How Average is Your Income?

With the Economic Policy Institute’s interactive chart of average incomes in the U.S. between 1917 and 2008, it is easy to lose focus as your eyes shift from one baffling number to the next.  In the time that it took to go from radio to the internet, average incomes only grew by $38,216?  …  And that growth was split 51%/49% between 10% and 90% of the population?

There’s no end to the configurations you can explore in the chart and all of them lay out the story in a different way.  For instance, here’s a stroll through the data by decade that is a real tearjerker.

Oh, things have changed alright.

[EPI’s The State of Working America chart via The Atlantic]

Making Lemonade from an Old and Somewhat Flawed Chart

Yesterday it was a map, today it’s a chart.

The point of this one is to say that, to be part of the world’s richest 1%, all you have to do is make $34,900 a year, after taxes.

That’s per person by household, of course, so if you’ve got a significant other, double it, and if you’ve got a couple of kids, quadruple it.  It raises the bar a bit, but the big shocker is: 29 million, or almost half, of the world’s richest 1% are Americans, just like you!

Then there’s some other countries, take a look…

Now, this chart was part of an article on CNNMoney only a month ago, but we are told the data is from 2005.  Then you count the little chart people, find only 60, and rightly exclaim, “Hey, we hit 6 billion in 1999.”  For 2005, this chart would need four or five more people depending on which way you round it.  It might not seem like much or that long of a time, but world GDP went from $40B to $60B in the same period.  The question is, how would it change our $34,900 number?

But say you do top that number, then look around your surroundings and rightly exclaim, “Hey, I’m not rich.”  Just read the end of the article, silly.  We’re talking about the entire world here.  The world in which the global median income is $1,225/year. “In the grand scheme of things, even the poorest 5% of Americans are better off financially than two thirds of the entire world.”  …  That’s where the record skips.  If you want to hear some reactions to this conclusion, check out the 1,000+ comments that have piled up.  They range from pointing out the differences in cost of living around the world to accusing the writer of trying to take the heat off America’s 1%.

The disconnect is from measuring richness by income, as opposed to wealth.  Yes, remember wealth.  That’s what you’re missing.  Assets.  Your life should make sense again as soon as you hear that it takes $500,000 of assets to put you into the richest 1% worldwide.

How many little chart people would the U.S. get in this scenario?  37%, or 22 people.  The chart above was only off by 11%, but it completely missed the boat on Japan, which should have 16 people.  Anyway, what about the American 1%?  How much yearly income does it take to get in that club?  Well if you believe CNNMoney, they say it was $343, 927 in 2009, a measly 10 times what they were selling last month.

And before you think they might be trying to show both sides, note that this second article starts out by baiting you with the idea that it would take a million dollar income to be in the top 1%.  Surprise, you only need a third of a million!   Or, 37 times what the poorest 20% of Americans make on average, 14 times the next, 7.7 times the middle, and 4 times the fourth quintile.

As ThinkProgress would love to explain further, the American 1% owns 40% of the nation’s wealth, including 50% of all U.S. stocks, bonds and mutual funds, and takes home 24% of the nation’s income.

When it comes to world wealth, it looks a lot like yesterday’s map.

And back where we started, the crowd walks away wondering what it was all about anyhow.

[Map from World Institute for Development Economics Research via Gizmag]

Making Lemonade from an Old and Somewhat Flawed Map

We begin with a map.  A map from TD-Architects, which seems to have a lot of interesting content though remarkably difficult navigation.  A map that might be from 2006 or 2007 (or 2009?).  The source of the income data?  Unknown.

Anyway, the idea of the map is that 73% of the world’s income is being protected on all sides by walls or, as they are called, “heavily guarded border zones” in an effort to create the “greatest wall” ever built on this planet.  Go ahead, take a look…

(click to enlarge)

If you want get into the flaws of the map, reddit has conveniently ripped it apart on multiple occasions, including this 400+ comment thread.  The gist is that “heavily guarded” is an exaggeration, the selections are arbitrary, and there are plenty of wealthy areas outside these borders.  …  But is it still conceptually interesting?

While looking into the income data, it turned out that these countries within the so-called walled world match up with the World Bank‘s list of “High Income” members of the Organisation for Economic Co-operation and Development (OECD).  Since 1973, these countries have made 70-80% of the world’s income year after year, that is until 2006 when their percentage started to drop.  The situation really is changing, and as of 2010 the high income OCEDers were down to 63%, but the map really is a SNapshot Of Globalization, which is what TD’s SNOGs are all about.

Tomorrow we’ll use a somewhat flawed chart to take this a step further.

For more on those walls: DMZ, Australian Defense Force, Mexico-United States barrier, EU Maritime Borders, Melilla & Ceuta border fences, Schengen Area, Israeli West Bank barrier.

For more on the data: The World Bank is offering a killer 200,000+ line spreadsheet full of all kinds of data or if you’re more of a charts person, check it out via Google’s Public Data Explorer.

[Map via Information is Beautiful]