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US Land of Opportunity

  1. profile image0
    JaxsonRaineposted 5 years ago

    http://www.treasury.gov/resource-center … revise.pdf

    Over 50% of all Americans who were in the bottom 20% of earners moved up to a higher bracket between 1996 and 2005.(Table 1 in link)

    50% of Americans in the second quintile moved up to a higher bracket.

    30% of Americans in the middle quintile moved up to a higher bracket.

    In addition, 50% of Americans in the bottom 20% saw an increase of pay of over 100%, with the mean income increase being 232%.

    The median wage increase of Americans, adjusted for inflation over this period, was 24%. This is contradictory to studies that only look at income changes per bracket over time. The reason is that this study by the treasure compares individuals to themselves. The studies that only look at groups(with different people in the group every year) have the problem of having to include a constant influx of new illegal immigrants who are generally paid low wages.

    The US is still a land of opportunity, and wages have increased, even with the decline-of-unions 'problem'.

    1. John Holden profile image60
      John Holdenposted 5 years ago in reply to this

      You do realise of course that for everyone who moved up, one moved down!
      Think about it, if one moves away from the bottom 20% they must be replaced by somebody else or the bottom 20% is no longer the bottom 20%.

      1. profile image0
        JaxsonRaineposted 5 years ago in reply to this

        No, that's not what is happening.

        New influx into the workforce replaces the bottom rung, for the most part.

        These are largely consisting of teens and illegal immigrants.

        If you care to read the actual information I provide, the report shows how many move down as well.

        17% of the second quintile moved down, 7% of the middle, 4% of the fourth, and 2.5 % of the highest. Of existing workers only 30% moved down to bottom quintile.

        In total, 27% of the new bottom quintile consists of people who are new to the workforce.

        1. John Holden profile image60
          John Holdenposted 5 years ago in reply to this

          Quite, upwards mobility is illusory isn't it? When the bottom 20% are replaced by 27% of new entrants to the workforce, then the rest are bound to move up aren't they?

          1. profile image0
            JaxsonRaineposted 5 years ago in reply to this

            You just aren't listening.

            The bottom 20%'s median income increased by almost 100%. It's not that they are getting pushed up due to averages. They are actually moving up.

            Or, is doubling your income(adjusted for inflation) not 'moving up'?

            1. lovemychris profile image80
              lovemychrisposted 5 years ago in reply to this

              Not if it can't keep up with the cost of living....

              You can honestly say that people in the 60's made less, but had more!

              1. profile image0
                JaxsonRaineposted 5 years ago in reply to this

                That 100% increase is adjusted for inflation, which basically mirrors cost of living.

                So yes, it's doubling your income in relation to cost of living.

                Is that an increase, or not?

            2. John Holden profile image60
              John Holdenposted 5 years ago in reply to this

              Yes, there are lies, then damned lies but then come statistics!

              1. profile image0
                JaxsonRaineposted 5 years ago in reply to this

                If someone doubles their income in a decade, adjusted for inflation, are they moving up or not?

                It's a simple question.

                1. John Holden profile image60
                  John Holdenposted 5 years ago in reply to this

                  If the cost of living more than doubles then no, they are not moving up.

                  1. lovemychris profile image80
                    lovemychrisposted 5 years ago in reply to this

                    That's right....and the cost of living has way more than doubled.

                    A study was done here in Mass years ago. Their analysis said it would take $14.00 an hr JUST to break even.

                    Minimum wage here in 2012 is $7.25 an hr.

                  2. profile image0
                    JaxsonRaineposted 5 years ago in reply to this

                    How many times do I have to say this?



                    Cost of living and inflation have moved up almost identically.

                    I would go get the exact figures, but I'm sure you would just ignore them like any other figures I present

    2. Josak profile image61
      Josakposted 5 years ago in reply to this

      Few issues with that

      #1 how exactly is the Treasury department or any other income analysis group measuring the income of illegals? The very definition of paying an illegal is that it's under the table and cannot be found in any official transactions. So how exactly could low paid illegals be affecting the numbers.

      #2 How exactly are the results of this study surprising. Yes of course people who have been in the workforce for ten years generally make more than when they made when they started out as teenagers but that does not mean that because this is true things are going well, it specifically means the youth is getting screwed up.

      #3 The study picked a very opportune time in the US economy when it was in an artificial boom or bubble which popped just two years or less after the study ended.

      1. profile image0
        JaxsonRaineposted 5 years ago in reply to this

        I was under the impression that those figures are estimated. Regardless, this study shows that it isn't the same workers who aren't increasing wages, rather it is new workers who come into the workforce who pick up the low wages.

        Not really. Minimum wage, or near to it, is still good enough for a student to put himself through school.

        This study shows that wages for experienced workers are actually increasing over time, not vice versa. How else could all income groups have a median increase in income?(to be fair, the top 1% always has a median decrease in income).

        Actually, this study was done a decade previously, and another one should be coming in a few more years. The report compares 1996-2005 to the 1986-1995 period, and the story is the same. Wages are increasing with time, adjusted for inflation.

    3. Josak profile image61
      Josakposted 5 years ago in reply to this

      This whole study is nigh on irrelevant to asses whether the situation of he American people is improving, we expect that people will make more money as they get more experience and promotions etc. in the workplace, this study shows that is true, excellent.

