Home / Tag Archives: income

Tag Archives: income

What is in the Income and Poverty 2018 report?

The U.S. Census Bureau report Income and Poverty in the United States: 2018 by Jessica Semega, Melissa Kollar, John Creamer, and Abinash Mohanty (9/10/19) is now available.  A few highlights can be found in the post Pay is Up. Poverty is Down. How Women are Making Strides  by Jessica Semega (9/10/19). For example, the graph copied here is poverty rates for  2917 and 2018 for men, women, and by race for women. In terms of households:

Median incomes of married-couple households and those with male householders did not change from 2017.

In 2018, the poverty rate for families with a female householder was 24.9%, higher than that for married-couple families (4.7%) and families with a male householder (12.7%).

However, the poverty rate for families with a female householder declined from the previous year, at 26.2% in 2017.

The full report contains 20 pages of charts and summaries related to income and poverty by numerous categories. The other 50 or so pages are data tables that are also available in excel files (see links on right sidebar of the report page).  There is ample data here for use in courses.

How different is weekly pay of women and men by race?

The BLS report, Highlights of women’s earning in 2017 has four charts with data about women’s earnings and occupation.  The chart copied her compares men and women by race.

Asian women and men earned more than their White, Black, and Hispanic counterparts in 2017. Among women, Whites ($795) earned 88 percent as much as Asians ($903); Blacks ($657) earned 73 percent; and Hispanics ($603) earned 67 percent. Among men, these earnings differences were even larger: White men ($971) earned 80 percent as much as Asian men ($1,207); Black men ($710) earned 59 percent as much; and Hispanic men ($690), 57 percent. (See chart 3 and table 1.)

Note:

The earnings comparisons in this report are on a broad level and do not control for many factors that can be important in explaining earnings differences, such as job skills and responsibilities, work experience, and specialization.

The BLS is an excellent source for data.

How are CEOs doing?

The EPI article, CEO compensation has grown 940% since 1978 by Lawrence Mishel and Julia Wolfe (8/14/2019), summarizes CEO compensation.  Selected Key findings:

Using the stock-options-realized measure, we find that the average compensation for CEOs of the 350 largest U.S. firms was $17.2 million in 2018. Compensation dipped 0.5% in 2018 following a 7.6% gain in 2017.

The fact that CEO compensation has grown far faster than the pay of the top 0.1% of wage earners indicates that CEO compensation growth does not simply reflect a competitive race for skills (the “market for talent”) that also increased the value of highly paid professionals: Rather, the growing differential between CEOs and top 0.1% earners suggests the growth of substantial economic rents in CEO compensation (income not related to a corresponding growth of productivity). CEO compensation appears to reflect not greater productivity of executives but the power of CEOs to extract concessions. Consequently, if CEOs earned less or were taxed more, there would be no adverse impact on the economy’s output or on employment.

Over the last three decades, CEO compensation increased more relative to the pay of other very-high-wage earners than did the wages of college graduates relative to the wages of high school graduates. This finding indicates that the escalation of CEO pay does not simply reflect a more general rise in the returns to education.

There are six tables/graphs in the article and the data is available for download.

How has the federal minimum wage changed?

The EPI article Congress has never let the federal minimum wage erode for this long by David Cooper (6/17/19) provides the graph here.

June 16th marks the longest period in history without an increase in the federal minimum wage. The last time Congress passed an increase was in May 2007, when it legislated that the minimum wage be raised to $7.25 per hour on July 24, 2009. Since the minimum wage was first established in 1938, Congress has never let it go unchanged for so long.

To get the data for this graph visit The FRED Blog The value(s) of the minimum wage. At the bottom of the page they provide direction on how to recreate the chart with FRED data. Knowing how to do this is valuable and should be incorporated into any statistics or QL course.

How will raising the federal minimum wage impact workers?

