these trends may not last, particularly in the era of Trump. The trends noted above (and there are others also discussed in the article) can be viewed as troubling as the gains made by some either were not shared by others or do not erase large gaps between groups. Our understandings of these income and poverty figures can change over time as measurements change and perceptions of what is important changes. For example, the median household income going up could suggest that more Americans have more income or we may now care less about absolute incomes and pay more attention to relative incomes (and particularly the gap between those at the top and bottom).
In other words, interpreting data is influenced by a variety of social forces. Numbers do not interpret themselves and our lenses consistently change. Two reasonable people could disagree on whether the latest data is good for America or suggests there are enduring issues that still need to be addressed.
Yet, a tiny number of places exist where black household income is greater than that of whites. Of the 364 large U.S. counties whose populations are at least 5 percent black, there are seven, according to a Stateline analysis of U.S. Census Bureau American Community Survey data for 2010-14…
The greatest similarities may be their proximity to core urban areas and high-paying corporate or government jobs, as well as their supply of affordable, albeit expensive, homes and good schools.
Valerie Wilson of EPI said affluent black families may have had to move farther from cities to find the good housing and schools they seek because the black middle class, with less net worth, cannot afford rising housing prices in the cities or private schools.
The article stresses that there are no lessons to be learned here even as there might be some patterns. The seven places do raise a number of interesting questions worth exploring:
The emphasis here is on the movement of black households to these counties. At the same time, what traits do the white residents of these counties have (that they are not living in areas with more inequality)?
Did the counties or local governments do anything to help promote these trends? I’m guessing these are largely the result of the “free market.” Yet, just because it happened in seven counties suggests this is a pretty rare outcome of the this free market.
What are the levels of residential segregation in these counties? Simply suggesting that blacks and whites have similar incomes doesn’t necessarily mean that the two groups regularly interact.
That this kind of equality can only be found in suburban areas likely would not please many suburban critics. However, many large cities and closer suburbs have a range of issues – from concentrated poverty to a lack of affordable housing – that can limit the opportunities for non-whites to succeed.
These places would be worth watching in the coming years.
The incomes of typical Americans rose in 2015 by 5.2 percent, the first significant boost to middle-class pay since the end of the Great Recession and the fastest increase ever recorded by the federal government, the Census Bureau reported Tuesday.
In addition, the poverty rate fell by 1.2 percentage points, the steepest decline since 1968. There were 43.1 million Americans in poverty on the year, 3.5 million fewer than in 2014…
The 5.2 percent increase was the largest, in percentage terms, ever recorded by the bureau since it began tracking median income statistics in the 1960s. Bureau officials said it was not statistically distinguishable from five other previous increases in the data, most recently the 3.7 percent jump from 1997 to 1998.
Rising incomes are generally good. But, note the catch in the third paragraph cited above: officials cannot say that the 5.2% increase is definitively higher than several previous increases. Why not? The 5.2% figure is based on a sample that has a margin of error of at least 1.5% either way. The data comes from these Census instruments:
The Current Population Survey Annual Social and Economic Supplement was conducted nationwide and collected information about income and health insurance coverage during the 2015 calendar year. The Current Population Survey, sponsored jointly by the U.S. Census Bureau and U.S. Bureau of Labor Statistics, is conducted every month and is the primary source of labor force statistics for the U.S. population; it is used to calculate the monthly unemployment rate estimates. Supplements are added in most months; the Annual Social and Economic Supplement questionnaire is designed to give annual, national estimates of income, poverty and health insurance numbers and rates.
According to the report (page 6), the margin of error for the percent change in income from 2014 to 2015 is 1.6%. Incomes may have risen even more than 5.2%! Or, they may have risen at lower rates. See the methodological document regarding the survey instruments here.
The Census has in recent years moved to more frequent reports on key demographic measures. This produces data more frequently. One of the trade-offs, however, is that these estimates are not as accurate as the dicennial census which requires a lot more resources to conduct and is more thorough.
A final note: it is good that the margin of error is hinted at in the article on rising middle-class incomes. On the other hand, it is mentioned in paragraph 12 and the headline clearly suggests that this was a record year. Statistically speaking, this may or may not be the case.
The number of U.S. residents who are struggling to survive on just $2 a day has more than doubled since 1996, placing 1.5 million households and 3 million children in this desperate economic situation. That’s according to “$2.00 a Day: Living on Almost Nothing in America,” a book from publisher Houghton Mifflin Harcourt that will be released on Sept. 1…
“Most of us would say we would have trouble understanding how families in the county as rich as ours could live on so little,” said author Kathryn Edin, who spoke on a conference call to discuss the book, which she wrote with Luke Shaefer. Edin is the Bloomberg Distinguished Professor of Sociology at Johns Hopkins University. “These families, contrary to what many would expect, are workers, and their slide into poverty is a failure of the labor market and our safety net, as well as their own personal circumstances.”…
“Time and time again, we would constantly see people’s hours cut from week to week,” said Shaefer, associate professor of social work at University of Michigan. “Someone might have 30 hours one week, down to 15 the next and down to 5 after that. We saw people who would remain employed but were down to zero hours. This was incredibly common in this population.”…
Many of the families Edin and Shaefer interviewed saw themselves as workers, the researchers noted. Rather than the negative stereotype of the “welfare queen” created by President Ronald Reagan, the families that are suffering with less than $2 a day want to work and are using self-reliance to get by. That hasn’t stopped the stereotype from proliferating, even though Edin and Shaefer note that extreme poverty in America is an equal-opportunity affliction: It hurts single parents, married couples, white, blacks and Hispanics, as well as rural and urban families.
While this is a small percent of the American population (less than 2% based on the figures cited in this story), Edin is likely right: few Americans could imagine this level of poverty that they would tend to associate with developing countries. And these are often people willing to work but job opportunities are limited.
It will be interesting to see reactions to this. Because of the relatively small numbers as well as the relative powerlessness of poor groups, this could be easy to sweep under the rug. Yet, I would guess many Americans would want something to be done for the poorest members of society even if they vehemently disagree on the means by which to do this. (This article suggests not much is being done in any sector, from government to charities.) I hope I’m not overestimating the compassion of the American people…
The top communities on Money‘s Best Places to Live 2015 are not the wealthiest suburbs but they are fairly wealthy compared to national incomes. Only 7 have median household incomes less than $70,000 (the lowest is $57k) and 17 have median household incomes over $100,000. The median household income for the entire United States? $53,046 (data from 2009-2013).
Money’s methodology contributed to having communities with these income levels. Among other factors that went into creating these rankings:
-“[excluded] places with a median family income less than 80% of the state average”
-“Eliminate places with a median family income of more than 210% of the state average or a median home price over $1 million. Rank the rest on factors including job growth, diversity, and ease of living, giving the most weight to economic opportunity, housing affordability, education, and safety.”
In other words, the methods ensured that these communities couldn’t be too poor or too wealthy. Yet, the above-average incomes in these communities are connected to all sorts of other factors: not just jobs but higher-paying jobs (likely white collar), the money available in the tax base, the education level of residents, the kinds of available housing, and so on.
Could the average American live in these communities? Perhaps there would be some cheaper housing (that is a factor in these rankings though it is primarily about cost and not about having apartments and smaller and/or older houses) and the median household income suggests half of residents in these communities are below the figures posted here. However, these rankings are geared toward people of higher social classes.