July 2018 Median Household Income in the U.S.(politicalcalculations.blogspot.com)
politicalcalculations.blogspot.com
July 2018 Median Household Income in the U.S.
https://politicalcalculations.blogspot.com/2018/08/july-2018-median-household-income.html
88 comments
I'm personally not a big fan of households as a unit of analysis, at least not in isolation of any context. As far as I'd understand it, they hide meaningful issues.
For example, if everyone had high personal income and an abundance of space, they'd likely live privately.
Whereas if you've got no income, you risk homelessness, you may live with someone you'd rather not. e.g. bad marriages, domestic violence etc is often tolerated due to a lack of financial power to move out.
As such you may find the median household income overstates wealth. It may be considerable simply because multiple people live there, who are too poor to live by themselves. In this sense, household income may hide poverty and overstates affluence. Particularly when you consider that there's a negative correlation between income and birth rates, you end up seeing large families (and possibly considerable household income) who are poor, in the data. But just reporting on household income doesn't do that justice.
Similarly, this creates an apples/oranges comparison with median/average household income.
The median household in the US today is 2 people. In the 1960s it was 3 people. (close to 4, even!) But it's different from the average household size, which has dropped too. As such, you may just be observing that the median household relative to the average household size has been dropping. That could have nothing to do with polarization, it may just mean there's a shift in living preferences. I'm not asserting anything here, just that there are alternative explanations for the observation you make, and that just looking at these averages without context, controlling for confounding variables or any theoretical basis may lead you to incorrect conclusions.
For example, if everyone had high personal income and an abundance of space, they'd likely live privately.
Whereas if you've got no income, you risk homelessness, you may live with someone you'd rather not. e.g. bad marriages, domestic violence etc is often tolerated due to a lack of financial power to move out.
As such you may find the median household income overstates wealth. It may be considerable simply because multiple people live there, who are too poor to live by themselves. In this sense, household income may hide poverty and overstates affluence. Particularly when you consider that there's a negative correlation between income and birth rates, you end up seeing large families (and possibly considerable household income) who are poor, in the data. But just reporting on household income doesn't do that justice.
Similarly, this creates an apples/oranges comparison with median/average household income.
The median household in the US today is 2 people. In the 1960s it was 3 people. (close to 4, even!) But it's different from the average household size, which has dropped too. As such, you may just be observing that the median household relative to the average household size has been dropping. That could have nothing to do with polarization, it may just mean there's a shift in living preferences. I'm not asserting anything here, just that there are alternative explanations for the observation you make, and that just looking at these averages without context, controlling for confounding variables or any theoretical basis may lead you to incorrect conclusions.
Enlightening, but terrible choice of axes ... I thought it was trending down to 0 at first!
Why would a value of 0 be helpful for this graph? If the ratio between median and mean of household incomes is anything close to zero it's hugely bad. It's like having absolute zero on the 5 day forecast.
Letting the y-axis start at 0 loses too much detail.
If you’re interested in the yearly swings, convert it to a annual % change graph (and start that at 0). What you really means is that using an honest scale makes the trend look less dramatic.
> If you’re interested in the yearly swings
Why would they be? They certainly didn't say they are.
> What you really means is that using an honest scale makes the trend look less dramatic.
I think "honest" is a loaded term here. It's a well known fact that income inequality has been growing in the US for decades now, and the trend is dramatic and undeniable. Are there ways to minimize it visually in a graph? Sure, you could blow out the axes, or you could do yearly deltas which wouldn't have the line moving past a few percent ever. Both of these suggestions would flatten this phenomena, and coincidentally both have been suggested here. But the phenomena itself is not flat, and therefore it is the flat representation that, by definition, would be misleading.
Why would they be? They certainly didn't say they are.
> What you really means is that using an honest scale makes the trend look less dramatic.
I think "honest" is a loaded term here. It's a well known fact that income inequality has been growing in the US for decades now, and the trend is dramatic and undeniable. Are there ways to minimize it visually in a graph? Sure, you could blow out the axes, or you could do yearly deltas which wouldn't have the line moving past a few percent ever. Both of these suggestions would flatten this phenomena, and coincidentally both have been suggested here. But the phenomena itself is not flat, and therefore it is the flat representation that, by definition, would be misleading.
I just googled the data[1], removed the duplicate entry for 2013 from the Excel spreadsheet when the methodology changed (shoddy on my part, I know) and made a graph from it that was readable in the five minutes before I posted my comment.
Feel free to post a better presentation of the data.
[1] https://www.census.gov/data/tables/2018/demo/income-poverty/...
Feel free to post a better presentation of the data.
[1] https://www.census.gov/data/tables/2018/demo/income-poverty/...
The parent post has a point.
Five minutes or not, it is ultimately deceptive. What really is a ~22% drop since 1970s looks like a 100% drop on first sight.
Five minutes or not, it is ultimately deceptive. What really is a ~22% drop since 1970s looks like a 100% drop on first sight.
By all means, make a better graph, so I can tell you what you really meant by your choice of presentation after the fact :p
For real.
> terrible choice of axis
> honest scale
> deceptive
Be kind ya'll.
> terrible choice of axis
> honest scale
> deceptive
Be kind ya'll.
I didn't know OP made the graph. If I had I would have been less upfront, e.g. "I would have chosen different axes".
Why not just use a 0-100% scale? It would make it clear how big a drop there has been. (Technically, you could get a ratio higher than 100% but it still seems like a reasonable upper bound in actuality.)
The ratio alone isn’t necessarily concerning. You could have a group getting wealthier, say 2nd quintile moving to 4th quintile (not super wealthy) and you’d see the % drop below 100%.
So rich guys are getting richer faster. Big news! They have access to instruments folks with median income dont.
You are missing the point that everyone s situation seems to be improving - the median income is a better metric to measure that.
You are missing the point that everyone s situation seems to be improving - the median income is a better metric to measure that.
> the median income is a better metric to measure that.
I disagree.
So you have a bit more than you had last year but as time goes on your percetage share in the overall wealth, prosperity and influence in your nation is decreasing.
Great deal.
I disagree.
So you have a bit more than you had last year but as time goes on your percetage share in the overall wealth, prosperity and influence in your nation is decreasing.
Great deal.