The EPI article, Raising the federal minimum wage to $15 by 2024 would life pay for nearly 40 million workers, by David Cooper (2/5/19) covers their analysis of raising the minimum wage.  Their graph here shows the gap between the minimum wage and median wage over time. The report is lengthy and detailed. A few quick highlights:

Raising the minimum wage to $15 by 2024 would undo the erosion of the value of the real minimum wage that began primarily in the 1980s. In fact, by 2021, for the first time in over 50 years, the federal minimum wage would exceed its historical inflation-adjusted high point, set in 1968.

All told, raising the minimum wage to $15 by 2024 would directly or indirectly lift wages for 39.7 million workers, 26.6 percent of the wage-earning workforce.

Indexing the minimum wage to the median wage would ensure that low-wage workers share in broad improvements in U.S. living standards and would prevent future growth in inequality between low- and middle-wage workers.

The article has over 20 graphs/charts/tables and each one has the associated data.  The report does include “a discussion of the research on the likely effects such a raise would have on businesses, employment, and low-wage workers’ welfare.”

What is the current information on wages trends?

EPI has released its report: State of Working America Wages 2018, Wage inequality marches on – and is even threatening data reliability by Elise Gould (2/20/19). The report includes 19 tables and charts. The data and charts are easily downloaded, such as the chart here. The report is thorough and anyone reading it will likely be surprised about something.  A few selection from the report:

From 2017 to 2018, men at the 95th percentile saw large wage gains, while those at the middle and very bottom of their wage distribution experienced downright wage losses.

The gender wage gap at the 10th percentile remains the smallest across the wage distribution and it has narrowed since 2000; it is currently at 5.9 percent. The regression-adjusted average gender wage gap narrowed slightly from 2000 to 2018 and is currently at 22.6 percent.

In both comparison periods, both men and women at the 10th percentile saw greater wage growth in states with minimum wage changes versus those without.

Over the last 18 years, wage growth for white and Hispanic workers has been about four times faster than that of black workers in the 20th through the 70th percentiles of their respective wage distributions. The 60th and 70th percentiles of the black wage distribution remain below their 2000 levels.

The wages of those with a high school diploma rose faster than the wages of those with a college degree over the last two years, narrowing the gap between college and high school wages. As a result, the college wage premium—the regression-adjusted log-wage difference between the wages of college-educated and high school–educated workers—fell from 50.6 percent to 48.4 percent between 2016 and 2018.

Related posts:  How have wages grown since 1980?
What is the pay gap between black women and white men?
What are the prospects for high school grads?

The Interactive Graphs page has two charts on wages.

How have wages grown since 1980?

Source: EPI

Wage growth has varied depending on numerous factors such as gender, race, income level, and education. The EPI article,  America’s slow-motion wage crisis-Four decades of slow and unequal growth by John Schmitt, Elise Gould, and Josh Bivens (9/13/18) summarizes the findings with 30 graphs or tables (data included). For example, the cumulative percent change in inflation-adjusted hourly wages for workers in the 10th, 50th, and 90th percentile is given in the graph here (downloaded from the article).

The first key trend since 1979 is the historically slow growth in real wages. In 2017, middle-wage workers earned just 16.8 percent more than their counterparts almost four decades earlier. This corresponds to an annualized inflation-adjusted growth rate over the 38-year period of just 0.4 percent per year. The real wage increase for low-wage workers (those at the 10th percentile) was even slower: 8.9 percent over 38 years, or a 0.2 percent annualized growth rate.

This slow growth is particularly disappointing for two reasons. First, as we will see in the next section, U.S. workers today are generally older (and hence potentially more experienced) and substantially better educated than workers were at the end of the 1970s.10 Second, for workers at the bottom and the middle, most of the increase in real wages over the entire period took place in the short window between 1996 and the early 2000s. For the large majority of workers over the last four decades, wages were essentially flat or falling apart from a few short bursts of growth.

Quiz Questions: What was the cumulative change in hourly wages from 1979 to 2017 for

  1. What was the cumulative change in hourly wages from 1979 to 2017 for workers with an advanced degree?
  2. What was the cumulative change in hourly wages from 1979 to 2017 for workers with less than a high school diploma?
  3. Which ethnic group had the greatest change?
  4. What was the cumulative change in hourly wages from 1979 to 2017 for Women in the 50th percentile?
  5. What was the cumulative change in hourly wages from 1979 to 2017 for Men in the 50th percentile?

