I'm too lazy to find the thread but,...

[Yonivore]

...remember when we were discussing the rise in incomes being 24.2% over the past 10 years and someone piped up that it didn't keep up with inflation or some such?

Well, the Treasury Department released their study where the 24.2% number is repeated but, they break it down by quintiles to show which income groups made the most gains.

Take a gander:



I'd say the first and second quintiles did just fine.

Here's the accompanying opinion piece in the Wall Street Journal:

Movin' On Up
A Treasury study refutes populist hokum about "income inequality."

Tuesday, November 13, 2007 12:01 a.m. EST

If you've been listening to Mike Huckabee or John Edwards on the Presidential trail, you may have heard that the U.S. is becoming a nation of rising inequality and shrinking opportunity. We'd refer those campaigns to a new study of income mobility by the Treasury Department that exposes those claims as so much populist hokum.

OK, "hokum" is our word. The study, to be released today, is a careful, detailed piece of research by professional economists that avoids political judgments. But what it does do is show beyond doubt that the U.S. remains a dynamic society marked by rapid and mostly upward income mobility. Much as they always have, Americans on the bottom rungs of the economic ladder continue to climb into the middle and sometimes upper classes in remarkably short periods of time.

The Treasury study examined a huge sample of 96,700 income tax returns from 1996 and 2005 for Americans over the age of 25. The study tracks what happened to these tax filers over this 10-year period. One of the notable, and reassuring, findings is that nearly 58% of filers who were in the poorest income group in 1996 had moved into a higher income category by 2005. Nearly 25% jumped into the middle or upper-middle income groups, and 5.3% made it all the way to the highest quintile.

Of those in the second lowest income quintile, nearly 50% moved into the middle quintile or higher, and only 17% moved down. This is a stunning show of upward mobility, meaning that more than half of all lower-income Americans in 1996 had moved up the income scale in only 10 years.

Also encouraging is the fact that the after-inflation median income of all tax filers increased by an impressive 24% over the same period. Two of every three workers had a real income gain--which contradicts the Huckabee-Edwards-Lou Dobbs spin about stagnant incomes. This is even more impressive when you consider that "median" income and wage numbers are often skewed downward because the U.S. has had a huge influx of young workers and immigrants in the last 20 years. They start their work years with low wages, dragging down the averages.

Those who start at the bottom but hold full-time jobs nonetheless enjoyed steady income gains. The Treasury study found that those tax filers who were in the poorest income quintile in 1996 saw a near doubling of their incomes (90.5%) over the subsequent decade. Those in the highest quintile, on the other hand, saw only modest income gains (10%). The nearby table tells the story [posted above], which is that the poorer an individual or household was in 1996 the greater the percentage income gain after 10 years.

Only one income group experienced an absolute decline in real income--the richest 1% in 1996. Those households lost 25.8% of their income. Moreover, more than half (57.4%) of the richest 1% in 1996 had dropped to a lower income group by 2005. Some of these people might have been "rich" merely for one year, or perhaps for several, as they hit their peak earning years or had some capital gains windfall. Others may simply have not been able to keep up with new entrepreneurs and wealth creators.

The key point is that the study shows that income mobility in the U.S. works down as well as up--another sign that opportunity and merit continue to drive American success, not accidents of birth. The "rich" are not the same people over time.

The study is also valuable because it shows that income mobility remains little changed from what similar studies found in the 1970s and 1980s. Some journalists and academics have cited selective evidence to claim that income mobility has declined in recent years.

But the 58% of lowest-income earners who moved to a higher income quintile in this study is roughly comparable to the percentages that did so in several similar studies going back to the late 1960s. "The basic finding of this analysis," says the Treasury report, "is that relative income mobility is approximately the same in the last 10 years as it was in the previous decade."

All of this certainly helps to illuminate the current election-year debate about income "inequality" in the U.S. The political left and its media echoes are promoting the inequality story as a way to justify a huge tax increase. But inequality is only a problem if it reflects stagnant opportunity and a society stratified by more or less permanent income differences. That kind of society can breed class resentments and unrest. America isn't remotely such a society, thanks in large part to the incentives that exist for risk-taking and wealth creation.

The great irony is that, in the name of reducing inequality, some of our politicians want to raise taxes and other government obstacles to the kind of risk-taking and hard work that allow Americans to climb the income ladder so rapidly. As the Treasury data show, we shouldn't worry about inequality. We should worry about the people who use inequality as a political club to promote policies that reduce opportunity.

So, the rich don't always get richer while the poor get poorer. Maybe there isn't two Americas after all.

