Who’s Rich? The Data
Apparently the question of how much money you need to make in order to qualify as rich came up last night at Saddleback. Phil Klinker chimes in with some data:
—In 2006, the median household income was $48,201. That means half of all households made less than this amount and half made more.
—For family households, the median was just shy of $60,000. For married couples households, the median was $69,716.
—Households making over $133,000 were in the 90th percentile.Households making over $174,000 were in the 95th percentile. This means that Obama’s line of $150,000 probably hits the top 7-8 percent of household incomes.
—The data on those making above McCain’s line of $5 million dollars aren’t readily available, but those making over $1.6 million are in the top 0.1 percentile (that’s the top one-tenth of one percent). Overall, there are only 146,000 households making over $1.5 million and only 11,000 with incomes over $5.5 million.
A couple of additional points. It’s probably useful for these purposes to distinguish between retired and non-retired people for these purposes. As in other wealthy societies, a pretty large chunk of Americans are retire and retired people tend to have lowish incomes. This drives down median income and creates a situation where most employed people are above average. A second point is that non-citizens (immigrants) and many ex-felons aren’t allowed to vote. People in these categories tend to be poorer-than-average. On top of that, low-SES people vote at lower rates than high-SES people. Consequently, the electorate is substantially higher-income than the actual population, and other measures of political influence (especially, but not by any means exclusively, including campaign contributions) are highly skewed toward high-SES people.
Beyond all this, it’s my strong sense that people probably have considerations of wealth rather than income in mind when they think about who’s rich. Someone “earning” $90,000 a year out of his trust fund (a “trust-fund scumbag” to coin a phrase) while not participating in the labor force is richer than someone earning $115,000 a year at a law firm while paying off college and law school loans.
64 Responses to “Who’s Rich? The Data”
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August 17th, 2008 at 10:46 am
I think McMaverick tossed out that $5million earnings figure because that would allow many of the teevee preachers to claim they are just regular folks, not rich.
August 17th, 2008 at 10:51 am
I don’t think it makes any difference whatsoever if you have a trust fund, Matt. But I do have to say that your bringing it up makes me curious.
Preemptively– screw off, Petey.
August 17th, 2008 at 10:58 am
There’s a problem with having such a “line” in the first place. This blunt-instrument approach to who’s “rich”/who isn’t completely leaves out local variations in cost-of-living (and taxes). $150k *in Manhattan* doesn’t go nearly as far as $150k in most of the rest of the country; to consider both persons “rich” is the epitome of simplemindedness or ignorance.
August 17th, 2008 at 11:08 am
I don’t think it makes any difference whatsoever if you have a trust fund, Matt. But I do have to say that your bringing it up makes me curious.
I have to disagree. The economic value of a trust fund is understated by the cash flow. The timing, security and opportunities it provides does make it qualitatively different.
August 17th, 2008 at 11:22 am
Beyond all this, it’s my strong sense that people probably have considerations of wealth rather than income in mind when they think about who’s rich.
Yes, yes, yes. The very definition of rich has to do with wealth, not income.
This also makes it a more intuitive discussion. If your net worth (including house, cars, retirement assets, etc., less all debts) is over $5M, you are rich.
August 17th, 2008 at 11:34 am
right beats me to it: the whole point of “rich” is wealth; otherwise, the relevant term is “high income.”
and, of course, there are people with lower incomes who save and invest wisely and achieve a higher net worth than people with higher incomes who, in fact, spend all they make and then some….
August 17th, 2008 at 11:47 am
I find this whole redefinition of rich as being defined in terms of income rather than wealth to be bizarre.
As many have noted, cross geographic and cross age cohort income comparisions are pretty meaningless.
If I were a cynic, I’d think this was a ploy on the part of the rich: those with wealth are a well-defined group with clear interests, while high-income and potentially high-income earners are a more diffuse and ever-changing set of people.
Heck, you can even let those middle class folks accrue wealth tax-free via 401Ks: just remember to tax it eventually as income. Nice.
August 17th, 2008 at 12:05 pm
Matt,
Just to make one thing clear: you realize, right, that McCain’s $5mm figure was a joke? He said right afterward, to laughter, “I’m sure that comment will be distorted.” Interestingly, you and McCain also seem to agree on your last point; he mentioned the silliness of considering a small business owner who works 16-hour days “rich” because of some arbitrarily chosen income level.
