Editore"s Note
Tilting at Windmills

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September 7, 2006
By: Kevin Drum

MEDIAN INCOME UPDATE....A few days ago I posted a map from the Detroit Free Press showing that median household incomes had dropped in nearly every state between 1999 and 2005. Via Asymmetrical Information, I see that the Freep screwed up: they used a different measure for the 1999 figures than for the 2005 numbers, and that made the decline look worse than it was.

Census figures are here, and while they aren't perfect, they do use the same methodology over time. This doesn't change the main conclusion of the original post, namely that median incomes have dropped even though the economy has been growing, but the drop wasn't quite as bad as it looked. The census figures are below.

I'll say one thing, though: those boys down in Texas sure did a whole lot better under Clinton than they have under Bush. If they were smart, they would have voted for Gore and kept the Shrub under wraps in Austin, where he couldn't have done so much damage to their economy.

Kevin Drum 5:07 PM Permalink | Trackbacks | Comments (80)

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Comments

According to the Detroit Free Press, they altered the 1999 numbers to 2005 money, which may make it look different - we had a decline in overall purchasing power of the dollar after 1999.

Posted by: Crissa on September 7, 2006 at 5:12 PM | PERMALINK

PS - your chart is wider than Washington Monthly allows your column to be. I can't stretch the window, 'cause it's a lame set pixel width.

Posted by: Crissa on September 7, 2006 at 5:13 PM | PERMALINK

Wow, what happened to Wisconsin? A 16.5% decline!

Posted by: cld on September 7, 2006 at 5:15 PM | PERMALINK

I've got it now, it's the cheese coming home to roost.

Posted by: cld on September 7, 2006 at 5:16 PM | PERMALINK

Wow that is a huge disparity in changes state to state. Looks odd. Love to see what people could do to explain the differences.

Good work to correct the previous post.

Posted by: Samuel Knight on September 7, 2006 at 5:22 PM | PERMALINK

Well, this is a real instance of integrity, to not just update the original post, but put a new corrected one at the front of the blog. I wonder if Brian Leiter and the rest of the lefty blogosphere will do the same.

Posted by: sean on September 7, 2006 at 5:26 PM | PERMALINK

Now I feel justified for wanting to quit my job and move to Hawaii.

Sean: now if you can just get the folks at Powerline/LGF/Michelle Malkin/The Corner etc to do the same. Wouldn't be holding my breath in anticipation, though.

Posted by: BeingThere on September 7, 2006 at 5:29 PM | PERMALINK

I was reading the comments on Assymetrical, and they were a real grab-bag.

It is only on the right that I see real debate on the subject.

On income inequities? Where? The only thing I've ever heard on the right about that subject is that 'it is appropriate'...

Which isn't so much of a discussion, if you ask me.

Posted by: Crissa on September 7, 2006 at 5:30 PM | PERMALINK

Something to consider about the median income level, if I correctly understand how it is measured, is how the tails are weighted. Do you have a more-or-less even tapering to the bottom and top household incomes (making it closer to an average income measurement) or more people at either end? Knowing this would show the true level of disparity across the population.

Interesting related article in the New Yorker.

Posted by: JeffII on September 7, 2006 at 5:30 PM | PERMALINK

Something to consider about the median income level, if I correctly understand how it is measured, is how the tails are weighted.

By definition of the median, exactly half the people make more money and half make less.

Posted by: Red State Mike on September 7, 2006 at 5:35 PM | PERMALINK

http://en.wikipedia.org/wiki/Median

It doesn't seem to 'weight the tails' so much as both of the 'tails' having the same weight.

Posted by: Crissa on September 7, 2006 at 5:35 PM | PERMALINK

The bad news is that I moved to Wisconsin in 1999. The silver lining is that I moved from Michigan, so comparatively, I didn't lose much.

Posted by: Aaron S. Veenstra on September 7, 2006 at 5:37 PM | PERMALINK

One of the greatest mysteries of our time is how the GOP convinced poor, uneducated Southern men to vote for their political party, which hasn't done SHIT to help them in any way.

Posted by: The Conservative Deflator on September 7, 2006 at 5:37 PM | PERMALINK

Kevin,

I'm new here, but a regular at Asymmetrical Information. I'm glad to see you post this. Integrity is a good thing.

Posted by: Randy on September 7, 2006 at 5:37 PM | PERMALINK

We don't want a chart. We want a map. Just like the original.

