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Americans' Median Net Worth by Age -- How Do You Compare?
Nothing for anyone to care about. The $58k or whatever it is does not weigh on anyone like some household or personal debt. What should be cared about (only) is percentage of GDP. This may be too high (lots of arguability here), or may not, but does show the problem of not paying for things (chiefly war activities) in real time. https://en.wikipedia.org/wiki/Debt-to-GDP_ratio
I just went over to the government's TSP site and used their calculator to see what the "worth" in SS income of an equivalent annuity would be. Since I wanted a value for the bottom tier who may have almost no real savings or home ownership, I chose $1000/mo as their SS income. I think the annuity purchase closest to SS would be an increasing value payout with 100% survivor benefit. $400,000 would buy the annuity with a $1022/mo benefit. (Both members of a couple assumed to be age 66. Without the increasing component it would have been about $250,000. I don't know what the best price elsewhere would be.) Monthly benefit equivalents larger than $1022/mo would, of course, cost more if plugged into this calculator. Those of us with many times the savings required should appreciate the "ownership" of this tier to their "SS derived worth" even if, or especially if, the expense of annuities is up enormously due to low rates.
What a disaster! The chart tells a story of cumulative failure. It is an outright disgrace.
The failure that I perceive is not a national failure. It is the failure of the individual and/or the individual family unit. The USA is a prosperous nation with almost unlimited potential wealth for its citizens. Yet the wealth depicted in the accompanying chart is truly dismal for individual folks.
The opportunities exist, but our financial discipline fails us as individuals. We want and demand the storybook good life before we can afford it. Delaying gratification would go a long way to resolving this problem. The small numbers shown in the chart as a function of age demonstrate the issue. The problem would quickly desolve if we just practiced the saving discipline that many of us displayed until roughly the early 1980s. We seemed to toss frugality to the wind in that era and have never recovered from that reckless joyride.
Here is a Link to a nice PBS presentation that highlights some of the significant conflicting issues:
My wife and I never succumbed to the temptation to overspend. We always saved about 15% of our gross income and invested wisely. I suppose that it was a wise decision to study the investment process. We did and we prospered. As a result, it is no exaggeration to claim we are chart busters. Some luck, some skill, but above all a disciplined saving and spending behavior.
I truly feel sorry for the median and below folks that are depicted by the chart. Those folks are in constant danger of being decimated by an unexpected negative happening that a few hundred dollars could easily cure.
@MJG You noted: "The chart tells a story of cumulative failure. It is an outright disgrace.
The failure that I perceive is not a national failure. It is the failure of the individual and/or the individual family unit."
Is not the stated "cumulative failure" the blend of the individual failure(s) that have become so cumulative that the failure(s) manifest into a "national failure"?
Perhaps I have a reading digestive brain fart this Sunday morning.
I thank you for reading my post, however I do not see any contradictions in my several sratements that you quoted. Interpretations can and do differ.
I was simply summarizing that I do not believe that the disappointing chart reflects something endemic to the culture, or teachings, or anything else imposed by the USA as a national standard.
I attribute the chart findings to individuals alone. Period. When summed nationwide it is not an encouraging picture. It is a ""cumulative failure" caused by individual bad decisions.
It appears you take issue with my word choice and not my baseline conclusion. You seem to be missing the forest because of the trees. When investing that's a recipe for the Loser's Game. I've managed to escape that game.
Thank you so very much for reading and reacting to my post. That's a signal that my post satisfied my goal of submitting an interesting post.
EDIT: Not only does the data not reflect a national goal, it runs contrary to it. Saving a fraction of an income is a prudent policy advocated by most everyone, including the government. We may talk that talk, but we sure don't practice it. Too, too bad since it makes us vulnerable to rather minor unexpected negative happenings.
Human capital is not a part of one's net worth... Regardless, if accurate, these numbers are embarrassing...
Human capital technically may not be part pf net worth, but it is critical to include it in any evaluation of how a person is doing financially. Check out this article:
Thanks for the article. If I am reading this chart correctly. The chart illustrates that a 25 year old has 9x as much human capital as financial assets. A 40 year old has an equal amount of human capital as financial assets and at 60 year old should have financial assets equal about 9X their human capital. This chart seems like a pretty good way to gauge where a worker needs to be in the process of using human capital to accumulate financial assets which I assume is the intent of this chart.
