Mar
07

Income Improvement

 In 1967, 8.1% of households earned more than $100,000 inflation adjusted, 53.2% (the middle class) earned between $35,000 and $100,000, and 38.7% earned less than $35,000. Today, 27.7% of the population earns greater than $100,000 (three times the percentage back in 1967), 42.1% earn between $35,000 and $100,000, and 30.2% earn less than $35,000. The middle class is shrinking, but it’s because more American households are earning more than ever.

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Comments

  1. Balancing the 1 vs 2 income households is crucial. There have been at least 5 great economic shifts since 1960.

    – 2 incomes
    – 30 year mortgage
    – Transition to service economy
    – Computer productivity gains
    – Global product sourcing

    The question at the end of the day is, “Is 100k today worth an inflation adjusted 100k from 1961?” Based on our average lifestyle, it most certainly isn’t.

    I’d be curious about your thoughts on the “spend-what-you-make” living that the Boomers have promoted for the past 40 years and how it might affect future generations.

    • Elliot says:

      We live so much longer today than we did back then, and our jobs are physically so much easier and we have iphones, and we all have air conditioning, and so we were racist. No thanks, I’ll take today of yesterday any day of the week!

  2. This is very interesting. Where did you source this info? I’d be interested in reading more about this.

  3. I like the information, but what percentage of households in 1967 were single income households vs today where many many more households are dual income. Assuming there were more stay at home parents in 1967 there were no out of home child care expenses and discretionary income was higher (I personally pay over $20k in childcare costs for two kids). With these thoughts in mind, where do you think we sit in comparison?

    • Elliot says:

      You can never exactly compare apples to apples. And while all the comments yo make have validity, cars today are way better, healthcare is way better, we all live longer and no one dies of hunger! So it is also key to look at the bright side of things too! I personally am a big fan of living longer! 🙂

      • Living longer is great, but are families worse off economically today vs. 1967? Costs of healthcare and housing increased faster than wages. The cost of gasoline increased much faster than fuel efficiency, making it more expensive to drive (yes reliability may be better but you could fix a car on the side of the road back then).

        We now live in an economy where it is very difficult to live on one income and even though households over 100k have tripled, are we better off? I dont think so. We are trapped in an economy that requires two-incomes just to raise a family.

        • Elliot says:

          You will give up living longer, and iphones, and easier jobs, for cheaper gas! And believe it or not gas is now the same price it was in 1973! We all have air conditioners, and running hot and cold water. Ask a guy about to die, how much he would pay for a few extra years of life!

          • It is not the number of years in your life its the amount of life in your years. It is about the quality of a life lived. Do iphones and air conditioning increase the quality of your life or make you happier? Consuming through more income should not be the goal nor the standard. How happy are you – that should be the standard. I would rather die at 80 having lived a life of happiness and not scraping by due to inflated costs than at 90 after working until i lose the capability and spending my last dollars in a nursing home. More of us are looking at second rather than the first – so what does 3x more households earning above 100k really get us? 10 more unhappy years watching cat videos on youtube?

            Thanks for the conversation.

          • Elliot says:

            De gustibus non est disputandum! Which in Latin means, there is no arguing about taste. You have yours and I have mine!
            All the best,
            Elliot.

  4. Larry Goss says:

    Good info. But is this a bit misleading in the sense that most households now include 2 incomes? Is there a comparison on individual worker income? How about a comparison of the number of single income households then vs. now? Thanks and keep up the good work!

    • Elliot says:

      Not misleading! This data also does not account for the fact that we now live substantially longer than they did back then. To me that is a big deal. And, if you think otherwise, as someone who is dying how much they would pay to live a few more years! As for your other questions, they are good and hope to answer them in future posts!

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