August 17th, 2008 at 12:10 pm
“a “trust-fund scumbag” to coin a phrase”
Out here in San Francisco, where this is not an uncommon breed, I call them Trustafari.
August 17th, 2008 at 12:12 pm
While “high income” and “rich” are different terms and mean different things, they are strongly intertwined. The basis for differentiating between them almost always involve Manhattan, or LA, or SF, or some other large city where people who make a lot of money live (and are rich FWIW). Warren Buffet lives in Omaha, and there are other rich folks who live in less-than-metropolitan areas, but they are rare. There are rich farmers, but not many. The types of jobs and occupations (as in, opportunities to play with money) exist in cities for the most part. As a result, cost of living and other factors are inherent in the idea of being rich. Making $150,000 in Manhattan might make you relatively modest compared to your peer group, but the simple fact of the matter is that you can’t make $150,000 doing what you do anywhere else. That especially includes law and finance jobs. Any other occupation will most likely pay a lot less anywhere else as well.
Shorter point….$150,000 a year is indicative of wealth, richness, and everything else, especially if the only locations you can make said amount of money is a first or second tier city, which is generally the case.
August 17th, 2008 at 12:31 pm
abject funk:
“Making $150,000 in Manhattan might make you relatively modest compared to your peer group, but the simple fact of the matter is that you can’t make $150,000 doing what you do anywhere else. That especially includes law and finance jobs. Any other occupation will most likely pay a lot less anywhere else as well.”
Exactly my point. Thus, an income of $150k in Manhattan is more comparable to an income of [something less] elsewhere. And this is reflected in the differing cost-of-living.
“Shorter point….$150,000 a year is indicative of wealth, richness, and everything else, especially if the only locations you can make said amount of money is a first or second tier city, which is generally the case.”
This is backwards. If the only place you can earn $150k is in Manhattan, you’re not as “rich” as that raw number $150k seems to indicate. For example, you’re not as “rich” as someone who could earn $150k+ anywhere, for example places with half the cost-of-living.
August 17th, 2008 at 12:42 pm
I don’t think we disagree here, SC. I cannot think of a job where you can make $150,000 a year regardless of where you live. If you live in NYC and have job X, you will make more in NYC than having job X someplace else. And, as a bonus, you will live in NYC.
For most folks with higher incomes, living in or near cities is desirable. There is more stuff to spend your money on and invest in (such as real estate, though your mileage may vary these days). I think the main point is that, yes, $150,000 a year in Manhattan may mean a simply reasonable lifestyle (as opposed to a rich lifestyle), but comparing $150,000 in Manhattan to $40,000 in Omaha is not meaningful. No one in NYC would make the trade despite having a lower cost of living in Omaha, not because Omaha is a bad place, but because Omaha doesn’t have the things that NYC has. Also, aside from certain professions (law and medicine come to mind), there are certain areas of the country where a person needs to be in order to do what they do, and almost all of these high paying jobs are in cities with high costs of living.
If you make $150,000 and live in NYC, you are rich. Same is true in any other American city. You may not have a house, yard, fancy car, or other stuff, but you are still rich, as you can actually live in your city and have a good lifestyle. Most people can’t claim that. If you make $150,000 and commute an hour to the city to you job, I would be open to the idea that you are not rich, but merely wealthy (and made some decisions that emphasize space and home ownership as opposed to location).
August 17th, 2008 at 1:17 pm
Hmm, I do somewhat agree with abject_funks point. $150K is pretty crappy for a family of 4 in Manhattan, but in many ways they do get to live a rich lifestyle. Sure, small apt, no car, etc, but they are in one of the cultural centers of the universe (broad culture, as in cuisine, diverse, educated people, museums, art, work and leisure opportunities, etc.)
That said, that family falls off the rich treadmill pretty fast if the primary wage-earner’s situation changes. That is quite different from the asset-rich person who lives in Manhattan, and very different from the asset-rich person living in the middle of nowhere.