I'll assume we're equating human capital (income producing activities moment by moment) to accumulated financial wealth.
As a simple example, if human capital at 25 years old is say, "$50K", then by 40 years old financial assets should equal "$50K". A 25 year old has 15 years to save some of his/her human capital each year to reach this goal at age 40. This amounts to investing about $2100 / yr with an average return of 4%. Seems very achievable.
If at age 60 your human capital is say "$100K", your financial assets should equal "$900K". A 40 year old has 20 years to invest some of his/her human capital each year to reach this goal at age 60. This would amount to investing about $25,500 / yr with an average return of 4%. This seems a bitt more challenging especially when things like college tuition, weddings, and elderly parents (or unemployed kids) are siphoning off some of your human capital.
Legal capital Social capital Infrastructure capital Environmental capital Health care capital Educational capital Nutritional capital Financial Markets & systems capital
I likely am greatly overconfident in my contribution here since I'm running naked now. I did not and do not intend to read the referenced article.
Just as DanHardy implies, the Human Capital chart that you culled from the article is just too, too simplistic. Perhaps it is representative as a gross average, but there must be a host of significant exceptions. So many exceptions that the curve itself is a distortion of reality.
For example, as I aged, I collected human capital through study and experience without really increasing my wealth. Life is not a smooth function of time. Successes and failures happen abruptly. Even represented as a percentage, financial assets and human capital are not necessarily a well behaved trade off. Learning benefits often exceed financial rewards. Life is a very non-linear, uncertain process.
I don't plan to research any such perceived relationship. Life is too short.
The paper does not express concepts clearly, giving the writers the benefit of the doubt that there are well-defined underlying concepts.
For example, is human capital "the net present value of his or her future earnings" (p. 6, pdf p.8)? That's how I would have defined it.
But in the spreadsheet (Figure 12, p. 17, pdf p. 19), human capital is shown to be the present value of future savings. Put a savings rate of 0% into column D, and your human capital comes out as 0. So I guess if you're not going to save anything, you might as well not work, even if you could bring in a half million bucks a year, as in the spreadsheet example?
Getting back to bee's question about reading the chart. First, remember that it is illustrative. The only thing it's designed to show is that as you get older, your human capital declines (as you, well, decline). Consequently, even if your financial assets don't grow, they grow as a percentage of your total. That's all you can read into this chart.
Second, the value of human capital (as muddled through above) is not your annual salary, but your lifetime future earnings reduced to present value. Take your hypothetical person earning $25K at age 25, with salary expected to grow to $100K at age 60. Suppose that this is the last year he plans to work.
At age 25, the human capital (using 3% discount rate) is worth somewhere around $1.2M. (With 0% discount, you'd get a bit over $2M.) At age 60, the human capital is worth around $100K (one final year's earnings). The youngster has a lot more, not less, human capital than the senior about to retire.
I agree with the paper's idea of reducing future income (e.g. future wages) to NPV and increasing equity allocation accordingly. Beyond that, I'd look closely at every assumption and calculation (and figure label, e.g. there are two Figure 10s) in the paper.
I would apply the same idea to Social Security - another income stream that one can reduce to present value and use to increase equity allocations.
Sheesh! If anything this proves rising stock market does not benefit most people. Because after paying for everything every month they don't have anything left to invest. Then again, after they slowly accumulate some savings, and then look at how well the stock market has done, they get suckered into buying. Everyone knows what happens next.
I hope my grandkids if not my kids make it to Mars. Not sure about this planet. My elder should start college next year (if only she can figure out what she wants to do this century!). She's got my great looks and my wife's brain and there is a chance she can get a scholarship. The point of sharing this is DEBT is the problem. I will pay for her college regardless, but for a lot of people getting out of DEBT prevents them from investing. Near zero rates don't do jack for them because they can never borrow at that rate.
All these FOOLish articles basically end with message "invest this much and see how it will compoind", etc. They are just trying to get you to invest. That's how they make money regardless of what the market does. I used to kid I want my kids to be mutual fund managers. Now, I feel like a turd. Sorry, but investing is not going to get ANYONE out of trouble. Those numbers are what they are because people don't have anything left to invest. So talking about allocating this much and investing that much more every month is nonsense, IMO. Investing is not going to get one out of debt.