The article and/or corresponding data is ready for use in a stats or QL course in the 90th percentile.

Answers: (1) 30.0% (2) -9.6% (3) Asian American/Pacific Islander non-Hispanic 23.3% (4) 33.8% (5) 8.1%.

What is the pay gap between black women and white men?

EPI has the answer in the post Separate is still unequalHow patterns of occupational segregation impact pay for black women by Madison Matthews and Valerie Wilson (8/6/2018).

On average, in 2017, black women workers were paid only 66 cents on the dollar relative to non-Hispanic white men, even after controlling for education, years of experience, and geographic location. A previous blog post dispels many of the myths behind why this pay gap exists, including the idea that the gap would be closed by black women getting more education or choosing higher paying jobs. In fact, black women earn less than white men at every level of education and even when they work in the same occupation. But even if changing jobs were an effective way to close the pay gap black women face—and it isn’t—more than half would need to change jobs in order to achieve occupational equity.

Along with the graph copied here, there is a time series from 2000 to 2016 of the Duncan Segregation Index:

the “Duncan Segregation Index” (DSI) for black women and white men, overall and by education, based on individual occupation data from the American Community Survey (ACS). This is a common measure of occupational segregation, which, in this case identifies what percentage of working black women (or white men) would need to change jobs in order for black women and white men to be fully integrated across occupations.

Data is available for both graphs.

What is the poverty rate in OECD countries?

The OECD (Organisation for Economic Co-operation and Development) defines poverty as an income below half the median household income. The chart here was created using the most recent year of data from the OECD poverty rate page .  The U.S. leads the pack with a rate of 17.8%, with Israel right behind at 17.7%. At the bottom are Denmark and Finland with rates of 5.5% and 5.8% respectively.  It is important to note, as the OECD does,

However, two countries with the same poverty rates may differ in terms of the relative income-level of the poor.

The data is available for more than OECD countries on their page and there is an interactive graph, but the graph can’t be dowloaded. The data and R script that created the graph here are available: csv file, R script.

Citation for data:OECD (2018), Poverty rate (indicator). doi: 10.1787/0fe1315d-en (Accessed on 11 July 2018)

What is the Great Gatsby curve?

From The 9.9 Percent Is the New American Aristocracy: The class divide is already toxic, and is fast becoming unbridgeable – You’re probably part of the problem by Matthew Stewart (June 2018) in The Atlantic. (Figure 2)

The Great Gatsby curve represents the correlation between income inequality and intergenerational income elasticity. In short, the greater the income inequality in a country the greater the relationship between a child’s income and their parent’s income.

The Atlantic article, The 9.9 Percent Is the New American Aristocracy: The class divide is already toxic, and is fast becoming unbridgeable – You’re probably part of the problem by Matthew Stewart (June 2018)  is an excellent example of weaving important quantitative information (great for a QL course), including the Great Gatsby curve, to tell an important story.

Rising immobility and rising inequality aren’t like two pieces of driftwood that happen to have shown up on the beach at the same time, he noted. They wash up together on every shore. Across countries, the higher the inequality, the higher the IGE (see Figure 2). It’s as if human societies have a natural tendency to separate, and then, once the classes are far enough apart, to crystallize.

The post What is The Great Gatsby Curve? by David Vandivier (6/11/2013) has an animated gif that explains the curve well. To update or recreate the chart, you can get country gini values from the CIA World Factbook.  Intergenerational income elasticity can be found in figure 1 of a the paper Inequality from generation to generation:the United States in Comparison by Miles Corak (2012).  Intergenerational Social Mobility in OECD Countries January 2010 OECD Journal: Economic Studies 2010(1):6-6 Orsetta Causa  and Åsa Johansson is another source.  If you find more recent data let us know.

Never miss a post. Go to sustainabilitymath.org and sign up for email alerts or follow us on twitter @SustMath.