(*bangs fist on table*)

Posted by: Al on September 7, 2006 at 5:37 PM | PERMALINK

Please don't take these numbers too seriously. Not only should you not give 2 decimal places to the percentages (e.g., 5.43% for Arizona), even the signs of these numbers are unclear, as I note here:
http://www.stat.columbia.edu/~cook/movabletype/archives/2006/09/perils_of_compa.html

Looking at the linked webpage, I see some big standard errors. For example, considering the example of Arkansas, we see $36,700 +/- 1400 (for 2005) and $34,800 +/- 1200 (for 1999). Assuming independent surveys (which maybe isn't right), the difference is $1900 +/- 1800. That is, a difference of 5.4% +/- 5.2%. With numbers like these, it seems a little silly to be looking at individual states.

There is a statistical message here, too, which is that differences are hard to estimate precisely (unless they are studied using a panel design which keeps the data comparable from year to year).

Posted by: Andrew Gelman on September 7, 2006 at 5:38 PM | PERMALINK

Kevin Drum,
Are you one of those people who thinks the President controls the economy with his magical economy buttons?

Posted by: Frank J. on September 7, 2006 at 5:39 PM | PERMALINK

Thank God for Bush's tax cuts. Can you imagine the shape we'd be in if all that money hadn't trickled down??

Posted by: sparky on September 7, 2006 at 5:40 PM | PERMALINK

It doesn't seem to 'weight the tails' so much as both of the 'tails' having the same weight.

The median doesn't care about the tails. It doesn't matter how the income is distributed below the median or above it.

Usually, the median is not too far from the average.

Posted by: Red State Mike on September 7, 2006 at 5:42 PM | PERMALINK

Gives a whole new meaning to "Red State", doesn't it?

Posted by: Mike on September 7, 2006 at 5:43 PM | PERMALINK

Notice how good the most liberal State, The Peoples Republic of Massachusettes is doing. We have gay marriage, the lowest abortion rates, high wages, and soon health care for all.

Hooray for Liberals!

Posted by: AkaDad on September 7, 2006 at 5:48 PM | PERMALINK

So basically, the northeast (except CT), the interior/mountain west, and Nebraska (?!?) all did well, and the southeast/northwest/midwest (esp. upper midwest) got hammered a bit.

Posted by: jfaberuiuc on September 7, 2006 at 5:48 PM | PERMALINK

One of the greatest mysteries of our time is how the GOP convinced poor, uneducated Southern men to vote for their political party, which hasn't done SHIT to help them in any way.

Actually, as Kevin has pointed out in the past, lower income people vote much more Democratic than upper income people in the most Republican states. So, it's not the poor, uneducated that vote GOP. Rather, it's the more well to do white southern males. Blaming the "poor and ignorant" takes heat off the real culprit: upper middle and upper class folks who put the GOP in power.

Posted by: gq on September 7, 2006 at 5:50 PM | PERMALINK

Maybe this explains why the GOP might lose 3 house seats in IN.

Posted by: bakho on September 7, 2006 at 5:52 PM | PERMALINK

Usually, the median is not too far from the average.

By usually, I assume you mean "on average". Now would that be a median or a mean average?

Posted by: Disputo on September 7, 2006 at 5:53 PM | PERMALINK

As do a few others, I applaud your publishing the correction, Kevin.

As Gelman points out, many of the states' numbers in any year include fairly large error bars, so the data for any single state must be carefully examined. The error bar for the country as a whole is quite small, and so probably gives a very good picture of median household income as a whole.

Posted by: Yancey Ward on September 7, 2006 at 5:53 PM | PERMALINK

I don't care how badly the economy sucks, as long as that's the only sucking going on.

Posted by: Red State Voter on September 7, 2006 at 5:53 PM | PERMALINK

btw, great fake GOP. My congrats to the culprit.

Posted by: Disputo on September 7, 2006 at 5:55 PM | PERMALINK

The median doesn't care about the tails. It doesn't matter how the income is distributed below the median or above it. Usually, the median is not too far from the average.Posted by: Red State Mike

Really? Compare the following five incomes and tell me that it doesn't matter.

$10K $20K $150K $3M $15M

Even a math(s) challenged idiot like me knows that $150K is not the average/mean of these five incomes, and that there is a enormous difference between the tails of this curve.

