A Bush in the oval office is bad for your paycheck
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?