Jobs and Inequality

We’ve all heard the news that the US median income isn’t going up. Some commentators insist that things have been going downhill ever since 1973.

But David R. Henderson says just a minute. Take a look at the US Census data, particularly Table 3. Distribution of Households by Selected Characteristics within Income Quintiles: 2005.

Throughout the report, U.S. households are categorized by the quintile (fifth) they're in. In 2005, the lowest quintile had incomes of up to $19,178 and the highest quintile had incomes exceeding $91,705. People often picture families at all quintiles looking pretty much alike except for income and ethnicity. But that picture is false.

You see in one quintile, 64.2 percent of householders didn’t work at all during the year. And in another quintile 73.0 percent of householders “worked full-time, year-round.”

Now, which would you think is which?

Exactly. In the lowest quintile nearly two-thirds of householders didn’t work at all. And in the highest quintile they worked like dogs. Actually, in the highest quintile 76.3 percent of households had two or more earners, while in the lowest quintile 58.7 had no earners.

Here are the numbers, extracted from US Census Bureau Income, Poverty, and Health Insurance Coverage in the United States, 2005. Table 3.

Extract from Table 3. Distribution of Households by Selected Characteristics within Income Quintiles: 2005 Characteristic Lowest Quintile “Poor” Highest Quintile “Rich” Number of Earners No earners 58.7% 2.6% One earner 35.9% 21.1% Two or more earners 5.5% 76.3% Work Experience of Householder Worrked full-time, year-round 14.0% 73.0% Worked part-time or part-year 21.9% 15.7% Did not work 64.2% 11.3%

Makes you think, doesn’t it.