LightningDawg
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Scraping By on $250K/Year
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Independent
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The claim is that people making $250k "can barely get by". That's nonsense since the great majority of Americans make it on just a fraction of that amout. The word "rich" is like "tall". A 6'6" NBA player wouldn't consider himself "tall".
I'm sure that you know people that make that amount. I'll bet Bill Gates knows even more. If the 5% is right, then 450 people in your town of 9,000 would be in $250k families. That would be "a lot" of people, more than you can personally hang out with, but it would be consistent with the statistic.
The other 8,550 are living on less.
That was not my take away from the article. While the article was showing they "were getting by", or "barely making it"...my take away was...that in order to support a family of 4 in some locations and with what some might feel are necessities..whether it is due to both spouses working or clothes needed for jobs or educations because the public school systems (s..k)....plus all the TAX hits......this is what it took. And the life style is what some would have considered "on the high side of middle class" or "upper middle" ....30 years ago and ....even today.
On another thread...the theme is 7 million is now needed to have what equates to the 1 million 30 years ago. Why are salaries any different.?
My 9k 30 years ago should equate to $56K today but it doesn't. Salaries in general have not kept up with the cost of living....if you subscribe to the thought that you now need the 7 million.
And I suppose my major point...is the lack of conversation by our government or articles such as this... on what CPI has done to salaries over 30 years...and what that really means...and where those households truly are in the social strata.
And the people in my town making that are not considered rich. They are upper middle class, doing well, paying their bills, educating their children and trying to be independent in retirement.
I can't help what other people have been willing to accept in their lives. Nor am I responsible for the decisions they made. But all of this talk by our government is ...going to make us all responsible. There goes MY American Dream....
. The "other people are living on less" statement ...ummm....what is that about? All one can do in life...is take responsiblity for ones self.
BigNick
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I still don't get it. My work shirts go in the washing machine and then I iron them. (Well, just occasionally DW irons them.
) It would not occur to me to have someone else do my daily clothes washing for me, unless I was, er, rich...Independent
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Well, if the real concern is changes over time, then it pays to get some data on that. AFAIK, this guy has the best data series Emmanuel Saez's Home Page if you download the red "Updated to 2008" excel worksheet and do some looking around (unhiding the "Thresholds" tab), you'll find that in 1977 the nominal minimums for the 90th, 95th, and 99th percentiles of income were $26,934, $34,444, and $64,024. Those numbers, adjusted for the CPI, would be $87,765, $112,237, and $208,627 in 2008. But, the incomes actually required to get into those percentiles in 2008 were
$109,062, $152,726, and $368,238.
This says that upper income people gained against the CPI in those 31 years, and the further up the ladder the greater the percentage gain.
I think stagnant wages in the US are a real problem, but the people who didn't make progress were the median workers, the top earners made progress, and the very top is gained a lot.
Independent
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And the people in my town making that are not considered rich. They are upper middle class, doing well, paying their bills, educating their children and trying to be independent in retirement.
I can't help what other people have been willing to accept in their lives. Nor am I responsible for the decisions they made. But all of this talk by our government is ...going to make us all responsible. There goes MY American Dream....
The "other people are living on less" statement ...ummm....what is that about? All one can do in life...is take responsiblity for ones self.
If there's one thing we can observe about the word "rich", it's that most people use it to mean "someone who makes more than me, certainly not me". It's such a subjective term that it's meaningless.
You have a science background, I'd expect you to favor objective stuff. We can say with confidence that the great majority of Americans live on much less than $250k per year. People who think they are "just scraping by" on that amount certainly have an unusual definition of "necessities".
This post seems to say that the only reason people make less is "the decisions they made". If that's the case, then it's equally true that the only reason the $250k couple isn't earning $1 million is the decisions they made. Instead of explaining how they can't get by on $250k, they should make some different decisions and start making $1 million.
uummm... but that is not what I said. I said "about all one can do in life is take personal responsiblity" meaning...for oneself.
And I don't think...the article stated that the couple making $250K was "not getting by". It just showed how it was spent.
But given your ...analogy...it probably is or would be the personal decisions of those making $250K not to make the $1million. Perhaps they are not willing to spend all their time traveling, or go get that masters or PhD, or borrow that seed money to start their own company...or...etc. Are these not personal decisions
Likewise is it not a personal decision if one:
1. Decides to drop out of high school
2. Not to go to college
3. Had 3 children before age 20
4. Decided to do drugs or alcohol
5. Become a criminal
I know we can not control everything and some are dealt really unlucky cards
. Not talking about those situations. Just saying that at a basic level...the cumlative effect of all of our personal decisions...have a bearing on where we end up. No?