Posted by: JeffII on September 7, 2006 at 6:02 PM | PERMALINK

Usually, the median is not too far from the average.

That depends on the higher order moments of the distribution (e.g. skewness). I believe that is what all the hubub is regarding inequality.

Posted by: gq on September 7, 2006 at 6:12 PM | PERMALINK

Yancey Ward: As Gelman points out, many of the states' numbers in any year include fairly large error bars, so the data for any single state must be carefully examined. The error bar for the country as a whole is quite small, and so probably gives a very good picture of median household income as a whole.

Yup. Gelman's critique of state by state is good, but the national figures are different. He linked to:

http://www.census.gov/hhes/www/income/histinc/h08.html

from which I get CPI-U-RS adjusted numbers of:

2005 $46,326 (std err $155)
1999 $47,671 (std err $223)

which is a 2.8% decline.

Further, the US GDP increased by 14.6% adjusted w/ CPI-U-RS) during that time. Admittedly I also change in number of households to finish the picture, but there's no way it's anything like 17.4%, so the picture is pretty clear.

Where's my money?!

Posted by: alex on September 7, 2006 at 6:16 PM | PERMALINK

well its quite a diffrent to use just 5 salerys in the statistic instead of well say a miljon, so yes median is quite a good way to measure the average income in a state or country if enough salerys is counted in the statistic

Posted by: jethy on September 7, 2006 at 6:16 PM | PERMALINK

JeffII,

I don't think RSM meant what you think he meant. He seemed to only be pointing out that the median number simply doesn't tell you anything about the distribution within either half of the population. In addition, he was simply making the point that the mean income is usually quite close to the median; and your example is an extreme case, not the norm.

Posted by: Yancey Ward on September 7, 2006 at 6:16 PM | PERMALINK

alex,

It is quite possible that the GDP numbers put out by the government are a bit of an illusion, as I think you might agree. In addition, do you work in the areas that have seen the greatest growth total/productivity in the last 6-7 years? If not, then you might not see a proportional increase in your income.

Also, I would encourage you to actually look at some the state year-over-year numbers. There are some real oddities which suggest one use even more caution when drawing conclusions using this data set. However, again, the aggregate US total seems to be a more reliable data set.

Posted by: Yancey Ward on September 7, 2006 at 6:27 PM | PERMALINK

well its quite diffrent to use just 5 salerys in the statistic instead of well say a miljon, so yes median is quite a good way to measure the average income in a state or country if enough salerys is counted in the statistic Posted by: jethy

Not necessarily. You can still have a nasty skew even if you have 400,000 household incomes to account for if those figures above and below the median are different enough.

Posted by: JeffII on September 7, 2006 at 6:31 PM | PERMALINK

Credit to Kevin for the correction. Now, if we could only get back to laying fiber optic cable that lies dark for years, and filling warehouses with routers that nobody buys, then we can relive the magical days of 1999!

Posted by: Will Allen on September 7, 2006 at 6:34 PM | PERMALINK


kevin: those boys down in Texas sure did a whole lot better under Clinton than they have under Bush. If they were smart, they would have voted for Gore and kept the Shrub under wraps in Austin, where he couldn't have done so much damage to their economy.

taking one for gwb is what being a bush defender is all about...

Posted by: thisspaceavailable on September 7, 2006 at 6:36 PM | PERMALINK

What part of "risen" don't you understand?

The part that you don't seem to understand that '-2.8%' has a minus sign, which is the opposite of 'rise'?

But honestly, usually at least you assert you said something silly after you actually said something silly, but there isn't a previous post in this thread?

Posted by: Crissa on September 7, 2006 at 6:38 PM | PERMALINK

blah blah blah. . . Boskin Comission. . . blah blah blah, all economists . . . blah blah blah . . . CPI. . . blah.

blah.

Posted by: Gallons of Poop on September 7, 2006 at 6:41 PM | PERMALINK

Further to Alex's point (this is a point I was trying to make in a comment at Jane Galt's site, but I bollixed up the data):

US population estimate as of 7/1/1999: 272,691,000 (source)
US population estimate as of 7/1/2005: 296,410,404 (source)

Assuming # of households scales with population, increase in # of households = 8.7%

Increase in real GDP per household = (1.146/1.087) = 5.4%

Grossing up 1999 figure to take into account real GDP growth: $47,671 + 5.4% = $50,259

Real-GDP-adjusted comparison of that figure to 2005 figure: -7.8%

Alex, is this the number you were looking for?

