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Lifetime Earnings in the United States over Six Decades
- seafoam 5y agohttps://fred.stlouisfed.org/series/LNS11300001 https://fred.stlouisfed.org/series/LNS11300001
- adpirz 5y agohttps://fred.stlouisfed.org/series/LNS11300002 https://fred.stlouisfed.org/series/LNS11300002
- spicyusername 5y agoIt's great to see the gains women are making.
- gher-shyu3i 5y agoIt just means it's now harder for families to make it on a single income that used to be the responsibility of the father. This drives wages lower as we're seeing and makes it harder on everyone.
- imtringued 5y agoLogically speaking, it doesn't make any sense. It should be easier to start families because families earn twice as much. Practically speaking, people will spend their money on limited resources like land and basically lose out on most of the gains. That's the primary way "housing as an investment" earns money, by extorting the wages of future workers. If there are more workers (women and men) then you get to earn even more despite doing absolutely nothing to deserve the money.
- germinalphrase 5y agoExcept that they’re not earning twice as much. This also fails to consider the uncounted domestic labor that previously was completed by a stay at home spouse, but still needs to be completed/paid for.
- lotsofpulp 5y agoStarting families was never limited by women not working. If anything, women not working (outside the home) makes it easiest to start families, since adult supervision’s time is the most expensive part of raising young children, and if one adult in a family is not working then they have no opportunity cost for raising the kids.
- gizmo686 5y agoPart of the story is that doubling the size of the workforce does depress wages; and it does cause inflation on assets that do not see an increase in production with an increase in workforce size (such as land). The other issue is that "women entering the workforce" is not really an accurate description of what is going on. Women have been entering the formal workforce. This means that family now need to pay for what was once done for free by the wife. The most significant expense here is childcare (the cost of which is often cited as a major barrier to women "entering" the workforce); however there are all sorts of little expenses that could be avoid at the cost of additional time, so not heaving an unpaid homemaker increases your living costs in a bunch of little ways.
- dukeofdoom 5y agoOwning property, like rental property is not free money. Loan interest, property taxes, landscaping, and cleaning up after tenants. The maintenance expenses are constant. Due to the number and the declining standards of very many things put into houses now. Fixing things approaches a part time job.
- gher-shyu3i 5y ago> It should be easier to start families because families earn twice as much. In practice, it doesn't translate to immediately doubling the effective income. You hear many accounts of people whom their father was working a single job in a gas station, yet they afforded a house and car and other amenities. Today that doesn't happen anymore. Furthermore, the children will suffer when both parents are working.
- acuozzo 5y ago> It should be easier to start families because families earn twice as much. This is only true for DINKs, families with access to free childcare, or families in which both parents work schedules that can be arranged to make childcare possible, such as having non-overlapping workdays. The cost of child care where I live in MD is slightly greater than my wife's maximum post-tax earning potential, so we've chosen for her to stay home with the children. Moving back near family in NJ for the free childcare would reduce my income enough to negate any extra earned income from my wife working.
- lotsofpulp 5y agoIt also means women have more independence and freedom.
- gher-shyu3i 5y agoNot necessarily, is selling your body on prostitution websites more freedom? I think not. It's known what women face in a secular captialism-first economy.
- lotsofpulp 5y agoYes, having the freedom to sell your body on prostitution websites is more freedom. I do not know what the rest of your comment means, but mine is pretty clear that not having to rely on a man to earn money and then give it to them is more independence and freedom than depending on a man to give them money. PS Isn't it funny that a women "selling her body" on prostitution websites is bad, but a man (or woman) selling their body doing back breaking work for menial wages is OK?
- gher-shyu3i 5y agoOf course selling one's body doing prostitution is bad, I don't know how that's even an arguing point. Not all "freedom" is good, some of it is destructive, like the example above. > but a man (or woman) selling their body doing back breaking work for menial wages is OK? Straw man fallacy.
- lotsofpulp 5y agoHow can it be a straw man when it’s not even refuting it? I addressed your argument directly by showing it is more independence and freedom. The post script is a humorous observation of what “selling your body” is used to refer to. https://en.wikipedia.org/wiki/Straw_man https://en.wikipedia.org/wiki/Straw_man
- gher-shyu3i 5y ago
- spywaregorilla 5y agoIt is harder to support families because the required wages have increased. It's fully possible we'd be in the same situation if women didn't see those relative gains.
- rileymat2 5y agoCan someone explain the y-axis for lifetime earnings? 45k seems low for lifetime earnings in 2013 dollars.
- AlexB138 5y agoFrom the article: > Note: Each observation represents the median earnings of men of a particular age in a particular year. For example, the 1957 cohort is represented by an Age 25 observation in 1957
- rileymat2 5y agoThanks, that’s what I missed. Was not clear to me it was for that year. For chart 1 “ Each marker/observation represents the median lifetime earnings of a cohort that turned age 25 (entered the labor market) in the year indicated on the x-axis. Values are displayed in thousands of 2013 US dollars. Earnings are deflated by the Personal Consumption Expenditure (PCE) deflator.” Leaves that particular part out.