I consider socio-economic polarization an existential threat to democracy: Money buys political influence, so I would argue there's a legitimate fear of capitalist societies turning into oligarchies.
I agree with you about polarization being a threat. And I'm guessing you've had more time to think about this than I have.
Hypothetically: what're some solutions that a monied person could implement to stymie the runaway feedback loop? I know it may sound odd but is it possible to use money to stop the purchase of political power for both yourself and everyone else?
Hypothetically: what're some solutions that a monied person could implement to stymie the runaway feedback loop? I know it may sound odd but is it possible to use money to stop the purchase of political power for both yourself and everyone else?
Organized nonpartisan groups like Represent.us are working to remove money from politics, at least to the degree that it is possible. Campaign finance reform is a part of their strategy, as is broad anti-corruption legislation. Investing in groups like this would be a good way for someone with resources to apply them positively.
And I'm guessing you've had more time to think about this than I have.
Not necessarily - I just like to muse about big-picture problems with society from time to time. Contrasting median and mean income (a flawed measure for various reasons) was just the first idea I had when I was trying to sanity-check the common-sense idea that because it's easier to get money if you already have money, social polarization is likely to grow.
As far as the US is concerned, campaign finance reform often gets mentioned as the most immediate step to improve upon the current situation.
As to the big-picture problems, frankly, I'm not sure humanity as a species is enlightened enough to overcome self-interest and inertia to ever fix the systemic problems present in the current way we organize society. Hope for benevolent robot overlords, I guess ;)
Not necessarily - I just like to muse about big-picture problems with society from time to time. Contrasting median and mean income (a flawed measure for various reasons) was just the first idea I had when I was trying to sanity-check the common-sense idea that because it's easier to get money if you already have money, social polarization is likely to grow.
As far as the US is concerned, campaign finance reform often gets mentioned as the most immediate step to improve upon the current situation.
As to the big-picture problems, frankly, I'm not sure humanity as a species is enlightened enough to overcome self-interest and inertia to ever fix the systemic problems present in the current way we organize society. Hope for benevolent robot overlords, I guess ;)
You believe access to special financial instruments (such as..?) is the reason rich people can get richer? Can you expand on that
Not OP but some might be: illiquid alternative investments with lockup periods, investments that require investors to be "accredited investors", funds with large minimums, outright purchases of investment real estate.
Looking at the graph, an at least equally accurate headline would be „inflation-adjusted median US income stays flat since the last 20 years while share of expenses for medical, housing, childcare and education costs skyrockets in the same time“
I know the validity of the CPI is controversial, and I'm expressing no opinion on its makeup and accuracy, but in theory the CPI is meant to adjust for all those items.
https://www.investopedia.com/university/releases/cpi.asp
https://www.investopedia.com/university/releases/cpi.asp
Those are not CPI charts, but derived from them. And they are not accurate for the last few years due to methodological changes, where most of the supposed catch up has occurred. From a PEW study using the same numbers:
"The 2015 ASEC utilized a redesigned set of income questions, so the household income figures reported for calendar year 2014 may not be fully comparable to earlier years. The 2014 ASEC tested the new redesigned income questions by offering five-eighths of the sample the traditional income questions and three-eighths of the sample the redesigned questions. Median household income for calendar year 2013 was $53,585 (in 2013 dollars) based on the redesigned income questions compared with an estimated $51,939 using the traditional income questions. The difference reflects both the different questionnaire and the different sampled households responding to the questionnaires." http://www.pewsocialtrends.org/2015/12/09/methodology/
Nonetheless, even though these numbers attempt to take costs into account, and even if they were accurate, remaining stagnant over almost two decades of intense technological development indicates a societal failure.
"The 2015 ASEC utilized a redesigned set of income questions, so the household income figures reported for calendar year 2014 may not be fully comparable to earlier years. The 2014 ASEC tested the new redesigned income questions by offering five-eighths of the sample the traditional income questions and three-eighths of the sample the redesigned questions. Median household income for calendar year 2013 was $53,585 (in 2013 dollars) based on the redesigned income questions compared with an estimated $51,939 using the traditional income questions. The difference reflects both the different questionnaire and the different sampled households responding to the questionnaires." http://www.pewsocialtrends.org/2015/12/09/methodology/
Nonetheless, even though these numbers attempt to take costs into account, and even if they were accurate, remaining stagnant over almost two decades of intense technological development indicates a societal failure.
Yes and no. The ASEC survey is capturing total money income, which is not the same as total compensation. It's an important difference, because total compensation includes things like the value of employer-provided health insurance that has never been included in the total money income measure.
Also keep in mind that a lot of that intense technological development has resulted in falling costs for a wide variety of goods over time.
http://www.aei.org/publication/the-chart-of-the-century-make...
One of the bigger questions that society needs to answer is why the costs of the things that have been rising so much faster than incomes are doing so.
Also keep in mind that a lot of that intense technological development has resulted in falling costs for a wide variety of goods over time.
http://www.aei.org/publication/the-chart-of-the-century-make...
One of the bigger questions that society needs to answer is why the costs of the things that have been rising so much faster than incomes are doing so.
value of employer-provided health insurance that has never been included in the total money income measure
How do you measure the value of that health insureance? You can of course post the sticker price, but the healthcare that the dollar buys you is difficult to measure. Life expectancy tells that the rest of the OECD is there with the US but pays 25 % of the costs.
Also keep in mind that a lot of that intense technological development has resulted in falling costs for a wide variety of goods over time
It's like a certain re-work of the Bible. Their version of Revelation 6 reads : "A pound of bread will now be 90 Euros. But the price of a Porsche will remain unchanged." And we all thought that the Apocalypse of St John was literature, not an accurate prediction of the future! Yes, technological progress can bring down the price of an i-Pad but won't do anything about the rent.
How do you measure the value of that health insureance? You can of course post the sticker price, but the healthcare that the dollar buys you is difficult to measure. Life expectancy tells that the rest of the OECD is there with the US but pays 25 % of the costs.
Also keep in mind that a lot of that intense technological development has resulted in falling costs for a wide variety of goods over time
It's like a certain re-work of the Bible. Their version of Revelation 6 reads : "A pound of bread will now be 90 Euros. But the price of a Porsche will remain unchanged." And we all thought that the Apocalypse of St John was literature, not an accurate prediction of the future! Yes, technological progress can bring down the price of an i-Pad but won't do anything about the rent.
