
50% of All Workers Made Less than $26,000 in 2010 - diogenescynic
http://www.theatlantic.com/business/archive/2011/10/50-of-all-workers-made-less-than-26-000-in-2010/247059/
======
aasarava
The actual raw data is here: <http://www.ssa.gov/cgi-
bin/netcomp.cgi?year=2010>

My first thought was to think, Wow this really provides a strong
counterargument to people who keep touting the fact that 47% of US citizens
don't pay any income taxes (other than FICA). Also I was shocked to see that
"The 1%" included essentially anyone making over $200K. [edit: i originally
made a mistake and said $100K]

But in looking more closely, I can't tell if the numbers are based from
individual W2s (meaning a single individual with two jobs might contribute two
separate data points), on individual taxpayers, or individual tax filings
(maybe a family).

I suspect it's one of the first two. And if that's the case, these numbers
can't directly be applied to stats about poverty levels or the "99%" and the
"1%" and the "47%" figures being slung around these days.

For instance, these numbers include part time workers, such as teenagers with
after-school jobs. At minimum wage, working 4 hours a day for 6 days a week
for 50 weeks, this person might earn ~$8K.

So it's likely that some part of that first 25% on the chart are part-time
workers.

That's not to say that there aren't some families doing everything they can to
make just $8K in a year, but rather that the percentages would sound different
if we built the chart using only data from tax returns (not W2s) and stripped
out everyone who was not attempting to work full time to support themselves or
a family.

Can someone provide insight that would either debunk or validate my
assumptions above?

~~~
onedognight
> Also I was shocked to see that "The 1%" included essentially anyone making
> over $100K.

It looks like it's anyone making over $200k not $100k if I'm reading it
correctly.

~~~
hugh3
Also, that's wages, not income. Most truly rich people (and a great many
fairly rich people) derive their income from non-wage sources.

------
rmah
To those who say "someone can do two jobs and make more" and such... These
stats are compiled on SSN basis by the Social Security Administration. Thus, I
think they include any number of jobs a person may hold at any time over the
course of the year.

Further, this data does not include dividends, capital gains or interest.
Should be fairly obvious which end of the curve gets the lion's share of that.

~~~
dextorious
Actually most middle class Americans, and basically all Americans in IT jobs
commenting on the web, have no frigging idea of how the "other half lives"...

~~~
dextorious
Besides checking being poor by yourself (which will come easy for a lot of
people in the current economy), and/or hanging around poor neighborhoods and
making friends, I recommend "Nickel and Dimed" by Barbara Ehrenreich:

<http://en.wikipedia.org/wiki/Nickel_and_Dimed>

A small road trip in South Dakota, Mississippi, Alabama et al would also be
insightful.

------
MrWestley
So with all of this top x% talk that is going on I decided to see where I was
on the scale. It was pretty pathetic. Not because I was low on the scale but
rather very high. I don't consider myself to be very wealthy at all. Don't get
me wrong I am doing well for myself. I worked hard to get what I have and I am
good at what I do, but I should not be in the top 3%. I am not trying to brag,
I think it is stupid and wrong that I am that high up on the scale. I'm not
saying I earn too much (I am actually underpaid according the the industry i
am in.) It is just that I can't believe that others are being paid that much
less.

~~~
geogra4
The incredible wealth disparity in this country is quite disturbing. And one
look at the data confirms that reality. Half of workers barely make enough to
get by. And I assure you that a very large portion of those making under the
median probably get poor benefits/heathcare (if they get them at all)

~~~
hugh3
The real problem is that there's a huge disparity in _talent_. The worst of us
are worth a whole lot less than the best of us. The question is: what do we do
about that?

~~~
williamcotton
None of my talents matter if the office building I work in wasn't maintained.

None of my talents matter if the electricity that powers the servers I need
wasn't generated and the systems of delivery weren't maintained.

None of my talents matter if the roads and public transport I rely upon to get
to work weren't maintained.

None of my talents matter if the hardware I work with wasn't assembled and
quality checked.

Etc, etc.

~~~
hugh3
Sure.

But if someone is earning $26K a year, then this means that their labour isn't
worth any more than twenty-six thousand dollars to anyone else. Money is,
after all, a medium of exchange, and if your labour is only worth $26K this
means you're contributing _very little_ of any value to society... barely
enough value to account for the baseline amount of wealth (food etc) which
every one of us destroys each year just in order to stay alive.

People who only make $26K a year need to take a good hard look at themselves
and say "How can I make the value of my labour higher, so that I'm
contributing more than a minimal amount to society?" If they'd start thinking
about the problem in the right way, they might be able to solve it.

~~~
hackinthebochs
> If someone is earning $26K a year, then this means that their labour isn't
> worth any more than twenty-six thousand dollars to anyone else.

This is trivially true.

>if your labour is only worth $26K this means you're contributing very little
of any value to society

This is way, way wrong. This is a very pervasive error in reasoning. Just
because someone is only willing to pay X amount for your labor, doesn't mean
that labor is _worth_ X amount to society. When there are a lot of people
willing to perform said labor, that pushes down the monetary value of that
labor. _This is completely independent of its value to society._

If I knew some magic incantation that would cure cancer, this action would be
invaluable to society. But if I taught 1 million people how to perform it, the
cure for cancer's value to society does not decrease.

The problem is that people conflate value in the moral sense with monetary
worth. Thus when someone's labor can only bring in 26K a year in the
marketplace, somehow its seen as a moral failing on their part. It serves to
transfer the burden of finding a place in society completely on the
individual, instead of where it belongs; on society as a whole.

