Generation effect, income up for all and wealth down for most. (bankruptcy, divorced)

[Malloric]

From Pew Economic Mobility Project:

Income is up across the board:



Wealth down for the bottom 60% of Americans:


Richer Rich, and Poorer Poor - NYTimes.com

[Teak]

And your point, comrade?

[Escort Rider]

To the OP - thanks for posting. Nice to see some solid data from a credible source instead of an ideological rant. Very interesting.

[enemy country]

Just the way reagan planed it.

[Majordomo]

I think a large part of the decrease in wealth among lower income earners is due to the average American's inability to manage their own money. Most Americans are better at spending money than saving or investing it. Even lottery winners in the US can spend their way into bankruptcy. We really need to start making basic economics, business, investing, and personal finance courses mandatory in high school. We neglected to teach our citizens these subjects and now we're in a financial mess because our population is clueless when it comes to money. Most of the foreclosures, bankruptcies, depleted savings, mountains of debt, and our last recession could have been avoided but we didn't teach many of our young people how to manage money so they made very poor financial decisions as adults. Now we're all paying the price for their mistakes.

[Saritaschihuahua]

How do the prices of everything compare between the parents and the children's generations? For ex., how much was a gallon of milk, a gallon of gas, and a gallon of olive oil, a house, a pair of J.C. Penney's dress pants, a doctor's visit, a safety pin, a haircut, a Holiday Inn room for one night, and 1 lb of chicken, for the parents versus the kids?

Originally Posted by Malloric

From Pew Economic Mobility Project:

Income is up across the board:



Wealth down for the bottom 60% of Americans:


Richer Rich, and Poorer Poor - NYTimes.com

[ALackOfCreativity]

Also keep in mind that they are talking about "family" income, the composition of the household matters.

At the top, you see more two income (both with and without kids) families, raising both average income and average wealth considerably at the top. Less households with more income and wealth each = higher family averages

At the bottom, you see the disintegration of the family on a major level, seeing both a lot of single people, and even worse from a financial perspective, single parents. This makes average income and wealth on the household level look even worse than it would be otherwise. More households with lower income and wealth each = lower family averages.

Of course, this statistical effect also has real financial impacts with regards to wealth accumulation: it is a lot cheaper in total to maintain one married household than two divorced or never-married households. From rent to bulk buying food to anything else you can get a better deal on per person by buying in 'bulk', it makes a difference. Not to mention people are a lot more likely to go to an effort to save money for the sake of passing it on to their kids when they are the one raising said kids.