Are the poor getting richer? According to this Treasury Study they are.?

Question

http://www.treas.gov/press/releases/reports/incomemobilitystudyfinal.pdf

Please look at Table 3 of the linked Treasury Dept study on income mobility. They took a look at the tax returns of people over 25 years old in 1996, and the same people again in 2005. They measured their income group by quintiles, and converted all income into 2005 dollars to factor in inflation.

Here's what the study found:
The poorest 20% had their "real median income" go up by 90% from 1996.. The middle 20% (middle class) had their real median income go up by 23%. The richest 1% had their real median income decrease by 25%.

How can this be? I thought the liberals and mainstream media were telling us the poor are getting poorer while the rich are getting richer? Could they have been wrong?

And please don't blame this on inflation, as I have mentioned, inflation has already been factored in and we are discussing REAL GAINS and LOSSES.

So for those of you who still complain, what you are saying is "A 90% improvement doesn't count!"

Sorry. I just don't buy that, no matter how you want to spin it.

ARGH! Noah. What part of inflation adjusted do you not understand? It means the people in the study took inflation into account, and what they are reporting is REAL GAINS or LOSSES, after inflation. Not Excluding inflation. An example: if I made 50k in 1996 and 100k now, but inflation went up 50% in that time, then my Real Gain is $25k. Again, Real Gain being defined as After inflation. That takes into account higher Housing, Energy, food costs, etc.

Answer 1

do you realize how little money the "poor" make. if their income increases by 90%, it's not as big of an increase as it sounds.

if they made 10,000 a year in 96, it's be 19,000 in 2005. big jump? not at all.

by the way, in 1996 america was still hurting from the awful supply side economics consequences that the clinton administration was just beginning to mend. seeing as reagan and bush sr. gave the rich huge tax breaks, it would make sense the the proportion of income for the poor has been on the rise since those years.

Answer 2

hmmmmm:

As often as I use economic data from Government websites to support my argument there is something you should know.


Data can be manipulated to lie.

The current SCHIP argument was a perfect example of this where Congress defined "middle class" by using median income from a BEA study (125K) and the IRS defines "middle income" using the curve modality from census data (36.5K). Democrats fiddling with numbers again. Someone should make them go back to grade school.

If we yank the data from Census, 1995, we find 11.5 million people making between 15K and 17K.

If we yank the data from Census, 2006, we find 11.8 million people making between 15K and 17K.

Now I really do not consider 300,000 people a significant increase. I believe it is probably within the range defined by standard deviation.

Recognizing that we can also review the amount of inflation and make the argument that this Treasury study is FOS (full of something), which the Demophytes (pathological growth on humanity) constantly do.

I believe the study results in a net NO CHANGE from 1996. The poor are not getting poorer and the rich are not getting richer.

This is stagnation and is itself a bad thing, YET:

The economy is better than what Clinton left us with.

The Clinton 2004 budget guaranteed a budget shortfall even before 9/11 and Katrina so the deficit is understandable. Clinton left office with an economy producing a negative GDP. You can spell that recession.

What is amazing is that the Republican Congress and President Bush managed to climb out of the Clinton recession so quickly and produce an economy that has held it's own during some of the greatest crisis in the history of the United States.

Look at the deficit spending during war years by Democratic presidents, especially in WW1 and WW2 if you want to be amazed!

Our gasoline is about three times "normal", Katrina, 9/11, the war on Terror and a previous administrations poorly planned budgets BUT for the last six years the United States has held it's own.

With a Democratic Congress expect economic disaster. There is no way the Demophytes in Congress will continue President Bush's economic policies and that spells recession.

Answer 3

In terms of purchasing power the American wage-earner is at best staying stuck well behind the wave. Let's be real. In 1996 I sold a house for $250,000 dollars.....only three years later the same house sold for just under half a million. The point here is that housing costs a lot more out of paycheck...so do groceries...so does energy..so does insurance...so does health care....you name it, it cost more than any increase in median income. Real 'median cost' excluding inflation has advance far faster than 'real median wages. And what does 'median income' mean anyway? Half are below that line and half are above, but even those 'above', unless they're way above are getting buried....those 'below'....God bless 'em! You can go on fighting for the 'rich' if you want, I suppose you have a reason...but in real life being an American wage-earner has never been a picnic....but for a lot of hard working honest and decent Americans it's a 'cheese sandwich' at the Rescue Mission and all the numbers don't mean a thing to real people. Money talks and you know what walks!

Answer 4

With my eyes, And they're laughter or pain. I can close them, and hear them, and know the difference. How do you Frank Texan? I could take a guess, But id rather hear it from you. All the pasting in the world wont change the facts. You have so soul. Im ashamed to be in the same state. Numbers guy.

Answer 5

I was poor in 96 and I'm MUCH poorer now, the vast majority of my friends have had the same experience so I'd be willing to bet that what is inflating those numbers is formerly middle class people who are now "underemployed" you know people who were making 150K 5 or 6 years ago and who are making 20K now...

Answer 6

You know the old saying, "it takes money to make money" and its always been true and it will always be true. If anything the Bush tax cuts really helped the rich and hurt the poor. The middle class by the way is going to continue to evaporate like water in the Florida sun if this continues.

Answer 7

I am part of the getting richer group. Hard work with responsible spending and investing habits is working for us.

Answer 8

The economy grows. There still is a ridiculous gap between rich and the poor, and there are many people who have money and don't deserve it, and there are those who don't have money yet work as hard as they can.

Answer 9

How's the weather in "opposite land"?

Your icon shows why you would have a vested interest in claiming such drivel...

Answer 10

they will think of some reason to whine.