[clambake]

the value of your house 10 years ago was what?

the value of your house today is what?

the thread, I think, was more about the american dream and the dwindling opportunity to achieve it.

[Nbadan]

Since Rupert Murdoch (owner of FAUX News) also owns the WSJ now, we should have known it would only be a matter of time before FAUX economic stats hit the WSJ....(a preview to the rah-rah, the economy is booming and inflation is flat we can expect from the new FAUX financial channel for sure)....

[Yonivore]

Since Rupert Murdoch (owner of FAUX News) also owns the WSJ now, we should have known it would only be a matter of time before FAUX economic stats hit the WSJ....(a preview to the rah-rah, the economy is booming and inflation is flat we can expect from the new FAUX financial channel for sure)....

Dan, you need serious psychological help. You're starting to sound like a paranoid schizophrenic.

[Yonivore]

the value of your house 10 years ago was what?

the value of your house today is what?

the thread, I think, was more about the american dream and the dwindling opportunity to achieve it.

I think this data disputes that.

[Extra Stout]

Pravda report shoe output up 10%! Rejoice, comrade!

[BradLohaus]

This is a good article about the CPI from Jerome Corsi. http://www.worldnetdaily.com/news/ar...TICLE_ID=58527

In an analysis of the CPI, Williams contends the index is understated by roughly 7 percent per year by government intentionally manipulating the data.

This is one I found from a couple of years ago.
http://www.isil.org/towards-liberty/...-gov-lies.html

Williams estimates the current real consumer inflation rate is closer to 6% than 2%. Other research services, like free market Agora Research, now put the real inflation rate at 7%-8%. (2005)

With an inflation rate of 7.2% per year the general price level would double in 10 years.

[boutons_]

U.S. Falls to No. 15 on Income Scale



By David Francis, Christian Science Monitor
Posted on November 13, 2007, Printed on November 13, 2007
http://www.alternet.org/story/67723/

"Comparisons are odious," that is, hateful, according to a popular phrase about seven centuries old. Comparison, however, is one of the tasks assigned to the Organization for Economic Cooperation and Development in Paris, an international body of 30 of the richest countries. It tries to compare its members' economic and social data, a difficult, perhaps even odious, job.

Sometime back it broadened statistically (for comparison purposes) the definition of the average workers in its member nations while trying to examine relative tax burdens. The result was "monumental," reckons Jacob Kirkegaard, an economist at the Peterson Ins ute for International Economics. The OECD ranked the after-tax income of the average worker in the United States as 15th among its member nations. The richest middle class, if measured in terms of the purchasing power of their income, was Britain.

That ranking would surprise most Americans, who likely consider their nation the most prosperous in the world.

In one fell swoop, OECD statisticians lowered the estimated income of the average American worker by more than 10 percent and raised average incomes of other rich nations by as much as 30 percent, notes Mr. Kirkegaard.

It may well be that the comparative US standard of living is slipping. The price of oil has risen more dramatically in the United States than in other nations because of the dollar's large devaluation.

The reason for the drop is also statistical. In the past, the OECD had been using a proxy for the middle class based on the "average production worker." This concept focused on full-time workers in the relatively declining manufacturing sector, which tends to be unionized in the US and better paid on average. The OECD's new measure is based on the "average worker," which captures all sorts of private-sector jobs including mining, utilities, construction, retail, hotel/restaurants, financial services, real estate, and other areas.

So this new system ought to provide a fairer comparison.

But 15th place?

Not likely, figures David Grubb, an OECD economist in Paris. He points out that the US and Canada included in the statistics that it sent to Paris the wages of nonsupervisory workers, and not those of higher paid supervisory workers and salaried professionals. When that statistical difference is corrected, the rank of the American middle class would move up from 15th. How far is uncertain.

In the newest OECD Economic Outlook, the average annual wage in the total economy of the US was $45,563 for 2005. That's exceeded only by Luxembourg, a wealthy banking duchy, with $50,634. Britain, Ireland, and Australia, are not far behind the US with incomes above $40,000.

The problem is that this is a measure of total wages, not just the middle class, and it includes the richest Americans whose incomes have risen enormously in recent years. Outside of Hungary, the US has the most extreme income inequality in the OECD.

Kirkegaard figures middle- and lower-income Americans are being squeezed by the flood of money going to the superwealthy. Democrats in Congress have the same view, and their tax proposals would shift the tax burden up the income ladder.