> One of the bigger questions that society needs to answer is why the costs of the things that have been rising so much faster than incomes are doing so.
I don't really think it is a question that needs to be answered, but a problem that needs to be resolved. It's pretty well documented that income inequality in the US is at an all time high and will only get worse with more automation and recent changes to the tax codes.
I don't really think it is a question that needs to be answered, but a problem that needs to be resolved. It's pretty well documented that income inequality in the US is at an all time high and will only get worse with more automation and recent changes to the tax codes.
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What do those four areas have in common, incredible levels of government manipulation and funding. Seriously, the areas where the government subsidizes, buries under regulation, or bleats about during election season, are all areas that suffer higher than normal costs increases.
Yes, and a lot of left-leaning people continue to think that “just a bit more government regulation and subsidies” and they’ll get it right - this time for sure!
Housing - build more and higher density.
Healthcare - price transparency and make it easier to shop around. Incentivize frugality.
Education - stop letting 18 year olds take out $200k in loans for poetry degrees.
It’s almost like industries protected from essential market functions become disasters! Who would have thought?
Housing - build more and higher density.
Healthcare - price transparency and make it easier to shop around. Incentivize frugality.
Education - stop letting 18 year olds take out $200k in loans for poetry degrees.
It’s almost like industries protected from essential market functions become disasters! Who would have thought?
European view here. We're pretty much all left-leaning from an US-perspective.
> Housing - build more and higher density.
Zoning is an incredibly hard science. Hardly any country on earth manages to get this right. Solutions are often also highly specific to local parameters. Though admittedly, the US has glaring issues with some housing areas being super spread out and low density outside of city centers.
> Healthcare - price transparency and make it easier to shop around. Incentivize frugality.
The problem of making healthcare universal and affordable has been solved plenty of times around the globe already. Obama's administration made a huge leap in the right direction, but there's more track to cover and issues to fix before the US's healthcare system becomes comparable to a say, European, equivalent. They never got the chance to finish this though.
> Education - stop letting 18 year olds take out $200k in loans for poetry degrees.
Generally having education governed by free market forces, thus giving the best education to the highest bidder, kind of goes against the US's slogan of (equal) opportunity. Not to mention all the other issues with that idea. Again, just copy any of the plenty of countries with a better system.
And don't give me any of that "But the US is a larger country and thus those solutions wouldn't work". What happened to divide and conquer? Just have administration sit at state level and you get to pretend the US is really 50 smaller countries - divide further as needed (some countries like Germany use this strategy to divide administration of their education system as well). Also there's plenty of countries with a number citizens in a comparable order of magnitude with working systems.
> Housing - build more and higher density.
Zoning is an incredibly hard science. Hardly any country on earth manages to get this right. Solutions are often also highly specific to local parameters. Though admittedly, the US has glaring issues with some housing areas being super spread out and low density outside of city centers.
> Healthcare - price transparency and make it easier to shop around. Incentivize frugality.
The problem of making healthcare universal and affordable has been solved plenty of times around the globe already. Obama's administration made a huge leap in the right direction, but there's more track to cover and issues to fix before the US's healthcare system becomes comparable to a say, European, equivalent. They never got the chance to finish this though.
> Education - stop letting 18 year olds take out $200k in loans for poetry degrees.
Generally having education governed by free market forces, thus giving the best education to the highest bidder, kind of goes against the US's slogan of (equal) opportunity. Not to mention all the other issues with that idea. Again, just copy any of the plenty of countries with a better system.
And don't give me any of that "But the US is a larger country and thus those solutions wouldn't work". What happened to divide and conquer? Just have administration sit at state level and you get to pretend the US is really 50 smaller countries - divide further as needed (some countries like Germany use this strategy to divide administration of their education system as well). Also there's plenty of countries with a number citizens in a comparable order of magnitude with working systems.
> European view here. We're pretty much all left-leaning from an US-perspective.
I don’t think that’s actually true. Western Europe is often more social democratic in principles, but often quite conservative in implementation. For example, Europe relies heavily in VAT, which has theoretical benefits but is regressive. Healthcare in Germany is paid for by an insurance contribution that is much higher for the individual, but phases out on income above about $60,000 per year. Meanwhile, in the US you pay Medicare contributions on all income, and the left is pushing to make Social Security contributions the same way.
Likewise with college. Germany would pay a lot more to offer free education if it didn’t aggressively control the pipeline of students into colleges. That idea would be alien to the left in the US, where the belief is that everyone should go to college.
I don’t think that’s actually true. Western Europe is often more social democratic in principles, but often quite conservative in implementation. For example, Europe relies heavily in VAT, which has theoretical benefits but is regressive. Healthcare in Germany is paid for by an insurance contribution that is much higher for the individual, but phases out on income above about $60,000 per year. Meanwhile, in the US you pay Medicare contributions on all income, and the left is pushing to make Social Security contributions the same way.
Likewise with college. Germany would pay a lot more to offer free education if it didn’t aggressively control the pipeline of students into colleges. That idea would be alien to the left in the US, where the belief is that everyone should go to college.
> Healthcare in Germany is paid for by an insurance contribution that is much higher for the individual, but phases out on income above about $60,000 per year. Meanwhile, in the US you pay Medicare contributions on all income, and the left is pushing to make Social Security contributions the same way.
Yeah, but in Germany most things are actually covered by the insurance, whereas in the US even people with really good insurance can face huge bills for things like being in the wrong hospital or being treated by the wrong doctor, which sounds utterly bizarre from a European perspective.
> Likewise with college. Germany would pay a lot more to offer free education if it didn’t aggressively control the pipeline of students into colleges. That idea would be alien to the left in the US, where the belief is that everyone should go to college.
To phrase that another way, in the US you believe that anyone with the money should be able to go to university.
Also, a key difference: taxation for public services is pretty universally supported in Europe. Even by the right wing.
Yeah, but in Germany most things are actually covered by the insurance, whereas in the US even people with really good insurance can face huge bills for things like being in the wrong hospital or being treated by the wrong doctor, which sounds utterly bizarre from a European perspective.