People don't have money to invest because too many live outside of their means. You want to pay off your debt? Well, then don't go out to the bars 2-3 times a week. Don't buy that new $150 pair of shoes that you don't need. Bring your lunch to work instead of spending $7-15 per meal. People need to have a better understanding of money and how much they can really afford. This education should be done in high school, if not earlier.
People don't have money to invest because too many live outside of their means. You want to pay off your debt? Well, then don't go out to the bars 2-3 times a week. Don't buy that new $150 pair of shoes that you don't need. Bring your lunch to work instead of spending $7-15 per meal. People need to have a better understanding of money and how much they can really afford. This education should be done in high school, if not earlier.
Agree. That too. I had a conversation once with my daughter when she was young regarding "I need an iPhone" vs "I want an iPhone". Money has no value and conversely people don't understand value of money. My daughter's iPhone was purchased by HER after she had to do a summer job and get PAID from someone other than her daddy.
I will say though, the "want" people unfortunately tarnish the "need" people, and then at the end of it, everyone suffers. For every $15 lunch idiot is another for whom $1 McDonald burger is lunch.
Consider the source --The chart was posted by Motley Fool. On the "Fool" website, the chart indicates the source was the US Census Bureau....
How would the USCB have access to all of our accounts -- accounts held in banks, brokerages, insurance companies (i.e. cash-balances on policies, variable annuities,) and what about value of non-securitized commercial and/or residential real estate held privately? Or undeveloped land. Or physical savings bonds? Or bullion?
Keep in mind the chart purports to display "median" net worth -- so even if the USCB could accurately aggregate all the assets & liabilities (unlikely), they would then need to apportion those assets and liabilities accurately amongst households. If you think the USCB can do that, well, I'd like to meet you for a game of poker.
I think the likelihood that the numbers are anything like an accurate approximation are NIL. But hey, what a lively conversation arguing about phony numbers..
@davidrmoran - you beat me to some of the links (and comments). Though I do agree with the sentiment that I wouldn't trust much written by a Fool. Which is why one wants to go to the source.
Sometimes as early as the 1840s, William Henry Harrison said something that approached " the rich get richer and the poor get poorer". The industrial revolution had already started and it was hoped that major poverty would be eliminated. The data discussed in this exchange prove otherwise.
I thank you all for bringing the wealth distribution stats more fully into focus for me. I live in an affluent neighborhood in an affluent town and don''t often, if ever, come face-to-face with poverty and its victims. That's my shortfall.
The data that you guys referenced highlight the many shortcomings of wealth distribution in the USA. I was not aware that household wealth has basically stagnated since 2000 and the distribution has become even more distorted. The bottom 40% have lost ground while only the top 40% have gained ground, and only the elite 10% has done so significantly. We can do better than that although economic opportunity has never been equally distributed. Education is not the only cause for this distortion.
Thank you for calling my attention to these sorrowful statistics. I learned much.. Unlike a few others on this exchange, I do trust them. The detail contained in these government surveys and releases is truly amazing.
Sometimes as early as the 1840s, William Henry Harrison said something that approached " the rich get richer and the poor get poorer". The industrial revolution had already started and it was hoped that major poverty would be eliminated. The data discussed in this exchange prove otherwise.
I thank you all for bringing the wealth distribution stats more fully into focus for me. I live in an affluent neighborhood in an affluent town and don''t often, if ever, come face-to-face with poverty and its victims. That's my shortfall.
If you look at the size of the middle class world wide since WWII it is usually large, historically speaking.
The theme of history is income inequality. The abnormality is recent history. Economically, the future world will look more like pre-industrial revolution world then post WWII - Rich, small fragile middle class and the rest poor.
The middle class benefited from manufacturing and production jobs that could be had right out of high school. These were decent paying jobs too. Automation and outsourcing to other countries has pretty much eliminated those jobs. Many of the remaining jobs now require additional schooling. For ex, housekeepers in a hospital in the state I lived in used to be trained on the job. Now they have to be certified by taking a 9 month comm. college course. The job I had was on the job apprenticeship back in the 70's. Now it's a 2 year course and talk of making it 4 years is ongoing.