(N.b. If I am doing the math right -- a big if -- it would seem to me to be straightforward to add the real GDP adjustment to Kevin's chart.)

Posted by: alkali on September 7, 2006 at 6:41 PM | PERMALINK


:median incomes have dropped even though the economy has been growing


"It's class warfare, all right. And my class is winning." - Warren Buffet

Posted by: thisspaceavailable on September 7, 2006 at 6:42 PM | PERMALINK

I'll say one thing, though: those boys down in Texas sure did a whole lot better under Clinton than they have under Bush. If they were smart, they would have voted for Gore and kept the Shrub under wraps in Austin, where he couldn't have done so much damage to their economy.

Silver Bullet Syndrome?

Posted by: CMoore on September 7, 2006 at 6:43 PM | PERMALINK

I got a $600 check from the Government in 2001, thanks to George W Bush. So I'm good.

Posted by: Jay on September 7, 2006 at 6:44 PM | PERMALINK

great fake Jay!

Posted by: Disputo on September 7, 2006 at 6:45 PM | PERMALINK

God wants poor people to suffer. They're poor, because they are sinners, and they need to be purged of their sin before they are worthy to enter into heaven. That's why God told George W Bush to smite them.

Posted by: ThomasOne on September 7, 2006 at 6:46 PM | PERMALINK

Will,

Re; Dark cable and routers...

You nailed it. I knew more than a few Cisco devotees who mistook a bull market for intelligence.

Posted by: Randy on September 7, 2006 at 6:46 PM | PERMALINK

Good fake GOP.

Posted by: Gallons of Poop on September 7, 2006 at 7:02 PM | PERMALINK

Randy, it's anecdotal, but I'm not even in the industry, and I personally know about a dozen people whose income dropped a ton from the peak of the tech bubble, and still hasn't completely recovered. The U.S. had a giant speculative bubble in the late 90s, which resulted in a much tighter than normal labor market, which really helped raise the median income, and unlike a place to live, not everybody needs a router. Now, for the people who root for political parties, any good thing which happens is obviously attributable to the politicians they favor, and any bad thing is attributable to the politicians they despise. It's largely irrational, but that's the way it goes.

The rooters for both parties engage in this. Thus Jimmy Carter, whom I was certainly no fan of, largely gets the blame for the late 70s economic distress, no matter that he didn't appoint that idiot Arthur Burns as Chairman of the Federal Reserve, which was Nixon's doing, and Carter had the bad luck to be in office when oil prices spiked prior to the OPEC cartel becoming less effective at setting prices.

Give Reagan some credit, as Paul Volcker did, for not trying to pressure the Fed at the depths of the early 80s recession, and for seeing the inherent problems of a top marginal income tax rate of 72%, but anybody who doesn't acknowledge that plummeting oil prices greatly helped economic performance in the 80s, and the President of the United States doesn't have much control over that, just isn't being realistic.

What we see today is just the same sort of debate, only with the parties reversed. People who should know better, and I suspect do actually know better, like Brad Delong, make the argument that raising the top marginal tax rate a few percentage points in 1993 had this gigantic effect on the U.S. economy. Kevin Drum merely plays the part he has chosen, which is to root, root, root, for the home team, which is why I don't frequent this site nearly as much as I once did. Sports websites are much better for that type of discourse, and less pretentious as well.

Posted by: Will Allen on September 7, 2006 at 7:13 PM | PERMALINK

...plummeting oil prices greatly helped economic performance in the 80s, and the President of the United States doesn't have much control over that.....


Sure we do.

All we gotta do is talk tough, invade a country or two on cooked-up intelligence, inflame tensions, and the speculators go nuts. (of course, we tell a few of our closest freinds first).

Posted by: George W Bush on September 7, 2006 at 7:18 PM | PERMALINK

Usually, the median is not too far from the average.

Assuming "average" is meant to be mean, then the median is the same as the mean in a standard normal distribution (aka bell curve).

Posted by: Edo on September 7, 2006 at 7:18 PM | PERMALINK

I lived in Texas during Bush's reign. I know a lot of us were happy to get him out of the Governor's chair - not that Texas has faired well since. He came into the Governorship with a $6 billion surplus and left us with a $4 billion deficit.

Sound familiar?