August 17th, 2008 at 1:27 pm
It is one of the bizarre pleasures on these ‘liberal’ sites that people fall over themselves to claim that $150,000/year incomes are not the rich, particularly where discussions of taxation are concerned.
August 17th, 2008 at 1:31 pm
Obama defined “rich” as people over $250,000 income (presumably AGI), who would experience some modest tax increases (+5% in dividend and cap gains rates and marginal income rates back to the pre-Bush tax cut levels of 37.5 and 39%, I beleive. That is per his website.) He said $150,000 and below was “middle class.” From this I infer that he would consider $150,000 to $250,000 “upper middle class”, which is how people in that category probably think of themselves (but I wouldn’t know personally).
August 17th, 2008 at 1:34 pm
If you are an oilman in Texas who is not as dumb as Bush, you can do it. Wal-Mart is based in Arkansas. You can definitely bring in 150K a year running a regional chain in areas of the country with very few cities.
When my family lived in Southern California in the early 90’s, my dad was making six figures and we could barely afford to pay the rent on our small rental with no air conditioning while also driving crappy cars and sending us to public school. We in part got by because local restaurant owners would give us free stuff because they thought my sister and I were cute kids. We weren’t starving, but the high cost of living meant we definitely weren’t rich.
August 17th, 2008 at 1:40 pm
abject funk
“I cannot think of a job where you can make $150,000 a year regardless of where you live.”
Certain specialties of medical doctor come to mind. But ok, maybe not “regardless”…I mean, there has to be *some* sort of population base
“If you live in NYC and have job X, you will make more in NYC than having job X someplace else. And, as a bonus, you will live in NYC.”
This is a bonus? Even if it is, you pay for it in terms of higher rent, smaller living conditions, poor weather, crowds, smells, etc. So if anything it’s a wash. This is the whole point. The higher amount you can make in NYC as opposed to elsewhere is, at least to some extent, compensation for having to live in NYC – and pay higher rent, in smaller places, etc. If it weren’t, people wouldn’t do it and the salaries would have to be even higher.
“No one in NYC would make the trade despite having a lower cost of living in Omaha, not because Omaha is a bad place, but because Omaha doesn’t have the things that NYC has.”
It would all depend, wouldn’t it? I can think of a broad range of jobs and salaries that would induce me to move to Omaha. You are correct to point to tradeoffs. The $150k is a tradeoff. Taking this tradeoff doesn’t make someone *richer* just because the raw number is higher. They give up things to make this tradeoff. That’s why they call it a tradeoff.
“If you make $150,000 and live in NYC, you are rich.”
I disagree.
“You may not have a house, yard, fancy car, or other stuff, but you are still rich, as you can actually live in your city and have a good lifestyle.”
Okay, so your definition of “rich” is “can actually live in your city and have a good lifestyle”.
By this definition almost all Americans are rich. Conversation over, I guess.
August 17th, 2008 at 1:51 pm
Who is making $150k/yr in New York City who is not able to make a comparable amount of money elsewhere? Who is living in Manhattan because he or she is unable to live in Queens, Brooklyn, and NJ, and would have to give up that income by living in those alternative places?
August 17th, 2008 at 1:55 pm
I thought the answer to this question was obvious. A rich person is someone who can easily afford all of the things I want but can’t afford.
If you are looking for an objective definition, it seems like you have two options: a rich person is someone who can easily afford the necessities of life and several luxuries on top of that. By this definition, the majority of Americans are rich. This seems reasonable to me.
If you want rich person to mean “upper class,” though, it’s no good calling most Americans rich. So you need to define a rich person with more spending power than the majority of his or her fellow countrymen.
August 17th, 2008 at 1:56 pm
Tyro,
Obviously it depends on one’s field, but I suspect the typical person who makes $150k in NYC probably could not make that same amount elsewhere. The person who is in finance for example.
People who live in Manhattan because they work in NYC could presumably live in Queens, Brooklyn, or NJ and not give up their income. What they would (in most cases) give up would be *time*, in the form of an increased commute, and giving up time makes one less-well-off just as much as if one took a pay cut.
In fact, what this discussion really points out is simply that one’s numerical income, by itself, is really a poor means of measuring one’s wealth in the first place.
August 17th, 2008 at 2:01 pm
By this definition almost all Americans are rich.