- grumple 5y agoChart 1 doesn't make sense to me. It seems everything else is about the median YEARLY earnings, and the word lifetime in the context of this doesn't make sense. Maybe it means the median yearly wage for each individual? Like if I worked exactly 3 years in my entire life and I made 25k at 25, 40k at 40, 60k at 60, my median earnings would be 40k. That's the only way I can make sense of that.
- prennert 5y agoI was hoping to see how much people earn in their lifetime. And how that changed over time. I was wondering the other day other how many years are high earners are actually earning a very high income. In-equality wise it is very different if people in the 2 percentile of income stay there for a decade or more or if they are in that income bracket only for a few years while doing a specific job and drop down to lower income again when they change their job. Assuming for instance an average work-life of 40 years (25-65), and anyone in the 2 percentile income bracket stays there only for 5 years, that means 16% of the population will be high-income at some point in their life (and stay there for 5 years), or up to 32% of households. This means that in this scenario up to a third of the population (maybe more if kids are taken into account?) would benefit sooner or later from an exceptional boost in disposable income. That picture would be very different if high-earners stayed high earners for a longer time as they would truly form an elite that is clearly separated in income wealth from the rest of the population. Obviously what you do with this income determines a lot about your actual wealth. So this is a different question than how absolute wealth is distributed. I would be very much interested in pointers towards data and/or studies about how runaway elite incomes actually are in different parts of the world.
- Retric 5y agoHigh income brackets are vastly higher incomes so people at low incomes (~30k) rarely reach that level. In 2020, the top 1% was $531,020.00 / year, that’s rare, 2% is $387,116.00 again a huge jump for most people. However, some people very briefly enter high income status via a windfall. But, even here it’s mostly people with high incomes rather than poor people winning the lottery etc.
- dlp211 5y agoThat's household income. Top 1% individual income starts at $361k. To be in the top 10%, you need to make more than $125k.
- brk 5y agoI think that most high income earners stay at that stage for the majority of their career after reaching that level. While I know there are exceptions and odd examples, IMO people in general have little desire to take a large pay cut, so if you manage to get yourself to the point you are in the top 2% of earners, why would you step back?
- jhgb 5y agoIs there any explanation for why in Figure 4, the aggregate line is so much higher than the two lines that are supposed to the same thing for the two groups that the population described by the aggregate line neatly partitions into? EDIT: I may have answered that to myself by drawing some income distribution curves. I guess it's a plausible outcome if the P90 for "all" is closer to the male P90 while the P10 is closer to the female P10 with the two curves being significantly different (which is increasingly the case as one goes to the past).
- spywaregorilla 5y agoYep. If women are [10,20,30,40,50] and men are [100,200,300,400,500] then p90/p10 is the same for each, but combined it's 500/10. Terribly off numbers for illustrative purposes of course.
- ArkanExplorer 5y agoIts interesting that earnings and inequality worsen around 1965/1970, which is also the year that immigration into the USA began a rapid increase: https://www.migrationpolicy.org/programs/data-hub/charts/immigrant-population-over-time https://www.migrationpolicy.org/programs/data-hub/charts/imm... At the same time as the Immigration and Nationality Act of 1965 which essentially opened up immigration to anyone in the world instead of just people from North Western Europe. https://en.wikipedia.org/wiki/Immigration_and_Nationality_Act_of_1965 https://en.wikipedia.org/wiki/Immigration_and_Nationality_Ac...
- elliekelly 5y agoGiven that immigrants who aren’t from north western Europe are often subject to discrimination and treated as second-class citizens it should come as little surprise that inequality increased as immigrants became more diverse.
- cmrdporcupine 5y agoThe chart you linked to doesn't support your own point. Immigrants as a percentage of population is no higher after the rise in absolute number of immigrants shown there. In fact for the first few years there, it's signifcantly lower. What I get from that chart is that as a proportion of the population immigration has been relatively constant except for the baby boom period, where local demographics were briefly enough to supply the labour force. As for your second link, I have no idea what you're trying to get at, but it frankly sounds a bit racist. Given that for the last part of the 19th century and the first part of the 20th century immigrants could basically get off a boat in New York and enter the US or Canada without much restriction and get citizenship quite easily compared to now, this is beyond silly. Literal boatloads of eastern Europeans and Italians (not "north western Europe") arrived in the first part of the 20th century. And built the backbone of the US and Canadian economies in that period. Finally, northwestern Europeans stopped wanting to _come_ to North America after the early 60s. There was no need for them to emmigrate. My own father's economic fortunes would have been far better off if he'd just stayed in Germany.
