Middle Class in America
12
Middle Class in America? Wealth and Debt October 2013 John Connor Sanders Intermediate Business Finance Frank Anderson
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Transcript of Middle Class in America
Middle Class in America?Wealth and Debt
October 2013John Connor Sanders
Intermediate Business FinanceFrank Anderson
Summary I decided to run an analysis of the American
Middle class from 1980s to the present I used a distribution analysis involving
Homeownership Cost, Household Income, Occupational Score, Year, and Standard Deviation of Household Income *Sources IPUMS and BLS
I left out any real Household grossing more than $250,000 a year or less than $5,000 a year in 2011 dollars to focus on the middle income.
The Middle Class? Real Income Growth has been stagnate since the
1970s, however costs are rising.
“On Tuesday, however, the Census Bureau reminded me how for most Americans 1988 still looks a lot like yesterday: last year, the typical household made $51,017, roughly the same as the typical household made a quarter of a century ago.” – NY Times.
Most new jobs being created are retail and the high tech high paying jobs being created lack domestic workers with skills to fill them.
1980 Income Distribution0
.00
00
1.0
000
2.0
000
3D
en
sity
-20000 0 20000 40000 60000 80000Total household income
kernel = epanechnikov, bandwidth = 1.1e+03
Kernel density estimate
1990 Income Distribution0
5.0
00
e-0
6.0
000
1.0
000
15
.00
00
2D
en
sity
0 200000 400000 600000 800000 1000000Total household income
kernel = epanechnikov, bandwidth = 1.9e+03
Kernel density estimate
2000 Income Distribution0
5.0
00
e-0
6.0
000
1.0
000
15
Den
sity
0 500000 1000000 1500000Total household income
kernel = epanechnikov, bandwidth = 2.7e+03
Kernel density estimate
2011 Income Distribution0
2.0
00
e-0
64.0
00
e-0
66.0
00
e-0
68.0
00
e-0
6.00
00
1D
en
sity
0 500000 1000000 1500000Total household income
kernel = epanechnikov, bandwidth = 3.7e+03
Kernel density estimate
Changes in Income and Homeownership costs
Standard Deviation of Household Income
Another interesting thing to note is that the Standard Deviation of Household Income has increased since 1980, implying the poor (and middle) are getting poorer and the rich are getting richer.
House Hold Debt and Wealth?
“So why is this happening? It’s because America (most of the people reading this post right now) has become a nation made up of people in perpetual debt.” - Jason Cabler
Sources http://www.bls.gov/cpi/ Steven Ruggles, J. Trent Alexander, Katie
Genadek, Ronald Goeken, Matthew B. Schroeder, and Matthew Sobek. Integrated Public Use Microdata Series: Version 5.0 [Machine-readable database]. Minneapolis: University of Minnesota, 2010
http://www.nytimes.com/2013/09/19/business/americas-sinking-middle-class.html?_r=0
http://theeconomiccollapseblog.com/archives/what-is-wrong-with-the-u-s-economy-here-are-10-economic-charts-that-will-blow-your-mind
http://www.cfinancialfreedom.com/why-are-the-rich-getting-richer/
http://www.mintpressnews.com/study-shows-americans-falling-behind-the-world-in-skill-attainment/170342/