After the early 1990s, the incomes of "very well-off Americans increased much faster than those of both the middle class and the poor," figures Gary Burtless, an expert at the Brookings Ins ution in Washington. For example, top corporate officers got pay increases of 9.5 percent a year in the 1990s, on top of high levels to start with.

This doesn't mean that Middle America incomes have been entirely flat. An analysis by Terry Fitzgerald, an economist at the Federal Reserve Bank of Minneapolis, concludes that a "broad swath of Middle America experienced notable hourly wage gains" since 1975. In other words, children can still assume they have a better living standard, on average, than their parents did. [Editor's note: The original version misidentified the Federal Reserve Bank of Minneapolis economist.]

To reach that conclusion, Mr. Fitzgerald had to disentangle a "confusing web of data." Two data series on individual hourly wage rates showed little, or even negative, growth over the past 30 years. But labor income for the entire national economy was shown to have grown 39 percent in that time span.

To square this apparent contradiction, Fitzgerald applied to the two wage series a broader price index (personal consumption expenditures), which covers the basket of final goods and services that people consume each year. The new result: Average hourly earnings rose 10 percent, rather than declining 4 percent, from 1975 to 2005. Median hourly wages also rose 20 percent rather than 12 percent. Then he factored fringe benefits into the wage calculation, since they have become increasingly expensive and "contribute to workers' well-being."

That combination accounted for 28 percent of the 39 percent growth of total labor income. "This does not contradict the claim that wage inequality increased over this period - it did," writes Fitzgerald in a bank publication. In other words, the rich are still getting proportionately richer.

© 2007 Independent Media Ins ute. All rights reserved.
View this story online at: http://www.alternet.org/story/67723/

=====================

So why did the Repugs still cut taxes on the super-rich and give 100s of $Bs to the corps? Pure greed and corruptio.

[boutons_]

Not the Yoni, Fox, WSJ, or a Repug govt give a about blacks or any ethnic group:

Middle-Class Dream Eludes African American Families

Many Blacks Worse off Than Their Parents, Study Says

By Michael A. Fletcher
Washington Post Staff Writer
Tuesday, November 13, 2007; A01

Nearly half of African Americans born to middle-income parents in the late 1960s plunged into poverty or near-poverty as adults, according to a new study -- a perplexing finding that analysts say highlights the fragile nature of middle-class life for many African Americans.

Overall, family incomes have risen for both blacks and whites over the past three decades. But in a society where the privileges of class and income most often perpetuate themselves from generation to generation, black Americans have had more difficulty than whites in transmitting those benefits to their children.

Forty-five percent of black children whose parents were solidly middle class in 1968 -- a stratum with a median income of $55,600 in inflation-adjusted dollars -- grew up to be among the lowest fifth of the nation's earners, with a median family income of $23,100. Only 16 percent of whites experienced similar downward mobility. At the same time, 48 percent of black children whose parents were in an economic bracket with a median family income of $41,700 sank into the lowest income group.

http://www.washingtonpost.com/wp-dyn...v=most_emailed

[Nbadan]

With an inflation rate of 7.2% per year the general price level would double in 10 years.

We've talked in length before about how the government uses the drop in prices on things like the IPhone, home-computers and video games to off-set price increases in groceries and other necessary non-durables, while completely ignoring most of the increases in the cost of energy, namely gas and home-heating oil, and housing, child-care....

[Nbadan]

Hey Brad, here is a link that might interest you: (or other amateur mathematicians)

Dr. Albert Bartlett, Professor Emeritus of Physics, University of Colorado at Boulder explains the power of e on rate of growth, consumption and prices....great video

[spurster]

The WSJ should make up its mind about this IRS data.

http://online.wsj.com/public/article...413557069.html

Income-Inequality Gap Widens
Boom in Financial Markets
Parallels Rise in Share
For Wealthiest Americans
By GREG IP
October 12, 2007; Page A2

The richest Americans' share of national income has hit a postwar record, surpassing the highs reached in the 1990s bull market, and underlining the divergence of economic fortunes blamed for fueling anxiety among American workers.

The wealthiest 1% of Americans earned 21.2% of all income in 2005, according to new data from the Internal Revenue Service. That is up sharply from 19% in 2004, and surpasses the previous high of 20.8% set in 2000, at the peak of the previous bull market in stocks.

The bottom 50% earned 12.8% of all income, down from 13.4% in 2004 and a bit less than their 13% share in 2000.

The IRS data, based on a large sample of tax returns, are for "adjusted gross income," which is income after some deductions, such as for alimony and contributions to individual retirement accounts. While dated, many scholars prefer it to timelier data from other agencies because it provides details of the very richest -- for example, the top 0.1% and the top 1%, not just the top 10% -- and includes capital gains, an important, though volatile, source of income for the affluent.