> Likewise with college. Germany would pay a lot more to offer free education if it didn’t aggressively control the pipeline of students into colleges. That idea would be alien to the left in the US, where the belief is that everyone should go to college.
To phrase that another way, in the US you believe that anyone with the money should be able to go to university.
Also, a key difference: taxation for public services is pretty universally supported in Europe. Even by the right wing.
With respect to out-of-network coverage: Germany also has a quarter of the population of the US and an land area smaller than several US states. Which is just to say, it's probably easier to provision a reliably coherent network of health care providers in Germany than it would be to do that across all 50 states.
> [...] it's probably easier to provision a [...] network of health care providers [among Germany's 16 Bundeslaender] than [...] across all 50 states.
Maybe. Slightly. Not really a challenge in the computer age.
Also the last paragraph of my comment above still applies.
Maybe. Slightly. Not really a challenge in the computer age.
Also the last paragraph of my comment above still applies.
> Obama's administration made a huge leap in the right direction, but there's more track to cover and issues to fix before the US's healthcare system becomes comparable to a say, European, equivalent.
I don't see how you can say this. My premiums literally doubled under Obamacare and now I have a new thing called "co-insurance" meaning that I pay 20% of all bills, period.
Edit: why would I be downvoted for relating my experience?
I don't see how you can say this. My premiums literally doubled under Obamacare and now I have a new thing called "co-insurance" meaning that I pay 20% of all bills, period.
Edit: why would I be downvoted for relating my experience?
I suspect you're being downvoted because you assume that your experience is universal, or that because you saw an increase in costs under the ACA that inherently means that it was bad.
Many people saw reductions in costs under the ACA. Many people who were not insured before are insured now because of it. It sucks that you ended up paying more, but that doesn't justify "I don't know how you can say [it was a huge leap in the right direction]."
Many people saw reductions in costs under the ACA. Many people who were not insured before are insured now because of it. It sucks that you ended up paying more, but that doesn't justify "I don't know how you can say [it was a huge leap in the right direction]."
Fair enough, thanks for the reply.
I guess I should say, it was really bad for me so I don't support it. The same could be said in the other direction though, if it was really bad for me I'm sure it was really bad for others. So maybe it wasn't universally a step in the right direction or a step in the wrong direction.
I suspect it was bad for people who were healthy and earn enough money to be disqualified from any sort of tax break or assistance.
I guess I should say, it was really bad for me so I don't support it. The same could be said in the other direction though, if it was really bad for me I'm sure it was really bad for others. So maybe it wasn't universally a step in the right direction or a step in the wrong direction.
I suspect it was bad for people who were healthy and earn enough money to be disqualified from any sort of tax break or assistance.
I didn't downvote you, but I'd like to reply to why this might be a leap in the right direction.
1) Universal insurance increases the fluidity in the labor market because people are no longer forced to stay in a job to have health insurance. This can be the difference between someone starting their own small business and sticking with a large corporation for the benefits.
2) Providing access to health care for the (currently) uninsured means they can manage their conditions and prevent them from deteriorating, instead of going through a costly cycle of ER visit -> stabilization -> ER visit. Because hospitals are obligated to stabilize anyone who goes to the ER, these procedures increase hospital operating expenses which is passed on either to (1) the tax payer or (2) insured patients. The best care both health and fiscal-wise is preventative care.
3) Obamacare was a leap in the right direction, but definitely did not go all the way. A portion of that may be that it simply takes time to adjust to a new system, but as parts of the old system are rolled back, it becomes increasingly less effective. For example, universal coverage without the individual mandate is costly for insurance companies, resulting in higher premiums.
4) People make poor decisions and forgo medical insurance only to have a medical disaster happen and land them in considerable debt. The affects of this debt continue to plague them for years after. Carrying crippling debt affects not only these people but any of their dependents, so the effects compound. The usual response is that the responsible shouldn't have to pay for the irresponsibles' poor choices, but you'll pay for them either way, just in one case it's easy to quantify the effect and in the other case the effect is nebulous are hard to pin down exactly. For example, studies have shown that acute poverty has an effect on intelligence. The more people that run around stressed by their debt, the less likely they're going to make smart choices going forward with respect to their finances, politics, etc.
Assuming you believe that Obamacare was a leap in the right direction, you have to recognize that it did not go far enough or reach a stable enough point to where the benefits may have been fully realized. Even if you agree that a single payer system or a European style system is better, you are still forced to tackle the transition period during which responsibilities and policies have to reshuffle between hospitals, the government, and insurance companies. That is going to be messy any which way you cut it, but the current system is clearly broken, so it might be better to rip the bandaid off. Aside from that, the benefits wouldn't primarily be in the amount your premiums are, but in the indirect benefits of having accessible health care for all.
1) Universal insurance increases the fluidity in the labor market because people are no longer forced to stay in a job to have health insurance. This can be the difference between someone starting their own small business and sticking with a large corporation for the benefits.
2) Providing access to health care for the (currently) uninsured means they can manage their conditions and prevent them from deteriorating, instead of going through a costly cycle of ER visit -> stabilization -> ER visit. Because hospitals are obligated to stabilize anyone who goes to the ER, these procedures increase hospital operating expenses which is passed on either to (1) the tax payer or (2) insured patients. The best care both health and fiscal-wise is preventative care.
3) Obamacare was a leap in the right direction, but definitely did not go all the way. A portion of that may be that it simply takes time to adjust to a new system, but as parts of the old system are rolled back, it becomes increasingly less effective. For example, universal coverage without the individual mandate is costly for insurance companies, resulting in higher premiums.
4) People make poor decisions and forgo medical insurance only to have a medical disaster happen and land them in considerable debt. The affects of this debt continue to plague them for years after. Carrying crippling debt affects not only these people but any of their dependents, so the effects compound. The usual response is that the responsible shouldn't have to pay for the irresponsibles' poor choices, but you'll pay for them either way, just in one case it's easy to quantify the effect and in the other case the effect is nebulous are hard to pin down exactly. For example, studies have shown that acute poverty has an effect on intelligence. The more people that run around stressed by their debt, the less likely they're going to make smart choices going forward with respect to their finances, politics, etc.