This conversation is so amusing. Nobody here, it seems, wants to be considered “rich,” because we lefties are supposed to demonize them, right? But then again there’s this web site. I just punched in my income, and was informed that it put me well into the top one percent of all people in the world. Believe me–those of you who cry poverty over a mere $150,000 a year are well ahead of me on the list–to say nothing of some indigenous Guatemalans I know.
August 17th, 2008 at 2:05 pm
Tyro, I would asssume that when they mention New York City, they are including the metro area – northern NJ, Long Island, So CT, Westchester – lots of $150k+ jobs are not within the NYC city limits. Many of the mega buck Wall Streeters don’t live in NYC anyway.
August 17th, 2008 at 2:06 pm
Reality Man, I’m sorry to be the one to tell you this, but your father apparently had a gambling problem.
August 17th, 2008 at 2:08 pm
I don’t understand why these conversations get bogged down so much just based on NYC. Yeah, 150K is not quite the same in NYC as somewhere else. There should be a slight adjustment. But I don’t think it’s quite as large as some people make it out to be. I think one thing to point out is that living in NYC, you pay a lot more in taxes than someone living in Texas, say. I think that should factor in more than housing costs, since you can always live outside of Manhattan, but they still find ways to make you pay if you actually have to work there.
But does it really matter? I think there is a discussion worth having about the potential differences between high earners and people with lots of assets. Also, the important thing here is that Obama’s understanding is reasonable, while McCain’s is ludicrous. $5M in assets=rich makes since. Income > $5M -> McCain has no freakin’ clue.
Also attitudes like, “$150K in Manhattan is pretty crappy for a family of 4″, is pretty much the definition of someone in the upper-middle class observing that that lifestyle is not achievable at that income level in Manhattan. But crappy? Well, only if you think middle-class living qualifies as crappy.
August 17th, 2008 at 2:09 pm
Otto says:
It is one of the bizarre pleasures on these ‘liberal’ sites that people fall over themselves to claim that $150,000/year incomes are not the rich, particularly where discussions of taxation are concerned
Yeah, we’re doing “nuance” here. You can find “soundbite” elsewhere. To take our one-size-fits-all family of 4 with $150K, and drop them into Manhattan:
1. Medical and a 401K – $20K?
2. Taxes (Fed, city, state, local, FICA) – $50K?
3. Rent – $50K – that’s a cheap $4K/mon for a 2BR.
$30K left, so I guess Mom is staying at home with the kids, because daycare or a nanny is out of the question.
4. Utilities. $3K – luckily Manhattan is one of the greenest cities in the US.
5. Transit. $2K – that’s bus/subway for two.
6. Dry cleaning. $1K – Dad’s $150K job needs a suit and tie
$24K left for food, clothing, a vacation, movies, dining out, charity, etc.
All in all, not that different from the family earning a median $70K in a lower-cost area.
August 17th, 2008 at 2:18 pm
There is a huge difference between a two income family earning 150k a year and being rich. Thats why the repubs get so much mileage out of it. A nurse and a teacher bring down 150k a year in many cities. But throw in a special needs child, parents with chronic illnesses, a kid with a drug problem and you will see just how far that 150k goes. Or lay one of them off for a year or two. Or toss in a disability. It is apples and oranges to compare a trustafarian with 90k per year in dividend income with a wage earner.
August 17th, 2008 at 2:20 pm
People who live in Manhattan because they work in NYC could presumably live in Queens, Brooklyn, or NJ and not give up their income. What they would (in most cases) give up would be *time*, in the form of an increased commute, and giving up time makes one less-well-off just as much as if one took a pay cut.
I disagree, given that lots of people who don’t live or work in manhattan have non-negligible commutes. Crying poverty (or middle-classness) because you make 150k/yr in Manhattan ignores the fact that you’re living in Manhattan by choice. And I say this as someone who plans to choose to live in Manhattan.
August 17th, 2008 at 2:24 pm
And of course there are lots of people who get by in Manhattan on less than $50,000. The tears of the wealthy, always on display in MY.com comments.
August 17th, 2008 at 2:31 pm
Tyro,
“I disagree, given that lots of people who don’t live or work in manhattan have non-negligible commutes. Crying poverty (or middle-classness) because you make 150k/yr in Manhattan ignores the fact that you’re living in Manhattan by choice.”