Commoners and peasantry might be the new term for the middle class.
Many of the remaining jobs now require additional schooling. For ex, housekeepers in a hospital in the state I lived in used to be trained on the job. Now they have to be certified by taking a 9 month comm. college course. The job I had was on the job apprenticeship back in the 70's. Now it's a 2 year course and talk of making it 4 years is ongoing.
Commoners and peasantry might be the new term for the middle class.
That is a good point on how worker are actually getting paid less then the past. Workers got paid while being trained. Now workers have to pay for their work training.
Caught related info on the radio yesterday (while driving, so only got the gist).
It used to be that companies paid workers to go to college, but these days that's rare. And where these programs still exist, they're very limited. Starbucks was given as an example - they'll pay workers' tuition, but only for one college (Arizona State University), and only for an online program. http://globalassets.starbucks.com/assets/2EA4CFEBE53E4771B8A6E038BB47AF8A.pdf
The report went on to observe a perhaps unintended consequence of tuition support programs. These programs usually require students to maintain a certain GPA (e.g. B). So students will avoid harder courses, or drop courses to concentrate on a few where they can keep their grades up.
These latest comments reminded me of some more examples of how the middle class is being decimated.
Recently on Japan television, I saw a show where the topic was robots. In one example, humanoid robots were working on a assembly line along with humans. These types of robots were doing amazing things like picking up tools to tighten assemblies or using power drills to drill holes, much like humans. The humans were there for QC.
Another point is in the environmental arena where the current administration just signed into effect a marine reserve off the New England coast. This was prime fishing grounds for many types of fish and shellfish. 5000 sq. miles if I'm not mistaken. The same is happening on the west coast too as well as sealing off land from logging and ranching.
MJG: “The failure that I perceive is not a national failure. It is the failure of the individual and/or the individual family unit…. The problem would quickly desolve if we just practiced the saving discipline that many of us displayed until roughly the early 1980s. We seemed to toss frugality to the wind in that era and have never recovered from that reckless joyride”
Response: I wholly endorse those comments. Granted, secular & policy trends have stagnated incomes. Chief among these in my opinion: “Trade Uber Alles” trade policies, open borders and (legalized-) corruption/bribery of the political class.. Mass automation will be another headwind.
That said, individuals are “captains” of their own lives. Pursuing worthless degree programs on borrowed money, marrying too soon (or too often !)– or choosing a poor life-partner, or having kids outside of the traditional two-parent household – these are often costly, life-effecting decisions. Succumbing to relentless distractions from real life -- of which spectator sports, the internet & chemical-dependency, are problems too. Choosing not to “pay one’s self first” is another bad decision. These decisions often can costs hundreds of thousands of dollars over a lifetime. -- and 'voila!' there are large chunks of the 'savings gap'.
Successive, contemporary generations seem to increasingly make poor, life-altering decisions, rather than following the “straight and narrow” path common in times past. It really is on each of us to “choose wisely” - or suffer the consequences.
If that “Fool” chart is correct, it amounts to a collective tally of those consequences. It’s the parable of the ant and the grasshopper, writ large.
MJG: “The failure that I perceive is not a national failure. It is the failure of the individual and/or the individual family unit…. The problem would quickly desolve if we just practiced the saving discipline that many of us displayed until roughly the early 1980s. We seemed to toss frugality to the wind in that era and have never recovered from that reckless joyride”
Response: I wholly endorse those comments. Granted, secular & policy trends have stagnated incomes. Chief among these in my opinion: “Trade Uber Alles” trade policies, open borders and (legalized-) corruption/bribery of the political class.. Mass automation will be another headwind.
I agree with that to a degree - trade policies. However, if an individual does not have options then it is not wholly their responsibility. Also, much of this 'individual responsibility' disparity is due to the base comparison - the working generation that came from about 1942 - 1980 (lets not get too hung up on the exact dates). As mentioned here current workers do not have the work/pay/benefits opportunities that past workers did.
Comments
right
>> you and many others don't care (yet).