Assuming you believe that Obamacare was a leap in the right direction, you have to recognize that it did not go far enough or reach a stable enough point to where the benefits may have been fully realized. Even if you agree that a single payer system or a European style system is better, you are still forced to tackle the transition period during which responsibilities and policies have to reshuffle between hospitals, the government, and insurance companies. That is going to be messy any which way you cut it, but the current system is clearly broken, so it might be better to rip the bandaid off. Aside from that, the benefits wouldn't primarily be in the amount your premiums are, but in the indirect benefits of having accessible health care for all.
> Aside from that, the benefits wouldn't primarily be in the amount your premiums are, but in the indirect benefits of having accessible health care for all.
Yes, it didn't benefit me at all. Now I pay much more money. I think that's going to have to be addressed if you want to get people on board.
"It's great for other people, but sucks for you" isn't going to convert people. Also when someone says Obamacare was a disaster for them, they're probably telling the truth. It was no small amount of money, it significantly impacted my monthly run rate and I'm sure it hurt people who don't make as much money even more.
Yes, it didn't benefit me at all. Now I pay much more money. I think that's going to have to be addressed if you want to get people on board.
"It's great for other people, but sucks for you" isn't going to convert people. Also when someone says Obamacare was a disaster for them, they're probably telling the truth. It was no small amount of money, it significantly impacted my monthly run rate and I'm sure it hurt people who don't make as much money even more.
For what it's worth: Education in Switzerland is mostly managed on communal level. Cantons have a certain administrative influence, but only really run the gymnasiums (higher secondary school, prep for uni) and interestingly enough cantons run the universities.
The only federal institutions of higher learning are the ETH / EPFL and their offshoots.
It seems to work pretty well.
The only federal institutions of higher learning are the ETH / EPFL and their offshoots.
It seems to work pretty well.
> kind of goes against the US's slogan of (equal) opportunity.
No more than the government not providing access to private yachts to all citizens. Equal opportunity doesn’t mean equal buying ability.
No more than the government not providing access to private yachts to all citizens. Equal opportunity doesn’t mean equal buying ability.
Your notion of equal opportunity has an analog with respect to being equal under the law: the rich and poor alike are not permitted to sleep under bridges, etc.
Wow. This is incredibly disingenuous.
You don't need a yacht to compete with others.
You do need education though.
You don't need a yacht to compete with others.
You do need education though.
You may need education, but certainly not school.
Life, Liberty, and the Pursuit Of Happiness*
*As long as you can afford it.
*As long as you can afford it.
Not sure if I'm left-leaning or not, but the problem is that we need increased competition.
The reason why this is a problem is that sometimes it means decreased regulation, and sometimes it means providing more government services and more regulation. But that doesn't really fit well into the two major political parties.
For example, I'd probably seen as even more radical about healthcare than what you're writing--I'd advocate eliminating licensure laws and radically reorient the mission of the FDA in part by removing its regulatory authority over a lot of things it currently.
But I also advocate sharply reducing patents and copyright terms, and rolling out federal and municipal broadband. I also think public education needs a lot more funding.
It seems like political discussions in the US become oriented around protecting entrenched business interests, or protecting citizens through increased regulation.
The reason why this is a problem is that sometimes it means decreased regulation, and sometimes it means providing more government services and more regulation. But that doesn't really fit well into the two major political parties.
For example, I'd probably seen as even more radical about healthcare than what you're writing--I'd advocate eliminating licensure laws and radically reorient the mission of the FDA in part by removing its regulatory authority over a lot of things it currently.
But I also advocate sharply reducing patents and copyright terms, and rolling out federal and municipal broadband. I also think public education needs a lot more funding.
It seems like political discussions in the US become oriented around protecting entrenched business interests, or protecting citizens through increased regulation.
>Education - stop letting 18 year olds take out $200k in loans for poetry degrees.
This sounds like government regulation?
>Housing - build more and higher density.
How do you account for the fact that not really anybody is making housing for the poor or low income, affordable housing because it's not profitable? There's plenty of demand, but extremely low supply. Would that be accomplished with government regulation and subsidies?
>Healthcare - price transparency and make it easier to shop around. Incentivize frugality.
Richest country on Earth ever, and we need to be frugal and maybe skip our insulin prescription this month.
I don't think Government is the problem, the extreme want for extraordinary wealth and power created by this system of unchecked runaway Capitalism and that very influence of corruption on almost every representative is the problem.
This sounds like government regulation?
>Housing - build more and higher density.
How do you account for the fact that not really anybody is making housing for the poor or low income, affordable housing because it's not profitable? There's plenty of demand, but extremely low supply. Would that be accomplished with government regulation and subsidies?
>Healthcare - price transparency and make it easier to shop around. Incentivize frugality.
Richest country on Earth ever, and we need to be frugal and maybe skip our insulin prescription this month.
I don't think Government is the problem, the extreme want for extraordinary wealth and power created by this system of unchecked runaway Capitalism and that very influence of corruption on almost every representative is the problem.
> >Education - stop letting 18 year olds take out $200k in loans for poetry degrees.
> This sounds like government regulation?
No - the reason students can take outrageous loans is that the government enforces that they always get paid back. There is no bankruptcy discharge for student debt. Consequently, universities increase prices as the government allows students to take more debt. No bank in the world would provide a $200k loan for a poetry degree if it could be discharged in bankruptcy.
> >Housing - build more and higher density.
> How do you account for the fact that not really anybody is making housing for the poor or low income, affordable housing because it's not profitable? There's plenty of demand, but extremely low supply. Would that be accomplished with government regulation and subsidies?
The amount of red tape and bureaucracy required for building new housing, and other requirements like minimum lot sizes, makes it more economical to build higher-end units. But even with that, more total supply filters down and helps stabilize prices, including the lower end. The ultimate left-wing fantasy is rent control, as if regulating prices by government fiat magically solves the problem.
> >Healthcare - price transparency and make it easier to shop around. Incentivize frugality.
> Richest country on Earth ever, and we need to be frugal and maybe skip our insulin prescription this month.
No, but if you were able to shop around for a major, but scheduled, surgery such as a hip replacement, you may choose a cheaper option if you were appropriately incentivized. People already fly to foreign countries to get procedures done, because travel, hotel, and the procedure are still cheaper and higher-quality than the American healthcare system.
> This sounds like government regulation?