I didn’t ‘cry poverty’ or ‘middle-classness’. I said that such people aren’t rich. Do you understand the difference? If not what’s the point of further discussion?
Also, the question under discussion was specifically: could a hypothetical person who lives in Manhattan and makes $150k live elsewhere with the same job. My answer was yes, but they’d have longer commutes, in effect making them less-well-off – the equivalent of reducing their salary – since time is money.
Which part of that (as opposed to stuff I didn’t say) do you actually dispute?
August 17th, 2008 at 2:53 pm
I said that such people aren’t rich. Do you understand the difference?
For purposes of making policy regarding taxation of marginal incomes above $150,000, I disagree.
Living in Manhattan is a choice. Those who have a harder time accumulating wealth on a 150k/yr salary due to the expense of living in Manhattan are choosing to forgo that accumulation of wealth for the privilege of living in Manhattan. We already consider the Manhattanites different in terms of taxation: we allow them to deduct their local and state taxes. Perhaps some more cost-of-living deductions might be in order (a renters’ deduction, for example), but for purposes of determining marginal tax rates, I can’t say it’s that much of a problem to consider those making incomes about 150,000 as “taxing the rich.”
August 17th, 2008 at 3:18 pm
SC, I think this boils down to what being rich is. For better or worse, high paying jobs, and high costs of living involve living in or near a city, and not just a city, but vibrant cities, the ranks of which are rather narrow.
A person in a town making X dollars certainly has a better ability to own a home, have nice cars, and lots of other stuff. If said person is happy living in said town…they are rich.
Likewise, a person in a city making a lot more money, but with more expenses, may not have as many material things, but has more choices, and, chances are, more job opportunities. Your apparent disdain for city life aside, many folks choose it, and like it. All I am trying to say is that a person making a lot more money in a city may not have as many things as a person making less in a town. That being the case, as many have pointed out, the actual quality of life is pretty darn high in both cases.
So, I’m not trying to define rich down. Instead, I’m trying to draw attention to the fact that those who claim their 6 figure salaries don’t mean they are rich, are, well, wrong. Not many folks can afford to live (nevermind have the choice) to live in areas where the cost of living is huge. Such a choice means, that, yes, you are rich. You live in a big city, which require mucho moolah, and if you can do it, well, there you go. If you live in a city and make meager dollars, well, you aren’t rich, but let’s not pretend that those who are doing well in cities such as NYC are less well-off than people making substantially less in less urban areas with more real estate and personal toys.
As an aside, I make more money than most people (nationwide), yet at times struggle to make rent and pay bills. That said, I am under no illusion that I am not part of the top 10% of income earners, nor do I think I am poor. Others around me make a lot more and have more stuff, but that doesn’t mean that I can pretend I am not middle class or even upper middle class. I just happen to be in a populace that, in general, makes tons of money. By choice. I just think it is important to remember that the idea of being rich extends beyond local boundaries. In some parts of this nation, being rich simply means being able to pay your rent and have a bit left over (like NYC and other places). You may not feel rich, but you are. You are receiving a large income and spending money on things that, for the vast majority of the population, are simply out of reach.
August 17th, 2008 at 3:24 pm
In the spirit of ordinary language philosophy, here are some defintions of rich grabbed at radnom from popular sites such as dictionary.com:
having wealth or great possessions
Possessing great material wealth
Possessing a large amount of money, land, or other material possessions
Possessing material wealth.
owning a lot of money or property
Get it? Good, problem solved.
August 17th, 2008 at 3:27 pm
Why is everyone using the number $150,000 in this discussion. As Obama pointed out last night, $150,000 is a pretty good income, but if you’re talking rich, it would be $250,000 and over.
And this discussion shows why. You can argue all you want about if making $150,000/year is rich. (And clearly it does depend on where you live, because $150,000/year for a family of 4 in St. Louis goes twice as far as it would in New York or L.A.)
But you can’t really argue over $250,000. If you are making a quarter of a million dollars a year, you’re totally rich, and no one is gonna argue otherwise. Which is why Obama was wise to pick that number.