The IRS data go back only to 1986, but academic research suggests the rich last had this high a share of total income in the 1920s.

Scholars attribute rising inequality to several factors, including technological change that favors those with more skills, and globalization and advances in communications that enlarge the rewards available to "superstar" performers whether in business, sports or entertainment.

...

[Yonivore]

I think you're confusing the analysis on the mobility between income groups, by individuals, with the performance of the overall group as a whole.

While the top 1% of the 96,000 some-odd filers, in 2005, earned more - by comparison to the other top 1% in the previous year (2004), that top 1% includes some people that were in the lower quintiles over the previous 10 years.

So, while the rich did get richer from 2004 to 2005, many of them used to be poor and some that were rich in 1995 are now poor. I believe that was the point of the other article. Income is fluid...just because you're poor today, doesn't mean you'll be so tomorrow and vice-versa.

The same people are not populating those quintiles from year to year.

[DarkReign]

I think you're confusing the analysis on the mobility between income groups, by individuals, with the performance of the overall group as a whole.

While the top 1% of the 96,000 some-odd filers, in 2005, earned more - by comparison to the other top 1% in the previous year (2004), that top 1% includes some people that were in the lower quintiles over the previous 10 years.

So, while the rich did get richer from 2004 to 2005, many of them used to be poor and some that were rich in 1995 are now poor. I believe that was the point of the other article. Income is fluid...just because you're poor today, doesn't mean you'll be so tomorrow and vice-versa.

The same people are not populating those quintiles from year to year.

I just lost my entire post. It was a long one. !

[Yonivore]

I just lost my entire post. It was a long one. !

I hate it when that happens. You have my sympathy. You also have my excuse for stealing.

Find someone who agrees with your position and post it. It's simpler than rewriting a long ing post for a forum that will never, ever, appreciate your original work.

[DarkReign]

I hate it when that happens. You have my sympathy. You also have my excuse for stealing.

Find someone who agrees with your position and post it. It's simpler than rewriting a long ing post for a forum that will never, ever, appreciate your original work.

I LOL'd.

[Yonivore]

I LOL'd.

Glad to amuse.

[Spawn]

Not the Yoni, Fox, WSJ, or a Repug govt give a about blacks or any ethnic group:

Middle-Class Dream Eludes African American Families

Many Blacks Worse off Than Their Parents, Study Says

By Michael A. Fletcher
Washington Post Staff Writer
Tuesday, November 13, 2007; A01

Nearly half of African Americans born to middle-income parents in the late 1960s plunged into poverty or near-poverty as adults, according to a new study -- a perplexing finding that analysts say highlights the fragile nature of middle-class life for many African Americans.

Overall, family incomes have risen for both blacks and whites over the past three decades. But in a society where the privileges of class and income most often perpetuate themselves from generation to generation, black Americans have had more difficulty than whites in transmitting those benefits to their children.

Forty-five percent of black children whose parents were solidly middle class in 1968 -- a stratum with a median income of $55,600 in inflation-adjusted dollars -- grew up to be among the lowest fifth of the nation's earners, with a median family income of $23,100. Only 16 percent of whites experienced similar downward mobility. At the same time, 48 percent of black children whose parents were in an economic bracket with a median family income of $41,700 sank into the lowest income group.

http://www.washingtonpost.com/wp-dyn...v=most_emailed

Oh great, another anti-neocon pimping the plight of Blacks in this country to fit his political agenda. Oh my, you really do care!!!

[BradLohaus]

Hey Brad, here is a link that might interest you: (or other amateur mathematicians)

Dr. Albert Bartlett, Professor Emeritus of Physics, University of Colorado at Boulder explains the power of e on rate of growth, consumption and prices....great video

I couldn't get the video to play, but I googled it and read some of what he's saying. From what I got, and I don't know if it's the same topic as the video, he's applying Malthusian theory to energy consumption growth vs. energy supply growth. That's interesting, because despite population growth declining as people get more wealthy, energy consumption increases as people get more wealthy, even with lower birth rates. That's very interesting... and frightening, because that very well could be a correct application of exponential vs. arithmetic growth rates with a human variable. I guess we'd better hope that there's a of alot of oil in the ground, and every other commodity. But not too much gold and silver.

[Nbadan]

Sorry - you'll need the K-lite codec (which you should have installed anyway, by-the-way cause it eliminates the need for Real-player)....

...it's a great speech and certainly worthy of a codec down-load...