No - the reason students can take outrageous loans is that the government enforces that they always get paid back. There is no bankruptcy discharge for student debt. Consequently, universities increase prices as the government allows students to take more debt. No bank in the world would provide a $200k loan for a poetry degree if it could be discharged in bankruptcy.
> >Housing - build more and higher density.
> How do you account for the fact that not really anybody is making housing for the poor or low income, affordable housing because it's not profitable? There's plenty of demand, but extremely low supply. Would that be accomplished with government regulation and subsidies?
The amount of red tape and bureaucracy required for building new housing, and other requirements like minimum lot sizes, makes it more economical to build higher-end units. But even with that, more total supply filters down and helps stabilize prices, including the lower end. The ultimate left-wing fantasy is rent control, as if regulating prices by government fiat magically solves the problem.
> >Healthcare - price transparency and make it easier to shop around. Incentivize frugality.
> Richest country on Earth ever, and we need to be frugal and maybe skip our insulin prescription this month.
No, but if you were able to shop around for a major, but scheduled, surgery such as a hip replacement, you may choose a cheaper option if you were appropriately incentivized. People already fly to foreign countries to get procedures done, because travel, hotel, and the procedure are still cheaper and higher-quality than the American healthcare system.
It seems that if people were allowed to do whatever they wanted with housing, with no possibility of it being forced to change, then the predictive entrenchment would strongly incentivize the creation of new areas and developments. Right now nearly all of the US is relatively undeveloped. A quick ddg search puts the figure at 3% of the US as being urbanized. And I think in times past it's very likely that this entrenchment did play a major role. There was a time when we had some rather modern and well developed cities with great standards of living, and then a whole chunk of land that was completely inhospitable and filled with often hostile native inhabitants. Yet instead of the United States becoming an extension of Philadelpha, New Amsterdam/New York City, and Boston, a figuratively and literally rich nation expanded outward independent of these hubs.
Yes, areas that suffer higher than normal cost increases, are areas that capture the attention of the public and government, because those are the areas that have important concerns to address.
Sort of. Usually "regulation" in these areas ends up being a messy compromise between ideologues, with any economic subtlety left by the wayside.
Edit: in the case of education and medical, administrative costs are growing tremendously. Not sure if that's because of excessive government regulation but it would be interesting if someone could untangle that.
Edit: in the case of education and medical, administrative costs are growing tremendously. Not sure if that's because of excessive government regulation but it would be interesting if someone could untangle that.
If you want an extremely accurate and often hilarious book on what’s wrong with healthcare, I recommend “Overcharged”. If anything it taught me that everything is negotiable with health insurance.
https://www.amazon.com/Overcharged-Americans-Much-Health-Car...
https://www.amazon.com/Overcharged-Americans-Much-Health-Car...
Then why are beef, gas, water, and cars affordable?
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Required reading for any discussion on median household income. Note in particular compositional effects - household size and mix have changed over time.
https://www.minneapolisfed.org/publications/the-region/where...
https://www.minneapolisfed.org/publications/the-region/where...
It’s fascinating to me how much of our discourse is based on “facts” that simply aren’t true.
I think it's overstating the case to say there's "no there there" in income stagnation - other and more recent data point to alarming trends in total individual compensation and in overall inequality. But it's important to take into account the flaws in certain metrics we use.
I’m not suggesting there is no “there there.” Just that here is this basic shibboleth, trotted out multiple times a week by the media, that’s just not true. Does it mean everything is fine? No. Does it suggest that we’re living with the mixed results of various well intentioned policies, rather than the outcome of actual cartoon villany? I think so.
Agreed. Didn't mean to suggest that's what you were saying, just to address the general point.
This frustrates me to no end. I'm quite alright with being exposed to extreme left and right wing opinions on a daily basis. But I simply can't stand all blatant misinformation which is fuelling seemingly ever increasing levels of indignation about issues that aren't even really real issues.
I get particularly disheartened when I see clickbait titles such as 'income flat again: 10 years straight' from traditionally trustworthy public news channels (those EU institutions that have been around for many decades, aren't funded by advertising and have social, not commercial motives). And then I think, no way, I click, and all the way down the article it has a brief memo where it says 'some economists say this is merely an interpretation, as we were referring to household income being flat, even though the number of people who lived in the household decreased. This could also be interpreted as rising incomes and everyone having more real estate per person'.
At that point it just strikes me that they intentionally made good news look bad, an organisation looking only to inform the public, not get clicks. It's like the disaster industry isn't even dependent on commercial incentives anymore, it's like this cultural trait journalists seem to have. (or I dare say get the impression, have developed as of late, but I'd probably be myopic to say that.)
I get particularly disheartened when I see clickbait titles such as 'income flat again: 10 years straight' from traditionally trustworthy public news channels (those EU institutions that have been around for many decades, aren't funded by advertising and have social, not commercial motives). And then I think, no way, I click, and all the way down the article it has a brief memo where it says 'some economists say this is merely an interpretation, as we were referring to household income being flat, even though the number of people who lived in the household decreased. This could also be interpreted as rising incomes and everyone having more real estate per person'.
At that point it just strikes me that they intentionally made good news look bad, an organisation looking only to inform the public, not get clicks. It's like the disaster industry isn't even dependent on commercial incentives anymore, it's like this cultural trait journalists seem to have. (or I dare say get the impression, have developed as of late, but I'd probably be myopic to say that.)
Per Congressional Research Service, real wages have been flat or declined since 1979 for all but the rich [1]. No 'clickbait titles'.
[1] https://fas.org/sgp/crs/misc/R45090.pdf
[1] https://fas.org/sgp/crs/misc/R45090.pdf
As you can see from my post referencing journalism in Europe, I'm not referring to the US case.
You'd also see that my post referenced income, not wages. An important distinction, and exactly the kind that journalists don't make when they say 'incomes aren't rising' when they are, and point only to one metric (real wages) to prove it. In a sense your post is a bit ironic.
Hourly wages are absolutely important, but your own research example itself indicates it's not the end-all metric, either. For example, your study mentions a period where real wages fell, but overal compensation remained stable, due to other non-wage benefits compensating for the loss in wages. In fact, your study mentions quite clearly that health-benefits are left out of the study, despite being quite a unique aspect of private labor compensation in the US (whereas most other countries have publicly funded healthcare) and healthcare being a key category of high-inflation. So you're counting the inflation to adjust the purchasing power of wages, but you're not counting non-wage compensation of healthcare-benefits which have risen sharply.