So stop talking about $150,000! You all just like to hear yourselves type!
As to McCain’s $5,000,000, McCain might have been trying to be funny, though that is debatable. What isn’t debatable is that he didn’t want to answer the question, and we all know why – because the guy DOESN’T KNOW! He’s clueless about regular folks and how they live. He’s been living off his rich trophy wife for years. He is out of touch.
August 17th, 2008 at 3:36 pm
You all just like to hear yourselves type!
I’m shocked, shocked to find such behavior on the internet.
August 17th, 2008 at 4:31 pm
You all just like to hear yourselves type!
I’m shocked, shocked to find such behavior on the internet.
Yeah, but he makes very valid points. First, if you are married or even single, the top tax bracket doesn’t kick in until what, $350,000? So that’s the appropriate measure when asking, should we increase taxes on the rich? I think the answer is pretty clearly, yes.
August 17th, 2008 at 4:43 pm
The Foulness makes the key point–that McCain has no idea what it’s like to be a private-sector employee in America.
Bush, at least, had mismanaged companies, whereas McCain hasn’t even done that–he’s been a bribable senator married to a rich woman since he left the armed forces.
It’s unbelievable that anybody would consider listening to this guy who is as unfamiliar with American life as a Pakistani.
August 17th, 2008 at 5:38 pm
Come on Matt, it’s not the trust-fund scumbag’s fault that he was born a trust-fund scumbag, and a trust-fund is a hard thing to renounce. While people who live off trust-funds are probably more likely to be arrogant and parasitic, on average, than the rest of the population, these are not the only faults that darken a personality–and they’re parasites mostly of their own family, who actively desire they be preyed on. I suppose I don’t really buy the notion that work is something of positive moral value. I’m too suspicious of the obvious utility such a belief would have to a capitalist economy such as our own, as well as the obvious historical examples in which such a belief has been the lie of exploiters (Victorian Britain and its Empire, “Arbeit Macht Frei”, etc.). To not have to earn an income is certainly a luxury of birth, but exactly this luxury has allowed talents such as Paul Cezanne, Edgar Degas, Edouard Manet, Eugene Delacroix, Tolstoy, Lord Byron, Gustave Caillebotte, etc., to devote themselves wholly to their art, not at all enslaved by the economic need for an audience. Indeed, it seems clear that, excepting a few popular novelist, the fall of the patronage system with the advent of 19th century bourgeois industrialism left artists at the edge of starvation, like Monet or Renoir, or dependent on their inherited economic independency. I, for one, am quite happy they were all unfairly fortuned with a hefty inheritance.
August 17th, 2008 at 5:58 pm
Since the question itself is often asked in relation to taxes … as in, “raise taxes on the rich” … why not define rich by figuring out what income level is required to be at the point where a moderate increase in your tax rate won’t significantly change your lifestyle? A family might have a fairly large income, but if, say, a 5% income tax increase would prevent it from buying a car or put a kid’s college tuition at risk, then maybe the family isn’t “rich”. After all, isn’t that part of the rationale for “taxing the rich” … that they can absorb a meaningful hike in takes without any substantive hardship?
August 17th, 2008 at 6:11 pm
Robert, you apparently don’t know this:
Matt’s use of the word trust-fund scumbag is referencing a certain commenter who used this expression to refer to our esteemed bloghost himself. The motivation for this taunt was Matt’s support for Obama and rejection of Clinton as Democratic nominee. This, it was alleged by said commenter, was entirely due to Matt’s priviledged background which kept him from seeing the importance of Clinton’s palns for health-care reform.
August 17th, 2008 at 6:52 pm
Good points, The Foulness, but $150,000 is the number precisely because it is worth arguing about. I still say making that much qualifies you as rich, SC and other disagree, but the point of the matter is to argue about it, not decide at what point we can all nod together and say “yeah, that’s rich.”
August 17th, 2008 at 8:12 pm
#8 Daniel Says:
August 17th, 2008 at 12:05 pm
Matt,
Just to make one thing clear: you realize, right, that McCain’s $5mm figure was a joke? He said right afterward, to laughter, “I’m sure that comment will be distorted.” Interestingly, you and McCain also seem to agree on your last point; he mentioned the silliness of considering a small business owner who works 16-hour days “rich” because of some arbitrarily chosen income level.