Yes, people's decisions have a large impact on where they end up.
It just gets a little tiring listening to people who were born on 3rd base talk about how great they are for getting to home, and how worthless all those lazy poor people are.
There are an awful lot of people from the lucky sperm club that talk endlessly about how they got there on their own.
My wife and I make about double the median income in the US. We've worked for what we have, but it has come a whole lot easier for us than for a lot of people I know.
Our tax burden seems very modest to me. We must be the only people in the country that aren't over-taxed
It just gets a little tiring listening to people who were born on 3rd base talk about how great they are for getting to home, and how worthless all those lazy poor people are.
There are an awful lot of people from the lucky sperm club that talk endlessly about how they got there on their own.
My wife and I make about double the median income in the US. We've worked for what we have, but it has come a whole lot easier for us than for a lot of people I know.
Our tax burden seems very modest to me. We must be the only people in the country that aren't over-taxed
Not necessarily disagreeing with you. But because I do have the science/researcher background as well as an Info Systems background...I like data that makes sense. Data without making sense "means little". It has to pass the reasonability test...right?
I get that there is all sorts of data out there to say those making $250K are in the top 5%. Guess who is providing the data? The government.
When the data...contradicts...my observations of the real world...then in my mind it is questionable. The real world says to me...that those at the $250k range...are doing extremely well....for that one year....but it doesn't make them "Rich".
For me...it still leaves out a critical element..and that is net worth.
Now...say to me...X is making $250K a year and they have a net worth of 1 to several million...and I would agree that is rich.
So...we come back to the income versus net worth argument. I suppose I'd feel better about what our government is doing if they would include a net worth element in the calculation. Why? Because...it prevents those that are striving to get there ....to get there. And that ..cuts into the American Dream.
All in my humble opinion.
I don't think anyone was saying that. But oh well....
I suppose I need to stay out of these discussions....because I thought we were discussing...on hypothetical levels....
Westernskies
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Yes, people's decisions have a large impact on where they end up.
It just gets a little tiring listening to people who were born on 3rd base talk about how great they are for getting to home, and how worthless all those lazy poor people are.
There are an awful lot of people from the lucky sperm club that talk endlessly about how they got there on their own.
My wife and I make about double the median income in the US. We've worked for what we have, but it has come a whole lot easier for us than for a lot of people I know.
Our tax burden seems very modest to me. We must be the only people in the country that aren't over-taxed
...uh, oh...it's getting so deep the pig is wearing boots this time!
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Thanks for that Independent. I'll take a look at these tables...
I suspect that your observations reflect a very selective portion of the real world.
If you make $250k/year or more, you very likely live in a neighborhood/town/state/part of the country that has a much higher income (and living cost) than the average.
If you live in New York City or San Jose, you might very well assume that $250k is not a ton of money. You would also think that it is normal to spend $500k+ on a home.
If you live in Benton Harbor, Michigan, or LaCrosse, WI, or Cinncinati, OH, you would think otherwise. I'd be stunned if more than 5% of my high school class earn more than I do currently. And I make a good bit less than $250k.
Those of us in fly-over country are generally stunned by the dollar figures earned and spent on the high-cost coastal areas.
If you make $250k/year or more, you very likely live in a neighborhood/town/state/part of the country that has a much higher income (and living cost) than the average.
If you live in New York City or San Jose, you might very well assume that $250k is not a ton of money. You would also think that it is normal to spend $500k+ on a home.
If you live in Benton Harbor, Michigan, or LaCrosse, WI, or Cinncinati, OH, you would think otherwise. I'd be stunned if more than 5% of my high school class earn more than I do currently. And I make a good bit less than $250k.
Those of us in fly-over country are generally stunned by the dollar figures earned and spent on the high-cost coastal areas.
Independent
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There's the "rich" word again. You want to define it based on assets, that's fine with me but the article says nothing about assets. It's talking about $250k income from a working couple and saying their financial life is tough, while ignoring the fact that the great majority of families get by on less than half that.
If you're saying that tax policy should recognize both income and assets, I'd say that's an okay idea. It's very unpopular with the people with assets.
In terms of data quality, I'll go with the gov't before I'll trust anecdotes from one person. In most cases, our personal contacts are skewed by our income levels.
Independent
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uummm... but that is not what I said. I said "about all one can do in life is take personal responsiblity" meaning...for oneself.