Nothing for anyone to care about. The $58k or whatever it is does not weigh on anyone like some household or personal debt. What should be cared about (only) is percentage of GDP. This may be too high (lots of arguability here), or may not, but does show the problem of not paying for things (chiefly war activities) in real time.
https://en.wikipedia.org/wiki/Debt-to-GDP_ratio
What a disaster! The chart tells a story of cumulative failure. It is an outright disgrace.
The failure that I perceive is not a national failure. It is the failure of the individual and/or the individual family unit. The USA is a prosperous nation with almost unlimited potential wealth for its citizens. Yet the wealth depicted in the accompanying chart is truly dismal for individual folks.
The opportunities exist, but our financial discipline fails us as individuals. We want and demand the storybook good life before we can afford it. Delaying gratification would go a long way to resolving this problem. The small numbers shown in the chart as a function of age demonstrate the issue. The problem would quickly desolve if we just practiced the saving discipline that many of us displayed until roughly the early 1980s. We seemed to toss frugality to the wind in that era and have never recovered from that reckless joyride.
Here is a Link to a nice PBS presentation that highlights some of the significant conflicting issues:
http://www.pbs.org/newshour/bb/why-so-many-americans-in-the-middle-class-have-no-savings/
My wife and I never succumbed to the temptation to overspend. We always saved about 15% of our gross income and invested wisely. I suppose that it was a wise decision to study the investment process. We did and we prospered. As a result, it is no exaggeration to claim we are chart busters. Some luck, some skill, but above all a disciplined saving and spending behavior.
I truly feel sorry for the median and below folks that are depicted by the chart. Those folks are in constant danger of being decimated by an unexpected negative happening that a few hundred dollars could easily cure.
Best Wishes.
You noted: "The chart tells a story of cumulative failure. It is an outright disgrace.
The failure that I perceive is not a national failure. It is the failure of the individual and/or the individual family unit."
Is not the stated "cumulative failure" the blend of the individual failure(s) that have become so cumulative that the failure(s) manifest into a "national failure"?
Perhaps I have a reading digestive brain fart this Sunday morning.
I thank you for reading my post, however I do not see any contradictions in my several sratements that you quoted. Interpretations can and do differ.
I was simply summarizing that I do not believe that the disappointing chart reflects something endemic to the culture, or teachings, or anything else imposed by the USA as a national standard.
I attribute the chart findings to individuals alone. Period. When summed nationwide it is not an encouraging picture. It is a ""cumulative failure" caused by individual bad decisions.
It appears you take issue with my word choice and not my baseline conclusion. You seem to be missing the forest because of the trees. When investing that's a recipe for the Loser's Game. I've managed to escape that game.
Thank you so very much for reading and reacting to my post. That's a signal that my post satisfied my goal of submitting an interesting post.
EDIT: Not only does the data not reflect a national goal, it runs contrary to it. Saving a fraction of an income is a prudent policy advocated by most everyone, including the government. We may talk that talk, but we sure don't practice it. Too, too bad since it makes us vulnerable to rather minor unexpected negative happenings.
Best Wishes.
The chart illustrates that a 25 year old has 9x as much human capital as financial assets. A 40 year old has an equal amount of human capital as financial assets and at 60 year old should have financial assets equal about 9X their human capital. This chart seems like a pretty good way to gauge where a worker needs to be in the process of using human capital to accumulate financial assets which I assume is the intent of this chart.
I'll assume we're equating human capital (income producing activities moment by moment) to accumulated financial wealth.
As a simple example, if human capital at 25 years old is say, "$50K", then by 40 years old financial assets should equal "$50K". A 25 year old has 15 years to save some of his/her human capital each year to reach this goal at age 40. This amounts to investing about $2100 / yr with an average return of 4%. Seems very achievable.
If at age 60 your human capital is say "$100K", your financial assets should equal "$900K". A 40 year old has 20 years to invest some of his/her human capital each year to reach this goal at age 60. This would amount to investing about $25,500 / yr with an average return of 4%. This seems a bitt more challenging especially when things like college tuition, weddings, and elderly parents (or unemployed kids) are siphoning off some of your human capital.
Legal capital
Social capital
Infrastructure capital
Environmental capital
Health care capital
Educational capital
Nutritional capital
Financial Markets & systems capital
I likely am greatly overconfident in my contribution here since I'm running naked now. I did not and do not intend to read the referenced article.