I happen to agree with you but would love to know why McCain, when asked a serious question about a serious to most Americans subject, gets a pass on not answering by yet again cracking *jokes* or telling war stories?
Tell me if you would, does McCain have a tax policy besides keeping taxes low? Does he have a plan that would pay down our already horrendous debt besides the infamous and elusive cut pork mantra? How does he propose paying for not only our existing problems, but the extra that would be incurred if we followed his impetuous *we need to respond quickly and forcefully* to a rogue Russia or Iran or anyone else that rears an ugly side of their head?
But most of all, tell me if you would, how it’s excusable to continually allow McCain to not answer our questions with serious answers and not jokes.
August 17th, 2008 at 8:36 pm
“The motivation for this taunt was Matt’s support for Obama”
Well, no.
The motivation for the line was Matthew’s badly founded assertion that working class folks were going for Clinton over Obama because of racism, rather than because Clinton’s economic plan was more in the interests of working class folks.
—–
“Rich” does not have the same meaning as “flush”. Rich has a basic definition of security, which is why “rich” is generally linked to asset ownership. Some folks earning $150k are rich. Some are not. The size of your portfolio is more important than the size of your salary.
This is why someone with a $90k trust fund is far more likely to be rich than someone with a $115k job. You don’t get fired from a trust fund. You have security.
Interestingly, this is why universal healthcare is such an important issue for working class folks. It provides security. Someone earning $70k with healthcare and retirement security is closer to rich than someone earning $150k without that security.
August 17th, 2008 at 9:21 pm
I think statistics like the ones Klinker cites might be more accessible to many people if we compared the distribution of wealth to something else commonly measured, like, say, height. I’m taking the following figures from the National Center for Health Statistics (NCHS)’ Growth Chart for boys (pdf), which includes the average heights for 20-year old (i.e., full-grown, usually) men in the U.S. as of the year 2000.
Here are the figures corresponding to the percentiles Klinker notes:
The average height (not sure whether this is median or mean) is about 5 feet 9 1/2 inches. The 90th percentile is just over 6′1″, and the 95th is just over 6′2″. For Obama to say that households making $150,000 a year are “rich,” then, is analogous to him saying that 20-year-old men who are taller than about 6′ 1 1/2″ are “tall.” That seems reasonable enough, I guess. (I’m 6′2″, and I feel “tall.”)
The NCHS graph only shows the 97th percentile (which is almost 6′3″), so we have no idea what the cutoff is for the top one-tenth of one percent in height. It’s got to be at least like 6′8″, though.
The takeaway is that, for McCain to say that households making $174,000 a year are “not rich” is equivalent to him saying that 6′3″-tall men are “not tall.” That’s really only true if you’re in the NBA (coincidentally, one of the few communities where $150,000 a year would seem “poor.”)
August 17th, 2008 at 9:33 pm
Oops. I went with $150k, not realizing that Obama had actually said $250k was “rich.” So Obama’s number is also “off the chart,” just not as far off as McCain’s. I guess Obama’s “rich” man is a smallish shooting guard (6′4″ or so), while McCain’s is at least a power forward.
August 17th, 2008 at 10:00 pm
OK, since nobody posted it, how about Chris Rock’s take on wealth: “Shaq is rich. the guy who signs his paychecks? He’s wealthy.”
And, “You can blow rich with a bad drug habit over a weekend in Vegas!”
And my own $0.02, there would be less trust fund wastrels if we cranked up the estate tax back up to a Teddy Roosevelt approved level.
Cheers,
August 17th, 2008 at 10:37 pm
Defining “Rich” can’t be done in a truly objective basis. One will always have to inject some type of arbitrary assumption. We can determine what Obama’s operational definition is based on his tax policy proposals.
I think what Obama is proposing is that taxes would be raised on individuals making more than $150,000 or couples making more than $250,000. Or something like this.
McCain on the other hand thinks that no one is rich (or maybe everyone). He intends to raise taxes on everyone who currently gets health care through their employer by counting the employer’s contribution as taxable income.
Whoopeee! I just go a $10,000 a year raise. Thanks John!
