A Bush in the oval office is bad for your paycheck

by Tomato Observer

 

When a Bush is in office, everyone loses.  Low-income families are harder hit than high-income families, but it’s bad for high-income families, too.

 

Skip this section if you already know the basics about how household income is tracked. The U.S. Census Bureau shows how income is distributed from low to high, by splitting up the population into quintiles.  Quintiles consist of 20% of the population.  Families are distributed into quintiles, from lowest to highest, based on how much income they receive in a given year.  So, the 20% who received the least in a year are placed in the lowest quintile.  The 20% who received the next lowest amount are placed in the second quintile, and so on up to 5 quintiles. 

 

Inflation makes it difficult to tell just how well you are doing from year to year, because what costs a dollar this year is typically more than what cost a dollar last year.  The Bureau of Labor Statistics (BLS) develops estimates for inflation, which the Census Bureau then uses to adjust household income dollars.  If an analysis that compares income from year to year is shown in constant 2002 dollars, for example, that means dollars from previous years have been adjusted using the BLS inflation rates.  For example, middle income families made $44,113 on average in 1999, compared to $42,802 in 2002.  They didn’t actually receive $44,113 in 1999, though.  It was something a little bit less than that, about $40,845, which has been adjusted upward for inflation because in 1999, $40,845 could buy the same as $44,113 can buy in 2002.

 

 

The distribution of aggregate household income is pretty skewed.  To see just how different high-income families have it from low income-families, let’s look at a picture.

Figure 1.  How much of the pie have I got?

 

As we can see from the chart, families in the highest quintile for income received about half of all income in 2002; the other 80% of families receive the rest.  Compare this to 1980, when 20% of families received only 41% of all income.  Put it this way, in 1980, high-income families made more than 10 times what low-income families made.  In 2002, high-income families made 14.4 times as much as low-income families.  It was skewed then; but it’s even more skewed now.

Figure 2.  How much are we talking about?

 

Low-income families really have low incomes.  That’s not the whole story, of course.  So what if the distribution of income is skewed?  Maybe there’s more than enough for all!  Let’s look at the facts.  In 2002, if your family was in the bottom quintile, you had a household income of just under $10,000.  If your family was among the top 20% of earners, your household income was almost $144,000! 

 

In more than 20 years, we haven’t done much to help low-income families.  So what?  There have always been low-income families and high-income families.  I’ll bet poor people were a lot worse off way back when than they are now.  Right?  Right?!!  Well, not really.  In 1980, low-income families brought in $9,267.  In 2002, they are bringing in about $723 dollars more.  That’s just $60 a month.  What’s your cable bill?

 

 

Hey, but at least we’re doing the right thing, giving everyone the same opportunities as everyone else.  Right?  Right?!!!

 

The shape of your income depends on who’s in charge.  Different presidents have brought with them different economic outlooks for all families, and different outlooks depending on whether you are a low- or a high-income family.  How did low-income families compare with high-income families in the last several administrations?  Here’s a chart:

 

Figure 3.  How did I do compared with everyone else?

 

Income is reduced during a Bush administration.  Both Bushes have presided over economies that brought everyone’s income down.  And look more closely:  During Poppy’s term, low-income families took 7 times the hit of high-income families.  During the first half of Dubya’s term, low-income families have only taken a little less than twice the hit of high-income families so far.  He’s still got time.

 

What about other administrations?  Reagan oversaw improvement in income in his eight years in office.  High-income families saw more than eight times an improvement in their incomes than low-income families.  During the eight years Clinton was in office, referred to as the 90’s boom, high-income families were less than twice as lucky as low-income families, and they still saw their income go up almost 30%. 

 

The chart brings up another interesting issue.  The 2.5% improvement that low-income families had seen during the Reagan years was more than wiped out during Poppy’s administration.  Low-income families saw a whopping 16% increase in their incomes during Clinton’s 8 years in office; more than a third of that has been wiped out in just two years under Dubya.  High-income families hardly felt the economic downturn during Poppy’s reign.  Dubya’s reign has taken away about 10% of the gains high-income families saw while Clinton was in office. 

 

Bush II is worse for your income than Bush I, even if you’re rich!  What’s happened to you since Dubya’s been in office?  I sure hope you’re not in the lowest quintile.  If you are, you’ve taken a 6% hit in income in just the last two years.  If you’re in the second quartile, you’ve taken a 4% hit; in the third quartile you’ve taken a 3% hit, in the fourth quartile you’re a little less than 2% down, and in the highest quartile, you’ve lost more than 3% your income!  Wait a minute!  I thought the richest folks always did better than everyone else!  Not this time.  The bigger they are, the harder they fall, at least lately.  Here are the numbers, in 2002 dollars:

 

Figure 4.  High-income families make a whole lot more than low-income families!

 

In conclusion:

 

·        Low-income families really do have low incomes.  Less than $10,000 per year. 

·        High-income families make a whole lot more than low-income families.  14.4 times as much.

·        Low-income families always bear more than their fair share of an economic downturn. 

·        High-income families always get more than their fair share of a growing economy.

·        Both Bush I and Bush II presided over aggregate and individual income reduction at all levels. 

·        When Reagan was in office, high-income families’ incomes grew a lot and low-income families’ incomes grew not so much.

·        When Clinton was in office, everyone’s income grew a lot. 

 

A Bush in the White House is bad for your paycheck!  Tomato Observer is optimistic about all this.  Tomato observer knows you’re not stupid, just too busy working hard to keep that job you’re not sure will be there next month. 

 

You know what to do.  Vote Democrat this time around, and get rid of the Bushes once and for all. 

 

Next week:  Wealth:  How do I get me summa that?