Just as DanHardy implies, the Human Capital chart that you culled from the article is just too, too simplistic. Perhaps it is representative as a gross average, but there must be a host of significant exceptions. So many exceptions that the curve itself is a distortion of reality.
For example, as I aged, I collected human capital through study and experience without really increasing my wealth. Life is not a smooth function of time. Successes and failures happen abruptly. Even represented as a percentage, financial assets and human capital are not necessarily a well behaved trade off. Learning benefits often exceed financial rewards. Life is a very non-linear, uncertain process.
I don't plan to research any such perceived relationship. Life is too short.
Best Wishes.
For example, is human capital "the net present value of his or her future earnings" (p. 6, pdf p.8)? That's how I would have defined it.
But in the spreadsheet (Figure 12, p. 17, pdf p. 19), human capital is shown to be the present value of future savings. Put a savings rate of 0% into column D, and your human capital comes out as 0. So I guess if you're not going to save anything, you might as well not work, even if you could bring in a half million bucks a year, as in the spreadsheet example?
Getting back to bee's question about reading the chart. First, remember that it is illustrative. The only thing it's designed to show is that as you get older, your human capital declines (as you, well, decline). Consequently, even if your financial assets don't grow, they grow as a percentage of your total. That's all you can read into this chart.
Second, the value of human capital (as muddled through above) is not your annual salary, but your lifetime future earnings reduced to present value. Take your hypothetical person earning $25K at age 25, with salary expected to grow to $100K at age 60. Suppose that this is the last year he plans to work.
At age 25, the human capital (using 3% discount rate) is worth somewhere around $1.2M. (With 0% discount, you'd get a bit over $2M.) At age 60, the human capital is worth around $100K (one final year's earnings). The youngster has a lot more, not less, human capital than the senior about to retire.
I agree with the paper's idea of reducing future income (e.g. future wages) to NPV and increasing equity allocation accordingly. Beyond that, I'd look closely at every assumption and calculation (and figure label, e.g. there are two Figure 10s) in the paper.
I would apply the same idea to Social Security - another income stream that one can reduce to present value and use to increase equity allocations.
I'll take a tissue (sniff, sniff) because I resemble that statement, but I prefer to describe myself as in a state of "recline".
Nice to think of a twenty-somethings as twillionaires. I'll remember that when next time my kids need a loan.
I hope my grandkids if not my kids make it to Mars. Not sure about this planet. My elder should start college next year (if only she can figure out what she wants to do this century!). She's got my great looks and my wife's brain and there is a chance she can get a scholarship. The point of sharing this is DEBT is the problem. I will pay for her college regardless, but for a lot of people getting out of DEBT prevents them from investing. Near zero rates don't do jack for them because they can never borrow at that rate.
All these FOOLish articles basically end with message "invest this much and see how it will compoind", etc. They are just trying to get you to invest. That's how they make money regardless of what the market does. I used to kid I want my kids to be mutual fund managers. Now, I feel like a turd. Sorry, but investing is not going to get ANYONE out of trouble. Those numbers are what they are because people don't have anything left to invest. So talking about allocating this much and investing that much more every month is nonsense, IMO. Investing is not going to get one out of debt.
I think the bankruptcy laws have to change.
I will say though, the "want" people unfortunately tarnish the "need" people, and then at the end of it, everyone suffers. For every $15 lunch idiot is another for whom $1 McDonald burger is lunch.
How would the USCB have access to all of our accounts -- accounts held in banks, brokerages, insurance companies (i.e. cash-balances on policies, variable annuities,) and what about value of non-securitized commercial and/or residential real estate held privately? Or undeveloped land. Or physical savings bonds? Or bullion?
Keep in mind the chart purports to display "median" net worth -- so even if the USCB could accurately aggregate all the assets & liabilities (unlikely), they would then need to apportion those assets and liabilities accurately amongst households. If you think the USCB can do that, well, I'd like to meet you for a game of poker.
I think the likelihood that the numbers are anything like an accurate approximation are NIL. But hey, what a lively conversation arguing about phony numbers..
http://www.census.gov/people/wealth/data/
http://www.census.gov/people/wealth/data/dtables.html
http://www.census.gov/topics/income-poverty/income.html
Or you can go work for them and inform their ignorant statisticians / polltakers where they're wrong.