~~~
prodigal_erik
By the time a million people have learned the incantation, the value of
teaching it to one more person is much lower, because it was already pretty
easy to find one. No matter how important the labor is, at some point we have
enough people doing it, and the pay is supposed to be a signal that attracts
people to other needs which aren't being met.

~~~
hackinthebochs
No argument from me there. But this is where I think the burden is also on
society, not solely on the individual to reinvent themselves to find a niche.
The purpose of society is to manage scarce resources. No one has a "right" to
more resources than the next guy, simply because he has a particular skill. It
is society that sets up the environment for these vasts imbalances of
distribution, where an 'arbitrary' skill can reward you with vast amounts of
wealth. Thus it is the burden of society to create mechanisms to balance this
distribution.

Capitalism is preferable because it can manage resources better than any
central planning can (at least pre-strong AI), but since imbalance is inherent
in capitalism its also imperative to provide opportunities to mitigate
imbalances within the system, in the form of education, skill training, etc.

------
beej71
Some 30% of Americans have a Bachelor's Degree or higher.

According to the Census, the median income for people with a Master's Degree
is $54K (for ages 25-64), while those with only a High School diploma get
$22K.

We need to improve our education situation 15 years ago, IMHO.

Edit: I'm going to edit this because people seem to think I'm suggesting a
causal relationship here. I'm not. People with Master's Degrees tend to be
highly trained in their field. It's not particularly surprising they tend to
earn more.

If you invest the time to make yourself less replaceable, you will earn more
money.

~~~
sp332
Statistics like this just encourage people to spend lots of money on useless
degrees that will take a long time to pay off. (I know some of these people.)
I doubt a philosophy degree will get you more money anywhere other than as a
philosophy professor.

~~~
beej71
If they were educated properly, they'd know better before they got to college.
Again, IMHO.

~~~
sp332
It's not in the education system's best interests to tell you not to get a
higher degree. Anyway, many of the teachers you'd ask probably get hired
because of their degree, so even if they give you an honest answer, they're
incredible biased.

------
rauljara
I do think that looking at all workers is a valid metric of how we're doing as
a nation, but it is important to remember that all workers does include those
working part time. It is a valid metric because there are many people out
there who would like to be working full time who are not, but it can be
misleading because it sort of looks like everyone took a pay cut. But that
isn't the case. Some people took a pay cut. Some people had their hours cut.
Some people got laid off and could only find a part time job to replace their
full time job with.

~~~
rdtsc
> Some people took a pay cut. Some people had their hours cut. Some people got
> laid off and could only find a part time job to replace their full time job
> with.

At the end of the day that still looks like a collective pay cut. Some took a
part-time pay cut, some took a paycut down to 0.

From what I hear from people working in retail (I am sure it is true for other
places as well), employers are cutting everyone to part time hours so they
don't have to pay benefits. So people find 2 part time jobs to make ends meet.
They effectively work full time and more , but now they don't have health
benefits. First trip to the hospital and it is all over, they can't get out of
dept, ever.

~~~
rauljara
Wouldn't disagree with you at all.

------
Alex3917
It's a lot scarier once you realize that only 45% of Americans are workers.
What this actually means is that 87.5% of Americans are earning less than
$26,000.

~~~
krschultz
But a good number of them are 0-16 so are entirely unable to work, and many
others are over 65 and are unlikely to work.

------
jshort
I'd like to see this data over a longer time period. Or compared to a similar
time span around the Great Depression. Similarly, I'd like to see data on a
global scale. I'd imagine the gap is continuously widening. Markets constantly
shift, this may be a second re-adjustment from the dot.com bubble, just the
"99 percent" are adjusting as the 1% goes the other way.

~~~
justincormack
No the gap is not continuously widening everywhere. It rises and falls a lot.
There is one measure and a historical chart in this article.
<http://en.wikipedia.org/wiki/Gini_coefficient>

------
protomyth
This is one of those charts that is great for grant writing (if you get your
local area data) or making a point in an article, but doesn't really tell you
the whole story. It doesn't list all the income and really doesn't give you a
real picture based on family make-up. Don't get me wrong, its useful data, but
it can be used in a very poor manner.

------
thurn
These figures are interesting, but you really need to take into account cost
of living to get an accurate picture of poverty. $26,000/year would barely
cover my rent for a tiny one-bedroom apartment in San Francisco, whereas in
other places, it's enough to live somewhat comfortably.

~~~
spenrose
More on this topic:

<http://www.selfsufficiencystandard.org/>

It's bad out there. Most people live lives of quiet desperation.

