Tag Archives: income

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.

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%.

EPI has the answer in the post Separate is still unequal: How 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.

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)

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.

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U.S. Publicly held companies now have to report CEO and median worker salaries (this was part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010) and Bloomberg has an article, Alphabet CEO Page Makes a Tiny Fraction
Compared to Its Median Employee by Alicia Ritcey and Jenn Zhao (5/15/18), with an interactive graph (see image).   Mattel “wins” with a CEO to median worker pay ratio of 4,987-1. Walmart “wins” in the consumer staple category with 1,188-1 ratio.  In the interactive graph there is a button on the top right that hides outliers. This is useful, but be conscious of whether it is on or off.

The Guardian article ‘CEOs don’t want this released’: US study lays bare extreme pay-ratio problem by Edward Helmore (5/16/18)  provides some context and a summary.  The Bloomberg graph is being updated daily.  Rep. Keith Elliston’s staff prepared the report Rewarding or Hoarding? An Examination of Pay Ratios Revealed by Dodd-Frank, which has the data of the first 225 Fortune 500 companies to report and and details on the data collection. The data in the report can be used in statistics courses to test differences by sector.  At some point maybe Bloomberg will post a spreadsheet of the data (one can also ask for it too).

Fenaba R. Addo has an explanation in the article Parents’ Wealth Helps Explain Racial Disparities in Student Loan Debt at the Federal Reserve bank of St Louis.

An analysis of data from a youth survey found that 58 percent of black young adults reported that their parents contributed an average of $4,200 over the course of their college career. That compares to an average of $12,000 given by 72 percent of white families.

Finances by race is summarized in table 1, copied here. It is note that “All averages are statistically different at the 5 percent level by race, indicating that the differences are not a result of random chance.”  (This can be used in a statistics course and if you contact the author you might even get the data.) The article goes on to note how this may impact the future of these students:

As early as age 25, racial wealth gaps begin to emerge. In the age 25 asset survey, college-educated white young adults reported having approximately $17,000 more wealth than black young adults who had attended college. We calculated that a $10,000 increase in young adult net wealth is associated with 7.6 percent less student loan debt. Young adults with high net wealth may have benefited from transfers of wealth from their parents and subsequently may be in a better position to pay down their student loans quicker.

An August 2016 report by EPI, The teacher pay gap is wider than ever (8/9/16 by Allegretto and Mishel), suggests not. For instance, the graph here shows that teachers are paid 23% less than other college graduates in 2015 and the gap has been increasing since 1980.

Average weekly wages (inflation adjusted) of public-sector teachers decreased $30 per week from 1996 to 2015, from $1,122 to $1,092 (in 2015 dollars). In contrast, weekly wages of all college graduates rose from $1,292 to $1,416 over this period.

For all public-sector teachers, the relative wage gap (regression adjusted for education, experience, and other factors) has grown substantially since the mid-1990s: It was ‑1.8 percent in 1994 and grew to a record ‑17.0 percent in 2015.

The report includes 8 graphs with data plus two tales. There are comparisons between females and males, as well as union and non-union.

The World Inequality Report 2018 provides a complete summary of world income inequality.  The executive summary contains thirteen charts to explore such as the one here.

The poorest half of the global population has seen its income grow significantly thanks to high growth in Asia (particularly in China and India). However, because of high and rising inequality within countries, the top 1% richest individuals in the world captured twice as much growth as the bottom 50% individuals since 1980 (Figure E4). Income growth has been sluggish or even zero for individuals with incomes between the global bottom 50% and top 1% groups. This includes all North American and European lower- and middle-income groups.

The executive summary also notes:

Research has demonstrated that tax progressivity is an effective tool to combat inequality. Progressive tax rates do not only reduce post-tax inequality, they also diminish pre-tax inequality by giving top earners less incentive to capture higher shares of growth via aggressive bargaining for pay rises and wealth accumulation. Tax progressivity was sharply reduced in rich and some emerging countries from the 1970s to the mid-2000s. Since the global financial crisis of 2008, the downward trend has leveled off and even reversed in certain countries, but future evolutions remain uncertain and will depend on democratic deliberations. It is also worth noting that inheritance taxes are nonexistent or near zero in high-inequality emerging countries, leaving space for important tax reforms in these countries.

The methodology page includes files with all the data.

Statista has your answer with their post Wall Street Bonuses Outpace Household Income  (3/28/18 by Dyfed Loesche) and their chart here.

Compared to the average U.S. household income this is quite some money, keeping in mind these are payments on top of the regular pay. In 2016, the average Wall Street bonus stood at close to $158,000 and thus 2.5 times as high as the median household income of a little more than $59,000. (The U.S. Census Bureau has not yet released official household figures for 2017). The average number of people living in an American household stands at 2.5.

The post has links to the median household data as well as the bonuses. Not only is this useful data for a stats course, but there is also an interesting discussion to be had on the use of mean and median in this post.