- boringg 5y agoWhy would you use the median - plot a boxplot in here and get some good data visualizations. Median barely tells the story. Poor data visualization is such a pet peeve...especially for a university.
- spywaregorilla 5y agoA boxplot conveys more information about the distribution, but makes it harder to tell a concise story about comparing trends between multiple groups over time. Both are appropriate here.
- boringg 5y agoTrue but you could put a boxplot for each time period and a line going through. I just feel like a lot of info was left out.
- frankbreetz 5y agoWho knew such an admiral goal: "having women entering the workforce en mass" would have such a depressing result: "it is now much more difficult for a family to survive on one income" What is the solution? Obviously, we would like to keep moving forward and allow anyone that is willing and able to do the job they want, but if anyone would like to be with their children, or take time off while a spouse works, that should also be able to be done. The solution to me seems to forcing the gains in production and efficiency to the people. With what mechanism I am not sure, but a society that increases output while the lifestyle of average people decreases is not a successful society. Obviously, companies are not going to do this on their own, so I think this should be governments main role, to ensure companies act in the people's best interest and fill in the gaps where companies fail or are not efficient. It seems to me the increases of efficiency should allow all people a minimum quality life(i.e. a place to live, something to eat, a doctor, education), no matter their contribution to society. I think this can turn people that are a strain on the system to contributors (and if not, we should still do it. What is the point of society, if not to take care of people and give them a better life?)
- bhupy 5y agoAn idea that I really like is to do what countries like Singapore and the Scandinavian countries do: create a public sovereign wealth fund, and then do what States like Alaska do: divert the dividends from the fund directly to the people. Alaska's Permanent Fund is only allowed to invest in Alaskan companies and is "only" $75B in size (https://www.alaskajournal.com/2021-02-24/fund-continues-bull-rush-nears-75b-value https://www.alaskajournal.com/2021-02-24/fund-continues-bull...), and even then an Alaskan resident would have received $2,000 in 2015 simply for existing: https://pfd.alaska.gov/Division-Info/Summary-of-Applications-and-Payments https://pfd.alaska.gov/Division-Info/Summary-of-Applications... By scaling up the size and scope of the fund, you can conceivably get to a place where the dividend can work out to $10k+ per person per year.
- dv_dt 5y agoI think one way to populate the fund is require the assets purchased by the Fed during bailouts to be held by the sovereign wealth fund.
- sbagel 5y agoStudying income inequality in the US by gender and age group while completely ignoring race feels wrong when it's such an impactful variable, especially considering it's getting worse over time. In 2016, the median net worth of non-Hispanic White households was $143,600. The median net worth of Black households was $12,920. Between 1983 and 2013, White households saw their wealth increased by 14%. But during the same period, Black household wealth declined 75%. Median Hispanic household wealth declined 50%. https://inequality.org/facts/racial-inequality/#racial-income-inequality https://inequality.org/facts/racial-inequality/#racial-incom... https://www.federalreserve.gov/econres/notes/feds-notes/disparities-in-wealth-by-race-and-ethnicity-in-the-2019-survey-of-consumer-finances-20200928.htm https://www.federalreserve.gov/econres/notes/feds-notes/disp...
- dfilppi 5y agoYou switched from income to wealth
- temp8964 5y agoThere is a huge age gap between Whites and other race / ethnicity groups. https://www.pewresearch.org/fact-tank/2019/07/30/most-common-age-among-us-racial-ethnic-groups/ https://www.pewresearch.org/fact-tank/2019/07/30/most-common... It has huge impact on both income and wealth.
- CincinnatiMan 5y agoIn regards to the Federal Reserve page, it seems disingenuous to lump so many different people into “Other.” Even if there’s no mal-intent, it seems it could cause one to wonder if there’s a motive behind doing so.
- tastyfreeze 5y agoFocusing on race income inequality perpetuates the division of society by race. There are wealthy families and poor families of every race. Focusing on race as the reason for income disparity is detrimental to the success of the whole. When race is marked as the reason for income inequality we get programs targeted at a specific race. It encourages building "institutional racism".
- temp8964 5y agoAny report directly calls data discrepancy as "inequality" cannot be trusted. Anybody is entitled to own political leaning, but bluntly giving up impartiality in data reporting indicates the whole process of your data selection / analysis / report cannot be trusted.
- didibus 5y agoCan someone help me with making conclusions here? What does this show? Are people earning less or more? I see it says men are earning less, but women earned more, which I mean makes sense. But is it saying that men earning less is due to women earning more? And if I understand, it also says women earned more but have started to stagnate as well?
- fallingfrog 5y agoAh yes, the neoliberal turn. https://www.transformingsociety.co.uk/2019/10/28/explaining-the-neoliberal-turn/ https://www.transformingsociety.co.uk/2019/10/28/explaining-...