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I get irritated when this little quirk of measurement is trotted out. Someone making 400k / yr as an investment banker is in a very different position than som

I get irritated when this little quirk of measurement is trotted out. Someone making 400k / yr as an investment banker is in a very different position than someone who 'makes' 400k selling grandpa's dairy farm and pays off creditors. It's very disingenuous to say that a large number of people will be in the top 10% at some point. Technically true, but meaningless.

bko 5y ago
Why is it meaningless? A lot of investment bankers quit, change professions or get laid off and can never re-enter the market. Just look at the number of analysts vs MDs and you'll see that the funnel gets a lot narrower at every stage. And you don't see many analysts in their 30s, so where do they go? There's a lot of turnover in the top 1% and 10%. https://money.cnn.com/2016/01/07/news/economy/top-1/index.html https://money.cnn.com/2016/01/07/news/economy/top-1/index.ht...
- wing-_-nuts 5y ago
  There are lots of jobs that consistently pay multiple six figure comp. To compare them to someone who realizes a one time capital gain from an inheritance or whatever is laughable. The two are simply not the same.
bhupy 5y ago
I recommend reading the research paper it's based on: https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0116370 https://journals.plos.org/plosone/article?id=10.1371/journal... There's a specific table that breaks it down clearly: https://journals.plos.org/plosone/article/figure?id=10.1371/journal.pone.0116370.t002 https://journals.plos.org/plosone/article/figure?id=10.1371/... 40% of Americans spend at least 2 years in the top 10%. That's not just selling grandpa's dairy farm and paying off creditors. A full 62% spend at least 2 years in the top 20%, and over 54% spend at least 3 years there.
- sudosysgen 5y ago
  You should be using consecutive years. And it may very well be that the sale of grandpa's fairy farm spans over two fiscal years.
  - bhupy 5y ago
    Firstly, consecutive years are in fact shown as well in the data linked: 56% of Americans spent 2 consecutive years in the top 20%, and 35% spent 2 consecutive years in the top 10%. Secondly, these numbers are based on tax filings, and even though the process of the sale of grandpa’s dairy farm may straddle 2 years, the income from the sale isn’t realized across 2 years; it will always register as a single fiscal year, I.e. the year in which the transaction closed. The actual income is not realized until then. Further, it’s not at all obvious that only considering consecutive years is necessary to invalidate the original GGP claim. The fact that 40% spent 2 not-necessarily-consecutive years in the top 10% (and 62% for the same in the top 20%) especially debunks the notion that one-time inheritance sales make up the variance. Nobody is selling grandpas dairy farm across 2 disjoint years. It also shows us that people do in fact move in and out of these quintiles (or deciles) as one would expect in a dynamic economy, and that those groups aren’t just a static cabal of people twirling their mustaches. The crux of the argument stands: the majority of Americans experience affluence by spending at least 2 years in the top 10-20%. And at the very least it totally invalidates the absurd claim made (quite confidently, at that) in the GGP comment: > Most American never get anywhere close to the top 10% - not even remotely - regardless of age. The idea that everyone is just waiting around for their career to advance enough to put them in the upper-middle class is ludicrous on its face. It’s just outright misinformation.
    - deleted 5y ago
      [deleted]
    - sudosysgen 5y ago
      It's not even misinformation, when you realise the headline is about wealth and not income.

bko 5y ago

Why is it meaningless? A lot of investment bankers quit, change professions or get laid off and can never re-enter the market. Just look at the number of analysts vs MDs and you'll see that the funnel gets a lot narrower at every stage. And you don't see many analysts in their 30s, so where do they go? There's a lot of turnover in the top 1% and 10%. https://money.cnn.com/2016/01/07/news/economy/top-1/index.html https://money.cnn.com/2016/01/07/news/economy/top-1/index.ht...

wing-_-nuts 5y ago
There are lots of jobs that consistently pay multiple six figure comp. To compare them to someone who realizes a one time capital gain from an inheritance or whatever is laughable. The two are simply not the same.

bhupy 5y ago

I recommend reading the research paper it's based on: https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0116370 https://journals.plos.org/plosone/article?id=10.1371/journal... There's a specific table that breaks it down clearly: https://journals.plos.org/plosone/article/figure?id=10.1371/journal.pone.0116370.t002 https://journals.plos.org/plosone/article/figure?id=10.1371/... 40% of Americans spend at least 2 years in the top 10%. That's not just selling grandpa's dairy farm and paying off creditors. A full 62% spend at least 2 years in the top 20%, and over 54% spend at least 3 years there.

sudosysgen 5y ago
You should be using consecutive years. And it may very well be that the sale of grandpa's fairy farm spans over two fiscal years.
- bhupy 5y ago
  Firstly, consecutive years are in fact shown as well in the data linked: 56% of Americans spent 2 consecutive years in the top 20%, and 35% spent 2 consecutive years in the top 10%. Secondly, these numbers are based on tax filings, and even though the process of the sale of grandpa’s dairy farm may straddle 2 years, the income from the sale isn’t realized across 2 years; it will always register as a single fiscal year, I.e. the year in which the transaction closed. The actual income is not realized until then. Further, it’s not at all obvious that only considering consecutive years is necessary to invalidate the original GGP claim. The fact that 40% spent 2 not-necessarily-consecutive years in the top 10% (and 62% for the same in the top 20%) especially debunks the notion that one-time inheritance sales make up the variance. Nobody is selling grandpas dairy farm across 2 disjoint years. It also shows us that people do in fact move in and out of these quintiles (or deciles) as one would expect in a dynamic economy, and that those groups aren’t just a static cabal of people twirling their mustaches. The crux of the argument stands: the majority of Americans experience affluence by spending at least 2 years in the top 10-20%. And at the very least it totally invalidates the absurd claim made (quite confidently, at that) in the GGP comment: > Most American never get anywhere close to the top 10% - not even remotely - regardless of age. The idea that everyone is just waiting around for their career to advance enough to put them in the upper-middle class is ludicrous on its face. It’s just outright misinformation.
  - deleted 5y ago
    [deleted]
  - sudosysgen 5y ago
    It's not even misinformation, when you realise the headline is about wealth and not income.