      What it does not show is that things are getting worse for people in general including those people who entered the workforce in the ten years that the study was running. Forgetting about illegals because I don't see how they could be getting into the numbers anyway. According to the US census Bureau average household income from 1993 to 2003 (similar timing) increased by only $4,143 that's before inflation or increase of CPI so really the average household income decreased even during the boom.

      1. profile image0
        JaxsonRaineposted 5 years ago in reply to this

        Yet, before the next study is finished, you know the results? Unfortunately, things will be skewed by the recession, but why do you think a documented 20-year trend of wage increases would suddenly stop?



        Which is the point of pointing out this study. Average Household Income doesn't tell you what happens to people on an individual level. The claim is that people don't have the opportunity to move up anymore, that they are stuck in the disappearing middle class and lower class. But in reality, people have tremendous opportunities to increase their income and wealth.

        Besides, the Census Bureau shows the following, inflation-adjusted increases from 1996-2005.

        Bottom 20% - $2,600
        Second 20% - $7,000
        Middle 20% - $11,700
        Fourth 20% - $20,400
        Top 20% - $46,000

        http://www.census.gov/hhes/www/income/d … household/

        Table H-3.

        So even adjusting for inflation, you can see mean increases among each group.

        This means that each group's income is increasing, and individuals within the lower two brackets have a high rate of upward mobility.

        So, tell me, where is the problem?

        1. Josak profile image61
          Josakposted 5 years ago in reply to this

          The problem is clear, yes as we all know people make more money as they gain seniority experience etc, nothing surprising about it but the falling average wages show very clearly that the average trend is downwards and the situation of the average America is getting worse and worse.

          1. profile image0
            JaxsonRaineposted 5 years ago in reply to this

            Actually, I just showed that over the time period of the report, all quintiles enjoyed increasing wages, adjusted for inflation.

            So where are you getting your downward trend?

            Let's look at average wages over the years 2008-2009-2010 compared to 1998-1999-2000

            1st 20  2nd 20  3rd 20  4th 20  5th 20
            1,649     4,805     9,008     16,051     35,495

            So, every group looks to be going up. Who is going down?

  2. lovemychris profile image80
    lovemychrisposted 5 years ago

    My boss is starting people at 1 dollar an hour less than last year....it's a thing the owners are doing now.

    Guess they can claim hardship--and pay less.

    Meanwhile, Exxon/Mobil made more than the GDP of Bahrain.

    "how's the tanker, Condi??" wink

  3. lovemychris profile image80
    lovemychrisposted 5 years ago

    Interesting, given the discussion:

    Fox News: "poor are getting richer"

    http://mediamatters.org/research/201205250018

  4. lovemychris profile image80
    lovemychrisposted 5 years ago

    "While it is true that the poor make 17% more than they did in the 60's, "Stimpy" deliberately ignores the fact that the cost of living has risen by over 25% in the same amount of time"

    BINGO!!

    1. John Holden profile image60
      John Holdenposted 5 years ago in reply to this

      Only 25%!

      Blimey the cost of living in the UK has risen by far more than that since the sixties and far more than wages have as well.

    2. profile image0
      JaxsonRaineposted 5 years ago in reply to this

      LMC, 'the poor' is talking about an ever-changing group of people.

      The average person in the bottom 20% of Americans in 1996 doubled his income by 2005.

      We're talking about upward mobility. The average poor person in the 60s would have moved out of the 'poor' group by the 70s.

  5. lovemychris profile image80
    lovemychrisposted 5 years ago

    Even I can remember when $50.00 would buy a lot of groceries...

  6. profile image0
    JaxsonRaineposted 5 years ago

    Here guys. If someone made $20,000 in 1996, then increased that by 100% by 2005, adjusted for inflation, that means they made $49,679 in 2005.

    CPI(cost of living factor) in 1996 was 1.569.

    CPI in 2005 was 1.953

    So, the 'real' value of this person's income, expressed in 1983 dollars, would be the following:

    1996 - 20,000/1.569 = $12,746
    2005 - 49,679/1.953 = $25,437

    These numbers account for inflation and cost of living. That was the kind of change that the bottom 20% averaged from 1996-2005.

    1. American View profile image61
      American Viewposted 5 years ago in reply to this

      Jaxson,

      I fully understand the numbers and what you try to say. Does basically the numbers and formulas the politicians have been using. But the numbers do not reflect reality. The cost of products have far outpaced the rise of salaries. While it is true that low income earners have had you just percentage of increase in salaries, everything is relevant. For example if you are making $20,000 and salaries were raised 50% you would now be making $30,000. If you are making $1 million and salaries were raised 50% we now be making $1,500,000. One person is making $10,000 more, the other is making $500,000 more, huge difference yet in percentages it's the same.

      But if you look at the cost of products from say the 1980s to now you would find that the cheapest of products prices have gone up a minimum 500%. So in 1980 with your $20,000 salary you can purchase a car for $5000, but today with your $30,000 salary the same car now costs $25,000. Making that car payment today is now much harder
      .
      I wrote a whole article on this and your are more than welcome to read it.

      1. profile image0
        JaxsonRaineposted 5 years ago in reply to this

        I have said this many, many times between these two threads. These figures are adjusted for inflation.

        I'll repost this:

  7. profile image0
    JaxsonRaineposted 5 years ago

    From 1980 to now, the cost of living has increased ~270%.

    ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt

 
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