~~~
spacehaven
Judging by the hordes of people on the streets with signs, desperation doesn't
sound so quiet lately.

~~~
tomkarlo
"Hordes?"

15% of the country lives in poverty.
([http://www.nytimes.com/2011/09/14/us/14census.html?pagewante...](http://www.nytimes.com/2011/09/14/us/14census.html?pagewanted=all))

Imagine what it would look like if 1 in 6 people took to the streets. 50
million. That's a horde.

------
smattiso
This is only for income reported on a W2, i.e. employees. So the "top 1%" is
the top 1% of individuals paid by a company, not the actual owners themselves
(although I suppose they could be the same). The top 1% include a ton of
business owners.

------
dlsspy
I am the 50%

------
Shenglong
Here in Ontario, minimum wage is $10/hour. Assuming you work 9 hours a day, 6
days a week:

10 * 9 * 6 * 52 = $28,080 / year

No, I don't think 54 hours / week is too much to ask. I'm sure most people
making over the 26k probably work more than that. Yes, I know this is Canada,
but it's just an example.

~~~
tseabrooks
You mentioned your numbers are for Canada but I'd like to point out some
things about the US.

8 hours a day is the norm here. A lot of the minimum wage workers (lower than
10$ an hour) work even fewer than the 40 hours that would constitute full time
as a way to reduce businesses supposed obligation to cover healthcare / 401k /
etc. I've seen in my experience many workers get cut off between 35 and 38
hours in a week to avoid this.

I would anticipate that very few people, less than 5%, of people making over
26k in the US work more than 54 hours a week... It just isn't done that way
here.

~~~
Shenglong
It's the norm here in Canada too. There's a trade-off you need to make though,
between making a lot of money, and making little.

My father worked three jobs when I was growing up, to support our family. He
never complained about wealth inequality; he just did what he had to. Sure,
it'd be nice if everyone got paid a lot of money - but since that's never
going to happen, people might need to adjust what the norm is.

------
protomyth
going to the linked pages, I find this part a little more interesting
(National average wage index):

    
    
      2006	38,651.41
      2007	40,405.48
      2008	41,334.97
      2009	40,711.61
      2010	41,673.83

~~~
tomkarlo
The average is frankly, fairly uninteresting given what the distribution looks
like. It's not a "typical" income, or the 50th percentile. It's just basically
the sum of income divided by the number of earners.

Reminds me of the old saw about how when Bill Gates walks into a bar, everyone
turns into a millionaire, on average.

~~~
protomyth
Well, I was interested because 2009 is the only dip year in their data. The
distribution data is not as interesting to me given what they ignore in income
and location.

~~~
tomkarlo
Yeah, but you don't know if it's a dip because the typical person made less,
or the richest 1% made less. Given that 2009 was a recession, you'd expect
average to be down either way (since population didn't change appreciably.)

That's the problem with averages.

~~~
protomyth
That's the thing though, it is the only dip in their data. I am really curious
how other recession periods didn't have the dip.

~~~
tomkarlo
Could just be a timing issue. Recessions are measured on quarterly
performance, this is annual. So you could have two quarters of negative growth
in a row (a recession) and still have overall positive growth for the year.

Also, wages/employment are sticky because of the friction in changing them...
companies will generally change comp slower than the change in sales (in both
directions.)

------
shazam
Not to take away from the point, but I'm always initially skeptical of
statistics.

For example, this is also true:

50% of all taxpayers make less than the median EVERY DAY

~~~
scarmig
An actually interesting statistic: two thirds of workers make less than the
average every day.

That should disturb you, especially in comparison to that stat decades ago.

------
hugh3
These numbers seem implausibly low. How are they derived?

It says they come from W-2 filings. But do they bother to match up different
W-2 filings from the same person? i.e. if I work two part-time jobs, are those
added up? Or even if I switch jobs part way through the year?

Of course it doesn't include income from non-work sources (investment income
etc), though that shouldn't change the median that much since people in the
lower half don't have all that much in passive income.

Of course it doesn't include tips either (or it _can_ \-- reporting of tips on
W-2s is, as I understand it, complicated and whatever the law is, it isn't
followed).

~~~
tsotha
Why do they seem low? $26k is $13/hr for someone working full time. There are
a whole lot of people making less than $13/hr.

~~~
thret
The legal minimum wage in Australia is $15.51, about $16 USD. I realise
Americans are poor, but I had no idea it was so bad.

~~~
yummyfajitas
Don't feel bad for us, there are lots of places where things are worse.
Australia, for example.

[http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_...](http://en.wikipedia.org/wiki/List_of_countries_by_GDP_\(PPP\)_per_capita)

<http://en.wikipedia.org/wiki/Median_household_income>

Adjusting for PPP, your $16 USD is only about $11.40. Australia is
considerably more expensive than the US.

~~~
thret
Actually Australia has the highest median wealth in the world.

[http://au.ibtimes.com/news/234393/20111020/forex/australia-d...](http://au.ibtimes.com/news/234393/20111020/forex/australia-
dislodges-switzerland-as-wealthiest-nation-in-the-world.htm)

Not sure why you think Australia is more expensive than the US. I visit the US
every year and do not find this to be the case at all.