It's like arguing w BLS data. The more it gets checked, the truer it appears.
Here are a couple more links:
Age vs. household wealth: Table A1 of the CB publication Distribution of Household Wealth in the U.S.: 2000 to 2011
The actual source of the data is SIPP (Survey of Income and Program Participation).
https://www.census.gov/programs-surveys/sipp/about.html
Sometimes as early as the 1840s, William Henry Harrison said something that approached " the rich get richer and the poor get poorer". The industrial revolution had already started and it was hoped that major poverty would be eliminated. The data discussed in this exchange prove otherwise.
I thank you all for bringing the wealth distribution stats more fully into focus for me. I live in an affluent neighborhood in an affluent town and don''t often, if ever, come face-to-face with poverty and its victims. That's my shortfall.
The data that you guys referenced highlight the many shortcomings of wealth distribution in the USA. I was not aware that household wealth has basically stagnated since 2000 and the distribution has become even more distorted. The bottom 40% have lost ground while only the top 40% have gained ground, and only the elite 10% has done so significantly. We can do better than that although economic opportunity has never been equally distributed. Education is not the only cause for this distortion.
Thank you for calling my attention to these sorrowful statistics. I learned much.. Unlike a few others on this exchange, I do trust them. The detail contained in these government surveys and releases is truly amazing.
Best Wishes.
The theme of history is income inequality. The abnormality is recent history. Economically, the future world will look more like pre-industrial revolution world then post WWII - Rich, small fragile middle class and the rest poor.
Commoners and peasantry might be the new term for the middle class.
It used to be that companies paid workers to go to college, but these days that's rare. And where these programs still exist, they're very limited. Starbucks was given as an example - they'll pay workers' tuition, but only for one college (Arizona State University), and only for an online program.
http://globalassets.starbucks.com/assets/2EA4CFEBE53E4771B8A6E038BB47AF8A.pdf
The report went on to observe a perhaps unintended consequence of tuition support programs. These programs usually require students to maintain a certain GPA (e.g. B). So students will avoid harder courses, or drop courses to concentrate on a few where they can keep their grades up.
Recently on Japan television, I saw a show where the topic was robots. In one example, humanoid robots were working on a assembly line along with humans. These types of robots were doing amazing things like picking up tools to tighten assemblies or using power drills to drill holes, much like humans. The humans were there for QC.
Another point is in the environmental arena where the current administration just signed into effect a marine reserve off the New England coast. This was prime fishing grounds for many types of fish and shellfish. 5000 sq. miles if I'm not mistaken. The same is happening on the west coast too as well as sealing off land from logging and ranching.
https://news.cnrs.fr/articles/putting-humanoid-robots-to-work
Response:
I wholly endorse those comments. Granted, secular & policy trends have stagnated incomes. Chief among these in my opinion: “Trade Uber Alles” trade policies, open borders and (legalized-) corruption/bribery of the political class.. Mass automation will be another headwind.
That said, individuals are “captains” of their own lives. Pursuing worthless degree programs on borrowed money, marrying too soon (or too often !)– or choosing a poor life-partner, or having kids outside of the traditional two-parent household – these are often costly, life-effecting decisions. Succumbing to relentless distractions from real life -- of which spectator sports, the internet & chemical-dependency, are problems too. Choosing not to “pay one’s self first” is another bad decision. These decisions often can costs hundreds of thousands of dollars over a lifetime. -- and 'voila!' there are large chunks of the 'savings gap'.
Successive, contemporary generations seem to increasingly make poor, life-altering decisions, rather than following the “straight and narrow” path common in times past. It really is on each of us to “choose wisely” - or suffer the consequences.
If that “Fool” chart is correct, it amounts to a collective tally of those consequences. It’s the parable of the ant and the grasshopper, writ large.
C’est la vie.
http://krugman.blogs.nytimes.com/2016/03/15/return-of-the-undeserving-poor/
http://www.nytimes.com/2014/01/20/opinion/krugman-the-undeserving-rich.html
http://www.nytimes.com/2014/01/10/opinion/krugman-the-war-over-poverty.html
Let us count the ways things would improve nationally with UBI, for starters.