The study of course also doesn't take into account employment changes, as the study carefully points out. i.e., the sharp increase in labor force participation of women age 25-54 in the past 2 generations, isn't taken into account if you're talking about income, only the fact the median women earns 25% more. That understates improvements in income. Where you went from 4/10 women earning $10 an hour, to now having 7/10 women earning $12.50 an hour, that'd an increase of 118% in the total income earned by women, while real wages 'only' grew by 25%.
Rather than control for each individual confounder, one can better just look at real median personal income.
https://fred.stlouisfed.org/series/MEPAINUSA672N
And you find it's 40% higher than in 1979. This metric isn't perfect either, but it does a better job than just looking at hourly wages for working people.
Lastly, there are some apples / oranges comparisons still left in inflation. Healthcare inflation is tricky to measure and is mostly done on a price-basis. That's different from other goods, e.g. the price of a harddrive, which goes up in nominal terms (a typical harddrive costs more than 10 years ago in dollar terms), but is adjusted for the fact it's 10x larger than it was 10 years ago. In healthcare however, we don't take into account that life expectancy has improved by about half a decade in 1979. Sometimes we tend to forget our lives are outpacing increases in pension age, i.e. we live longer and with more leisure. This, too, is a form of wealth and could be expressed as income. Instead, the only thing we tend to point to is that our healthcare costs are up, and thus if we adjust our wages by these costs (and then subsequently leave out non-wage compensation that pays for healthcare and retirement), observe that our wages are down or flat in real terms. That's short sighted.
But more importantly, I wasn't referencing the US at all.
You'd also see that my post referenced income, not wages. An important distinction, and exactly the kind that journalists don't make when they say 'incomes aren't rising' when they are, and point only to one metric (real wages) to prove it. In a sense your post is a bit ironic.
Hourly wages are absolutely important, but your own research example itself indicates it's not the end-all metric, either. For example, your study mentions a period where real wages fell, but overal compensation remained stable, due to other non-wage benefits compensating for the loss in wages. In fact, your study mentions quite clearly that health-benefits are left out of the study, despite being quite a unique aspect of private labor compensation in the US (whereas most other countries have publicly funded healthcare) and healthcare being a key category of high-inflation. So you're counting the inflation to adjust the purchasing power of wages, but you're not counting non-wage compensation of healthcare-benefits which have risen sharply.
The study of course also doesn't take into account employment changes, as the study carefully points out. i.e., the sharp increase in labor force participation of women age 25-54 in the past 2 generations, isn't taken into account if you're talking about income, only the fact the median women earns 25% more. That understates improvements in income. Where you went from 4/10 women earning $10 an hour, to now having 7/10 women earning $12.50 an hour, that'd an increase of 118% in the total income earned by women, while real wages 'only' grew by 25%.
Rather than control for each individual confounder, one can better just look at real median personal income.
https://fred.stlouisfed.org/series/MEPAINUSA672N
And you find it's 40% higher than in 1979. This metric isn't perfect either, but it does a better job than just looking at hourly wages for working people.
Lastly, there are some apples / oranges comparisons still left in inflation. Healthcare inflation is tricky to measure and is mostly done on a price-basis. That's different from other goods, e.g. the price of a harddrive, which goes up in nominal terms (a typical harddrive costs more than 10 years ago in dollar terms), but is adjusted for the fact it's 10x larger than it was 10 years ago. In healthcare however, we don't take into account that life expectancy has improved by about half a decade in 1979. Sometimes we tend to forget our lives are outpacing increases in pension age, i.e. we live longer and with more leisure. This, too, is a form of wealth and could be expressed as income. Instead, the only thing we tend to point to is that our healthcare costs are up, and thus if we adjust our wages by these costs (and then subsequently leave out non-wage compensation that pays for healthcare and retirement), observe that our wages are down or flat in real terms. That's short sighted.
But more importantly, I wasn't referencing the US at all.
Exactly. There is an earlier reply talking about household income being flat the last 50 years. What that ignores is that over that time household composition has gone from two earners to closer to one earner (averaged out).
But using a household unit for measure hides that change.
But using a household unit for measure hides that change.
link has the 2008 opinion of a federal reserve vice president, on why the middle class is doing just grand. why on earth would I even bother to read it?!
The author is vice president of the Research Division of the Federal Reserve Bank of Minneapolis. He's an economist, not a political appointee, and this is a presentation of findings, not an opinion piece.
Here's the update for August 2018:
http://politicalcalculations.blogspot.com/2018/10/august-201...
http://politicalcalculations.blogspot.com/2018/10/august-201...
Excellent job there. Thanks.
It’s entirely expected that unemployment this low will increase wage growth.
What’s different this time is that inflation has been so tame this far into the process. At this point in the 2000s boom cycle we saw inflation was ticking over 5%, whereas today it remains tame under 3%.
This means for the first time in a long time the higher wage growth is actually making a significant difference in people’s real income.
Another factor that’s not widely reported is that the insurance marketplaces seem to be stabilizing and rate increases for 2019 are single-digit and some areas are even seeing decreases. Compared to the 20, 30, 40% increases in the early years of the marketplace that makes a huge difference.
What’s different this time is that inflation has been so tame this far into the process. At this point in the 2000s boom cycle we saw inflation was ticking over 5%, whereas today it remains tame under 3%.
This means for the first time in a long time the higher wage growth is actually making a significant difference in people’s real income.
Another factor that’s not widely reported is that the insurance marketplaces seem to be stabilizing and rate increases for 2019 are single-digit and some areas are even seeing decreases. Compared to the 20, 30, 40% increases in the early years of the marketplace that makes a huge difference.
Except inflation mask the deeper issues, housing and health care has been increasing faster than inflation rate in many years. PcW reports health care (employee only) at 5.5-7.5 rate annually since 2010. They expect 2019 to have 6% rate.