Posted by: crswa on September 7, 2006 at 7:25 PM | PERMALINK

GOP -
Don't forget, that Money Income also completely ignores the following:

- Impact on oil company profits by military spending.
- Impact on investment income from having taxpayers fund the elementary education of the workforce.
- Impact on investment income from having taxpayers fund the roads, basic R&D, airwaves and airspace regulation, so that businesses have an infrastructure that services their operations.

After taking into account these adjustments, the income picture is very different. People who live off of investment income are subsidized to a very significant extent, most likely far more than what they pay into the system via their Bush-reduced taxes. With Bush's deficit spending, their income increases are most likely orders of magnatude higher than what is shown here - in fact, it's probably impossible to accurately calculate the impact.

Posted by: Osama_Been_Forgotten on September 7, 2006 at 7:47 PM | PERMALINK

Once again, another great fake GOP.

Posted by: Disputo on September 7, 2006 at 8:01 PM | PERMALINK

If deficit spending is to be avoided Osama, I'm sure you'll join be in advocating that three or four hundred billion be cut from the federal budget. I suggest we start with those items which are not the result of Congress exercising a constitutionally enumerated power.

Posted by: Will Allen on September 7, 2006 at 8:03 PM | PERMALINK

Do you have any kind of serious quantitative analysis to support your wild assertions?
Posted by: GOP on September 7, 2006 at 8:05 PM | PERMALINK

Nobody has done one. But I know that Bill Gates is making an assload more money off the PUBLICLY FUNDED Internet (not to mention, the publicly funded application of copyright law) than I am.

Posted by: Osama_Been_Forgotten on September 7, 2006 at 8:37 PM | PERMALINK

According to the table, all states with >10% loss are red states. Hm.

Posted by: PL on September 7, 2006 at 8:39 PM | PERMALINK

Yes, Osama, he is, largely because he has done something much more useful, for literally billions of people, than you have. Get to work, and get to working smarter, as well.

Posted by: Will Allen on September 7, 2006 at 8:41 PM | PERMALINK

Yes, Osama, he is, largely because he has done something much more useful, for literally billions of people, than you have. Get to work, and get to working smarter, as well.
Posted by: Will Allen on September 7, 2006 at 8:41 PM | PERMALINK

Without that public investment, would he have accomplished the same?

Without the access to the PUBLICLY FUNDED computer system he (illegally) used in college to do the only actual computer programming he ever actually did himself (conversion of a BASIC interpreter - which was later sold as a product) - would he have accomplished the same?

Without his mommy's inside contacts at IBM, would he have been able to sell IBM on Microsoft's (at that time non-existent) Operating System?

Posted by: Osama_Been_Forgotten on September 7, 2006 at 8:51 PM | PERMALINK

Ah, Kevin.

LOL! You lost all credibility, Kevin! You're backpedaling already.

Check out Stephen Rose's article in the American Prosepect. He's a liberal economist, but even he explodes the idea of stagnant wages.

This economy is doing great, and you liberals just can't stand it!

LOL!

Posted by: egbert on September 7, 2006 at 8:58 PM | PERMALINK

Osama, millions and millions of people had access to a publicly funded computer system. Thousands of people, if not hundreds of thousands of people, had contacts within IBM. He is the one who decided to buy somebody else's code at a mutually agreed upon price, and convince IBM to pay his company a sum for the use of that code in every PC they sold. If people want sums of money similar to that of people who found companies, which end up doing transactions with billions of people, then they best figure out a way for convincing billions of people to do transactions with them. Get to work.

If somebody observed Bill Gates committing a crime, then they should have contacted a prosecutor.

Posted by: Will Allen on September 7, 2006 at 9:04 PM | PERMALINK

Illinois -10.8%, Indiana -11.3%, Michigan -14.9%, Minnesota -1.6% and Wisconsin -16.5%.

Connecticut -4.1%, Massachusetts +8.67%, New Jersey +8.77% & New York +.071%

California +1.27%

Coming from Chicago I feel safe in saying the "Internet" bubble wasn't behind these numbers. There isn't a region that took it on the chin more than the midwest.

Posted by: sauce on September 7, 2006 at 9:43 PM | PERMALINK

Sauce, the state by state numbers are extremely probelmatic. Read the post.