And I don't think...the article stated that the couple making $250K was "not getting by". It just showed how it was spent.
But given your ...analogy...it probably is or would be the personal decisions of those making $250K not to make the $1million. Perhaps they are not willing to spend all their time traveling, or go get that masters or PhD, or borrow that seed money to start their own company...or...etc. Are these not personal decisions
Likewise is it not a personal decision if one:
1. Decides to drop out of high school
2. Not to go to college
3. Had 3 children before age 20
4. Decided to do drugs or alcohol
5. Become a criminal
I know we can not control everything and some are dealt really unlucky cards
. Not talking about those situations. Just saying that at a basic level...the cumlative effect of all of our personal decisions...have a bearing on where we end up. No?
I earned more than the SS wage base for 31 years, but I never approached $1 million/year. If I had seen a way to make the million doing these things: "spend all their time traveling, or go get that masters or PhD, or borrow that seed money to start their own company" I would have jumped at the chance. But it takes a lot more than that to earn the million.
These all rate as bad decisions: "1. Decides to drop out of high school, 3. Had 3 children before age 20, 4. Decided to do drugs or alcohol (in excess), 5. Become a criminal". You don't really believe the median income worker in the US does even one of them, do you?
IMO, "Going to college" may be a good or bad decision. It's a good idea for most people in the top quintile of IQ, a bad idea for most people in the bottom three quintiles, and iffy for people in the second.
Certainly we have choices within the hand we're dealt, but we're not all dealt the same hand. I don't think the primary difference between the median and the top 5% is "decisions".
haha
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
If that is the data you choose to use that is up to you. It is certainly the data the government is using. That data came from the IRS and is in my opinion...not reflective of true income in this country. Take for instance...the farmer who lives a $250,000 + lifestyle....but pays little tax since he shows so little "income" on his tax return. That farmer would be in the median column or below in the governments tax table. But ...oh wait....there aren't any shades of grey in this are there?
But since this thread...is specifically about the article...rather than any side tangents...I'll try to keep it article specific.
ahhh.....not necessarily Hamlet. Actually live in a fairly rural area...with unemployment higher than the national average....so NO to your suspicion..about "my real world".
Please don't tell that to all the elementary school age children who are told...."the choices you make will have a bearing on what you become"..or something to that affect.
It may ...or may not be the primary reason. Don't think there has been a study on that...and even if there had been..it probably would not be statistically relevant. Too...subjective. BUT....certainly some uncalculated percentage towards this possibility....is...well....a possibility...is it not?
You are assuming that these people actually evaluate the decisions they make and consciously decide on a course of action. The reality is far far different. Most of these people are acting the way human beings have acted forever - they adapt to the environment and home in which they live. The live the expectations set for them. If you raise a child to think that killing and eating babies is ok, they too will kill and eat babies and see no wrong in that.
Katsmeow
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This is so true. Not everyone has the capability to earn $250k a year, let alone $1 million.
I think we do a disservice to young people when we try to tell people that they must go to college to be successful in life. Not everyone is cut out for or even capable of 4 year academic college. Many of those people are perfectly capable of earning a good living and having a happy and successful life as long as people aren't telling them that the only reason not to go to college is because your dumb or lazy.
Not assuming...and I agree with you. We are all a product of our environments, our experiences and our influences. But it seems to me...it is still a personal decision...albeit......either way it goes...to a certain degree.
Wasn't trying to debate that point at all.
Independent
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Please don't tell that to all the elementary school age children who are told...."the choices you make will have a bearing on what you become"..or something to that affect.
It may ...or may not be the primary reason. Don't think there has been a study on that...and even if there had been..it probably would not be statistically relevant. Too...subjective. BUT....certainly some uncalculated percentage towards this possibility....is...well....a possibility...is it not?
Sure, decisions matter. I could give you examples from my own life. That's why I wrote
but it's usually not 100% of one and 0% of the other. That's why I continued
If I'm raising children, I can't tell them to change the things that they can't control - that's impossible by definition. So I want to concentrate on the things they can control. But that doesn't mean I believe the things they control are the only thing that matter in the economic result.
I see decisions as somewhat non-symmetric. Any of us can get to $0 income entirely through decisions - just stop working. So there really is a 100% decision choice in that direction.
But most of us cannot get to $250k solely by good decisions (including the decision to work hard), virtually none of us can get to $1 million solely by good decisions, and some of us can't get to $45k (the US median) solely by good decisions. On the upside, the further you go the more you're going to rely on things you can't control.