August 17th, 2008 at 11:11 pm
Matt: “many ex-felons aren’t allowed to vote. People in these categories tend to be poorer-than-average.”
No shit?
August 18th, 2008 at 2:32 am
$150K is pretty crappy for a family of 4 in Manhattan
You need to get the hell out of your bubble. Two minutes of searching finds lots of apparently non-crappy two-bedroom apartments in Manhattan for $2300 or less south of 96th street [1]. $27,600 a year is 18% of your income, well below the cap of what’s affordable on $150,000. If you go for the 2-bedroom the kids have to share a room, but that’s is how lots of families in this country live. They’re not exceptionally luxurious accommodations, but real estate is all about location, location, location.
If you’re comparing your apartment to that of your single investment-banker friends making $300k/year, it would seem crappy by comparison. But the idea that living in a merely above-average quality apartment in Manhattan south of 96th street is “crappy” could be maintained only by someone so rich as to have no conception of how the vast majority of people in this country live.
[1] This also appears to be what a lot of rich people mean when they say “Manhattan.”
August 18th, 2008 at 2:34 am
Also, I should add that nobody is forcing you to live in Manhattan. You can always move to a nicer place in Brooklyn, Queens, or the burbs.
August 18th, 2008 at 3:25 am
Part of the problem with defining “rich” these days (and “rich” is always a relative term within societies and only becomes more objective across societies, such as pointing out the average American is rich compared to most of humanity) is that the top 10% has made out so much better the past 30+ years than the other 90%, the top 5% have made out so much better than the top 10%-5%, the top 1% have made out so much better than the top 5%-1% and the top 0.1% have made out so much better than the top 1%-0.1%. Not only has the gap between the rich and the middle classes and poor widened, but the gap between the upper-middle class and the rich have widened, the gap between the rich and the super rich have widened and the gap between the super rich and the wealthy have widened.
August 18th, 2008 at 6:03 am
No, there simply is no problem, at least as far the cut-off point for rich is concerned. If you don’t own anything of significant value, if you solely depend on your income and the money a bank lends you, then you’re not rich – you might be upper-middle class, well- to-do or prosperous, you might even be on your way to becoming rich if you invest wisely, but you’re lacking the security and flexibility rich people have.
August 18th, 2008 at 9:46 am
Rich is really about wealth and not income. I could start
a business go public and hold 250 million in stock but pay myself just 100K a year. So I’m not rich? We’re taxing the wrong thing – we shouldn’t tax income, we should tax wealth.
August 18th, 2008 at 11:10 am
“Two minutes of searching finds lots of apparently non-crappy two-bedroom apartments in Manhattan for $2300 or less south of 96th street”
bullshit. if you’re relying upon Craigslist, those ads are fake. you MIGHT find a crappy two bedroom walkup in the LES for 3K or on the UES (now the cheapest neighborhood below 96th street). otherwise 4K is the minimum for a small two bedroom.
the median rent for a below 96th street two bedroom is 5K btw. you also didn’t add in the broker’s fee.
August 18th, 2008 at 12:47 pm
The BEA recently published a cost of living index to compare living cost in different regions of the country.
Given that the national average is 100, these are the most
expensive places to live:
New York-New Jersey-Long Island 146.6
San Jose – Santa Clara 143.4
San Francisco 139.9
Bridgeport-Stamford-Norwalk 134.7
Honolulu 131.4
Boston-Cambridge-Quincy 124.8
San Diego 122.4
Los Angles – Long Beach 120.5
Manchester-Nashua NH 120.3
So having a $146,000 income in New York is the same as having roughly a $100,000 income in the rest of the country. This puts you in the quite comfortable and above average category, but it does not make you rich.
But I think the entire question of how to define being rich does not mean income. Being rich is to use the old wall street term, what is your drop dead point. This means when do you have enough assets to tell them to take this job and shove it. Being rich is having enough assets to not having to work any more and still live the life style you want to. It has little or nothing to do with current income.
August 18th, 2008 at 2:09 pm
Here are COL adjusted real median incomes throughout the country, another reason why cross geographic income comparisions should be taken with a big grain of salt (note that NYC is ranked second to last by this measure)
http://www.coli.org/COLIAdjustedMHI.asp
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