Posted by: Will Allen on September 7, 2006 at 9:47 PM | PERMALINK

Conservative Deflator: The Southern White Men you mention are very open to voting against their own (economic!) self-interest; they are simply told in church that a) poverty is its own reward, and b) gaysgodandguns are much more important.

Do you always vote in your own self-interest, or do you vote altruistically at least part of the time? I do. Same for them; except with authoritarian personalities it is much easier to present fiats from On High that will convince them.

Posted by: Mellifluous on September 7, 2006 at 10:48 PM | PERMALINK

"Thank God for Bush's tax cuts. Can you imagine the shape we'd be in if all that money hadn't trickled down??"

Funny thing, that...

I now work for a company that I left pre-9/11 (went to a dot.com, let's not talk about bad life choices and bad timing). Anyway, left during Clinton era, returned after the famed Bush tax cut. I made (and make) well over 2X the median, I have a vague memory of some flimsy $300 check I rec'd compliments of that "tax cut"... I'd think that "tax cut" actually affected me if I hadn't been able to compare take home pay for X dollars pre Bush and post Bush...

I'm so sorry honey, but even at well over 2X the median, it ain't an improvement. Please spare me another round of that "trickle down effect". I'm pretty sure I can't afford it until I make 10X the median...

Oh, and the overall job security for middle management? Gosh, I can't tell you how much I LOVE the fact it is no longer an employee's market. That's a real power rush, let me tell you... Why, I am so damn grateful that the day is over when a talented worker was in a bidding war with 3 hot companies for that not inconsiderable expertise. Screw innovation. Make 'em grateful for a paychek. Amerika wil B king agin. I'm shur of it. We kontrol inovashun in this market. Employerz rule!!!

Posted by: DK on September 7, 2006 at 11:10 PM | PERMALINK
One of the greatest mysteries of our time is how the GOP convinced poor, uneducated Southern men to vote for their political party. The Conservative Deflator at 5:37 PM
Check out What's the Matter With Kansas for details. They played to White Anger using a steady diet of talk radio and misinformation to blame Democrats, minorities and unions for their plight. Orwellianism is an old technique with the RNC.
Usually, the median is not too far from the average. Red State Mike at 5:42 PM
Here you can see that the median is less than the average wage. Here is data on median wage by President. Posted by: Mike on September 7, 2006 at 11:26 PM | PERMALINK

The problem with comparing income for "households" is that "households" is a function of income. As incomes rise the number of households rise, because it takes fewer people to pay the rent and utilities. The increased number of households drives down the average income-per-household, which is why household size must always be included in the analysis. (Nothing on the websites linked to here mention the size of the average households in the surveys.)

When incomes are low people are more likely to get roommates or live with their parents, and when times are good they move out. Two people each making $25,000 a year, for example, may have to share an apartment, but may be able to get their own place when they make $40k. Even though both of them are much better off now that they're at $40k instead of $25k, the median household income for their community has gone from $50 down to $40k.

The number that matters is per capita income.

Posted by: Matt Evans on September 7, 2006 at 11:50 PM | PERMALINK

Yes, yes, the people who do not vote the same way as I are obviously intellectually and morally deficient dupes who are easily manipulated.

Posted by: Will Allen on September 8, 2006 at 12:12 AM | PERMALINK

The median income in Utah is greater than that of California or New York?

Smells fishy to me. You ever try to work for a living in Utah?

Posted by: kinski on September 8, 2006 at 1:12 AM | PERMALINK

Kevin, it's not just Texas.

While there are some exceptions, read the whole chart. Compare red and blue states.

Who came out ahead in the last six years?

Posted by: Socratic Gadfly on September 8, 2006 at 2:36 AM | PERMALINK

Massachusetts up 8.67% and Mississippi down 13.6%.

Massachusetts real per capita gdp is 126% of the national average and in Mississippi it is 63% of
the national average.

Yet the Republicans keep trying to tell up that if we were less like Massachusetts and more like Mississippi we would all be better off.

That does not seem like a self evident argument to me, why does it make so much sense to you, GOP?

Posted by: spencer on September 8, 2006 at 9:29 AM | PERMALINK

Let's say we compare numbers over the past decade to get rid of the internet bubble which artificially inflated the 1999 or 2000 numbers. How's the comparison then, Kevin Drum of much integrity for admitting the obvious?

And please explain why the only bubble about which you claim to care is the housing bubble. Why don't you care about the internet bubble?

