If after looking at the graphs I created (based the income data from the Congressional Budget Office) you decide you want to learn more about how the CBO calculates their numbers. You can take a look at an analysis of their report.
The following outlines the components of income included in the CBO’s analysis:
* Cash income, taxable and tax exempt, including wages, salaries, self-employment income, rents, taxable and nontaxable interest, dividends, realized capital gains, cash transfer payments, and retirement benefits
* Business taxes, including corporate income taxes, the employer’s share of Social Security, Medicare, and federal unemployment insurance payroll taxes (imputed to households, as per the assumptions on tax incidence above)
* Employees contributions to 401(k) retirement plans
* All in-kind benefits (Medicare, Medicaid, employer-paid health insurance premiums, food stamps, school lunches and breakfasts, housing assistance, and energy assistance)
Note that CBO:
* uses the Census Bureau’s fungible value measure for government in-kind transfers;
* does not adjust capital gains for inflation, and does not include unrealized capital gains or imputed rents on owner-occupied housing (see [1], pp. 23–24); and,
* double counts retirement income (see [1], p. 21).
Popularity: 2% [?]
Another post on the CBO report.
I combined the percentile income data for the past 20 years into three groups: bottom 60%, 60-95%, and top 5%.In 2002, if you lived in a household with a total income of:
less than $39,800 per year then you were in the bottom 60%
between $39,800 and $105,300 then you were in the 60-95% range
greater than $105,300 then you were in the top 5%
The first thing I noticed was that in 1997, 1998, 1999, 2000 the total combined income of the top 5% was greater than the combined income of the bottom 60%.
The second thing I saw was the same income drop in 2000 from my earlier graphs (see: Changes in U.S. Total Income and Changes in Household Income by Quintiles). However, you can see that this dramatic decline is concentrated in the top 5%.
But looking at the graph below, it is in fact the top 1% that had the big decline, all of the previous graphs rolled up this change into the top 20% and top 5%. It even effected the total income. So in fact it wasn’t the top 20% that was hit hard by the stock market crash but the top 1%.
Popularity: 3% [?]
Returning to the CBO report that looks at incomes across all households, I found a data table showing the change in the total income for each quintile (bottom 20%, 20-40%, 40-60%, 60-80% and the top 20%) over the past 20 years.In 2002, if you lived in a household with a total income of:
less than $15,900 per year then you were in the bottom 20%
between $15,900 and $27,300 then you were in the 20-40% group
between $27,300 and $39,800 then you were in the 40-60% group
between $39,800 and $59,400 then you were in the 60-80% group
greater than $59,400 then you were in the top 20%
What caught my attention is the dramatic rise (and partial fall) of the income going to the top 20%. While the other quintiles do not display this pattern.
It looks like the drop in United States’ total income (seen in the previous post) was due to the change in the top 20% alone.
As for the drop in income, what I think is going on is changes in the stock market effecting income. By looking at the S&P 500 index, we see the raise and fall in the stock market coincides with the changes in the top 20%’s income.
Popularity: 5% [?]
The Congressional Budget Office (CBO) has a report that looks at incomes across all households. Above, I have ploted the total income for the United States.
Below, I have ploted the average income for the United States. In both cases income drops after 2000.
Popularity: 4% [?]
A New Way To Be Underpaid
A little article I found on Forbes.com It explains how anyone can feel underpaid. Just depends on who you compare yourself to. And what method you use to calculate your true worth.
Here’s how it goes: General Electric (nyse: GE – news – people ) has about $750 billion in assets. If its CEO was paid like a hedge fund manager–who typically takes at least 1% of the assets and 20% or more of the profits–he would be paid $750 million–oops, it should be $7.5 billion!–just for showing up, plus a bonus if there was any profit. So what is GE chief Jeffrey Immelt doing being paid just $12.6 million
Popularity: 2% [?]
I found this data on the Census web site. What is interesting about this graph is that it shows the richest 20% of families in the United States has been capturing more of the total income since the mid-70s. Which means of course the bottom 80% is getting less.
Popularity: 2% [?]
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