http://bigpicture.typepad.com/comments/2008/08/surpise-income.htmlWages have been relatively stagnant (or lower) since 2000. Recently the AVERAGE wage (this is important) has returned to 2000 levels, and average income has passed 2000 levels. AVERAGE... it's a combination of all income earners and all wage earners, no matter how much or how little.
The problem with average is that if you have 10 people, and 9 of them make no money at all, and the tenth one makes $1 million per year, the AVERAGE wage is $100,000 per person. Obviously the 9 dead-broke suckers don't agree with that assessment of their wage. A far, FAR better measure is MEDIAN wage, which in this case would be
zero, even with one guy making a million bucks. If you said the median wage was zero, those 9 guys would all look at each other and go "yeah, that sounds right".
But... increases in average wages and income are still good, someone, somewhere is making more money and spending more money. But notice who it is:
"
Total income increased by $619.2
billion or 8.3 percent, all of which went to those making more than
$75,000, and 42 percent of which went to the roughly one in 400
taxpayers who made more than $1 million in 2006."
(I'm never clear if these statistics correct for married couples filing jointly or not. I assume they do.)
This is further evidence... not that "the rich are getting richer" like it's some kind of sin... but that those with the most advanced and in-demand skills are the only ones making more money and getting more spending power. The "average" Joe who doesn't really know how to do anything is stagnating while prices for raw materials (read: gasoline) go up and up.
It's also good to note that wages have not exceeded 2000 levels yet, but INCOME has. It reinforces my view that the way to prosperity is a combination of growing your skills to command a higher wage, and SAVING some of that wage to add income over time. It's the combination of those two things that results in long-term wealth.
I also found it astounding that ONE in FOUR HUNDRED taxpayers make more than $1,000,000 per year. So every four hundred people you see, every four hundred cars, every four hundred houses, one of those guys makes a million bucks per year. Now I know why I keep seeing so many luxury cars and Freshmen on campus in BMWs and Corvettes. In Houston there must actually be fairly large numbers of people who can legitimately afford great cars even if their kids are dumb as dirt and stuck at UH.
That explains a lot, actually. Makes me feel like it's possible for us eventually too. Maybe the American dream isn't completely dead after all.
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