The dishonesty now fails to amaze...

Posted by: Birkel on September 8, 2006 at 12:47 PM | PERMALINK

kinski,

That points to something I mentioned on the first thread. (You know, the one where Kevin Drum credulously believed the FreePress.)

You see, in Utah the numbers are inflated because we're dealing here with the median FAMILY. And families in Utah tend to be larger than in other places. Families of size 4 have higher average earnings than families of 3 or 5. And the declines continue in both directions.

So basically these numbers are crap unless you hold several variables constant. But we can't expect Mr. Drum to run the regressions to augment his point.

Posted by: Birkel on September 8, 2006 at 12:52 PM | PERMALINK

the drop wasn't quite as bad as it looked

hunh? MI going from -12% to -15% does not look like "not quite as bad" to me

Posted by: cp1919 on September 8, 2006 at 12:57 PM | PERMALINK

GOP-
Oh, no, not this bullshit again...

Have you figured out the term "correlation" yet?

Median income statistics actually understate the inequality in this nation. Look at the tails and its even worse.

You always have a better measure, don't you? You seem to especially like measures that have nothing to do with the issue at hand.

It doesn't matter what percentage of income is going to "wages and salaries". This term covers all kinds of people. Even those making $500,000 a year may be getting this money as a "salary". In fact, up until the very top of the income ladder, the vast majority of income falls under this category. So that says nothing about what the average worker is experiencing.

If "median money income" is a bad measure for not inlcuding other "non-cash" income (as you squawked endlessly about a week ago), then why are you now using "wages and salaries" (an even more restrictive metric) to prove your point?

God, you make no sense.

And I don't understand what your point is with this "middle quintile" thing, either. The chart Kevin posted shows a stagnating median income. The "middle quintile" you post shows a stagnating middle quintile, although not quite as bad as the median. Well, perhaps the 60-percenters have improved a little bit more than the 40-percenters and/or median earners have declined. But I don't think this is a path you want to go down too far.

Posted by: kokblok on September 8, 2006 at 5:20 PM | PERMALINK

Birkel--
I love it when people arbitrarily decide to delete certain data points because they aren't "real". Like the "internet bubble". No one even really know why this happened, but because it happened during Clinton's term, some morons on the right will point to it to explain a shitty situation five years later, while a slightly smaller number of Democrat morons will defend it as an example of Clinton's economic genius. Both points of view are mistaken.

Whatever happened to the fucking "ownership society", dude? We had GOP here scrounging for welfare dollars to prove his point that the average joe ain't so bad off, and now we got Birkel getting all sour-pussed over the "internet bubble", which may or may not have been the driving force behind the decrease in the median income over the past decade. The internet bubble certainly did cut into stock profits and may have temporarily slowed hiring in a relatively small industry, but most "median-type" people weren't really very much invested in tech stocks, despite what you might have read in Fast Company.

But the larger issue is that it doesn't really matter even if the internet bubble did crash. The 20 and 30 year figures don't look good, either, especially adjusted for inflation and (more importantly) hours worked.

The difference between now and 1975? Much better entertainment options (including you foodies here!), slightly more working hours, and much less job security. Fun all around.

Posted by: kokblok on September 8, 2006 at 5:36 PM | PERMALINK

TODAY'S PIG IS TOMORROW'S BACON (a Labor Day recipe)


By Greg Palast
September, 3 2006

Some years from now, in an economic refugee relocation "Enterprise Zone," your kids will ask you, "What did you do in the Class War, Daddy?"

The trick of class war is not to let the victims know they're under attack. That's how, little by little, the owners of the planet take away what little we have.

This week, Dupont, the chemical giant, slashed employee pension benefits by two-thirds. Furthermore, new Dupont workers won't get a guaranteed pension at all -- and no health care after retirement. It's part of Dupont's new "Die Young" program, I hear. Dupont is not in financial straits. Rather, the slash attack on its workers' pensions was aimed at adding a crucial three cents a share to company earnings, from $3.11 per share to $3.14.

So Happy Labor Day.

And this week, the government made it official: For the first time since the Labor Department began measuring how the American pie is sliced, those in the top fifth of the wealth scale are now gobbling up over half (50.4%) of our nation's annual income.

So Happy Labor Day.