It is interesting how you see that since I see it differently;
1. It is not a significant difference in real income since the costs of housing and health care cost has been increasing much faster than inflation. 2. The "rate" of the marketplace "premium" may be smaller, that does not mean the value of the plan is the same. They've been crippling the plans every year in my marketplace to remove max costs, so that in the long run, you will end up paying much more in medical costs. A few years ago, I wouldn't have to pay anything after a certain amount, drugs are covered, and now, for nearly 20% more monthly premium, I have to pay for all drugs, 20% of all medical costs even after deductible. 3. Insurance mandate expires in 2019. I'll just drop insurance as it's already too expensive even if the "premium" is only 10% higher than last year. It would've been cheaper before the ACA with some decent plans.
It is interesting how you see that since I see it differently;
1. It is not a significant difference in real income since the costs of housing and health care cost has been increasing much faster than inflation. 2. The "rate" of the marketplace "premium" may be smaller, that does not mean the value of the plan is the same. They've been crippling the plans every year in my marketplace to remove max costs, so that in the long run, you will end up paying much more in medical costs. A few years ago, I wouldn't have to pay anything after a certain amount, drugs are covered, and now, for nearly 20% more monthly premium, I have to pay for all drugs, 20% of all medical costs even after deductible. 3. Insurance mandate expires in 2019. I'll just drop insurance as it's already too expensive even if the "premium" is only 10% higher than last year. It would've been cheaper before the ACA with some decent plans.
Student borrowing has also flattened off to single digit increases, similar to healthcare cost increases.
Either those things have nearly maxed out their cost potential, or it's the strong dollar (the dollar imploded during the disastrous Bush years, which sent nearly everything priced in dollars skyrocketing that wasn't nailed down (consumer prices and wages were largely nailed down)).
Might be a combination of those things. The average student debt acquired for a four year degree, has been nearly flat for six years, after soaring from $20k to $30k in six or seven years (between the years '05-06 and '11-12). This six year span is the longest period of flat growth in individual student debt accumulation in a quarter century.
Either those things have nearly maxed out their cost potential, or it's the strong dollar (the dollar imploded during the disastrous Bush years, which sent nearly everything priced in dollars skyrocketing that wasn't nailed down (consumer prices and wages were largely nailed down)).
Might be a combination of those things. The average student debt acquired for a four year degree, has been nearly flat for six years, after soaring from $20k to $30k in six or seven years (between the years '05-06 and '11-12). This six year span is the longest period of flat growth in individual student debt accumulation in a quarter century.
Two important dates that clarify your accurate observations:
2005 - As part of the 'Bankruptcy Abuse Prevention and Consumer Protection Act' student loans from for-profit and non-governmental entities were given immunity to dismissal in bankruptcy. [1]
2012 - College enrollment flatlined. [2]
It's basic supply and demand. The widespread deregulation of university tuitions paired with lifelong debt even from private creditors removed all cost barriers to education. And so the only weighting factor in the supply:demand relationship was how many people were willing to take the poisoned fruits of ever-larger life long loans. And so universities kept ratcheting tuition up under spurious justification. Until the number of people entering university flat lined.
[1] - https://en.wikipedia.org/wiki/Bankruptcy_Abuse_Prevention_an...
[2] - https://www.statista.com/statistics/183995/us-college-enroll...
2005 - As part of the 'Bankruptcy Abuse Prevention and Consumer Protection Act' student loans from for-profit and non-governmental entities were given immunity to dismissal in bankruptcy. [1]
2012 - College enrollment flatlined. [2]
It's basic supply and demand. The widespread deregulation of university tuitions paired with lifelong debt even from private creditors removed all cost barriers to education. And so the only weighting factor in the supply:demand relationship was how many people were willing to take the poisoned fruits of ever-larger life long loans. And so universities kept ratcheting tuition up under spurious justification. Until the number of people entering university flat lined.
[1] - https://en.wikipedia.org/wiki/Bankruptcy_Abuse_Prevention_an...
[2] - https://www.statista.com/statistics/183995/us-college-enroll...
There still is no real wage growth [1]. Low unemployment should allow workers to bargain, but it's not happening.
[1] https://www.washingtonpost.com/business/2018/08/10/america-w...
[1] https://www.washingtonpost.com/business/2018/08/10/america-w...
the chart shows that in inflation-adjusted terms we've lost ground relative to the year 2000. and of course, prices have skyrocketed for essential goods like healthcare.
and new essential goods are necessary now, too. think internet and phone, neither of which were as expensive or as necessary in 2000.
then there's the unprecedented level of student loan debt.
so yeah, people are far poorer now.
i'm tempted to say that the unemployment stat isn't real either. 5% unemployment is supposed to be churn, yet we're beneath that, which means people are afraid to leave jobs or there is some other thing that the stats are hiding.
and new essential goods are necessary now, too. think internet and phone, neither of which were as expensive or as necessary in 2000.
then there's the unprecedented level of student loan debt.
so yeah, people are far poorer now.
i'm tempted to say that the unemployment stat isn't real either. 5% unemployment is supposed to be churn, yet we're beneath that, which means people are afraid to leave jobs or there is some other thing that the stats are hiding.
IIRC, the unemployment number comes has eligibility requirements. Meaning some NEETs are no longer part of the statistic if they've been out of the workforce for too long.
trump is going to take full credit of that and mention it many many times.
And he'd be right to get mileage out of it. The media would certainly hang it around his neck if the opposite were true.
Can you imagine the media saying "now let's be fair to President Trump, the current economic situation is due to Obama-era policies" if we were in the middle of a recession right now?
Can you imagine the media saying "now let's be fair to President Trump, the current economic situation is due to Obama-era policies" if we were in the middle of a recession right now?
Like what? TARP, for example, came out of the tail end of the Bush administration (literally and figuratively)
Uh oh, better raise those interest rates. Can't have inflation creeping up. Now that the middle class is starting to get a bit of the gains, the business cycle needs to be reset.
Don't make any mistake, the middle class still isn't getting any gains.
How isn't it making any gains? Anyone who has retirement savings invested properly (in stocks, not under a mattress or in a bank) is making use of these gains.
They don't have stocks and probably not much of a retirement. Those things are reserved for the already wealthy.
http://time.com/money/5054009/stock-ownership-10-percent-ric...
http://time.com/money/5054009/stock-ownership-10-percent-ric...
It's not pretty: https://i.imgur.com/58MIBxB.png
edit:
here's an alternative version for those who think letting the y-axis start at 70 is too confusing: https://i.imgur.com/zSNjZY2.png