We don't even get to lick the plates. While 15.9% of us don't have health insurance (a record, Mr. President!), even those of us who have it, don't have it: we're spending 36% more per family out of pocket on medical costs since the new regime took power in Washington. If you've actually tried to collect from your insurance company, you know what I mean.

So Happy Labor Day.

But if you think I have nothing nice to say about George W. Bush, let me report that the USA now has more millionaires than ever -- 7.4 million! And over the past decade, the number of billionaires has more than tripled, 341 of them!

If that doesn't make you feel like you're missing out, this should: You, Mr. Median, are earning, after inflation, a little less than you earned when Richard Nixon reigned. Median household income -- and most of us are "median" -- is down. Way down.

Since the Bush Putsch in 2000, median income has fallen 5.9%.

Mr. Bush and friends are offering us an "ownership" society. But he didn't mention who already owns it. The richest fifth of America owns 83% of all shares in the stock market. But that's a bit misleading because most of that, 53% of all the stock, is owned by just one percent of American households.

And what does the Wealthy One Percent want? Answer: more wealth. Where will they get it? As with a tube of toothpaste, they're squeezing it from the bottom. Median paychecks have gone down by 5.9% during the current regime, but Americans in the bottom fifth have seen their incomes sliced by 20%.

At the other end, CEO pay at the Fortune 500 has bloated by 51% during the first four years of the Bush regime to an average of $8.1 million per annum.

So who's winning? It's a crude indicator, but let's take a peek at the Class War body count.

When Reagan took power in 1980, the One Percent possessed 33% of America's wealth as measured by capital income. By 2006, the One Percent has swallowed over half of all America's assets, from sea to shining sea. One hundred fifty million Americans altogether own less than 3% of all private assets.

Yes, American middle-class house values are up, but we're blowing that gain to stay alive. Edward Wolff, the New York University expert on income, explained to me that, "The middle class is mortgaging itself to death." As a result of mortgaging our new equity, 60% of all households have seen a decline in net worth.

Is America getting poorer? No, just its people, We the Median. In fact, we are producing an astonishing amount of new wealth in the USA. We are a lean, mean production machine. Output per worker in BushAmerica zoomed by 15% over four years through 2004. Problem is, although worker productivity keeps rising, the producers are getting less and less of it. (Nominal wages over the same time period dropped 4%, for a total wage loss of 19%. In other words a person who received $100.00/Unit in 2000, made $81.00/Unit in 2004)

The gap between what we produce and what we get is widening like an alligator's jaw. The more you work, the less you get. It used to be that as the economic pie got bigger, everyone's slice got bigger too. No more.

The One Percent have swallowed your share before you can get your fork in.

The loot Dupont sucked from its employees' retirement funds will be put to good use. It will more than cover the cost of the company directors' decision to hike the pension set aside for CEO Charles Holliday to $2.1 million a year. And that's fair, I suppose: Holliday's a winning general in the class war. And shouldn't the winners of war get the spoils?

Of course, there are killjoys who cling to that Calvinist-Marxist belief that a system forever fattening the richest cannot continue without end. Professor Michael Zweig, Director of the State University of New York's Center for Study of Working Class Life, put it in culinary terms: "Today's pig is tomorrow's bacon."

Oh, and egbert the economy is doing as great as it was in September 1929.

The GDP has increased since 1999. (GOP) So what? The GDP is worthless. For example:
"the welfare of a nation can scarcely be inferred from a measure of national income" and
"distinctions must be kept in mind between quantity and quality of growth, between costs and returns, and between the short and long run. Goals for 'more' growth should specify more growth and what and for what."
Simon Kuznets the inventor of the GDP. For a further example $351,750,000,000 of the GDP is wasted energy.

"Yes, yes, the people who do not vote the same way as I are obviously intellectually and morally deficient dupes who are easily manipulated." Will Allen,
Well lets see, they voted agaisnt their self interests soley because they wanted the party they voted for to oppress people who aren't like them (white men). So yeah they are morally deficient dupes who are easily manipulated.

Posted by: 00666 on September 9, 2006 at 3:12 PM | PERMALINK

Sorry that should be "So yeah they are intellectually and morally deficient dupes who are easily manipulated."

Posted by: 00666 on September 9, 2006 at 3:15 PM | PERMALINK

Sorry that should be "So yeah they are intellectually and morally deficient dupes who are easily manipulated."

Posted by: 00666 on September 9, 2006 at 5:20 PM | PERMALINK




 

 

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