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Friday, November 13, 2015

Plutonomy and the Evisceration of the Middle Class

Mean, Median, Mode

One of the first things we learn about statistics as kids is the concept of Mean, Median, and Mode, which are different kinds of averages. The "mean" simply means the arithmetic average wherein you add up all the numbers and divide the resulting number by the number of numbers.  The "median" is the middle value in the list of numbers.  The "mode" is the value that occurs most often.  The mean, median, and mode of a set of numbers can be very different from each other.

These differences are illustrated in the Wage Statistics for 2014 released by the Social Security Administration last October 2015.

Wage Statistics 2014
Social Security Administration






Net Compensation Interval (In US $) Number of Wage Earners Cumulative Number Percent of Total Aggregate Amount Average Amount
$0.01 — 4,999.99 22,574,440 22,574,440 14.2708 $46,647,919,125.68 $2,066.40
5,000.00 — 9,999.99 13,848,841 36,423,281 23.0255 $102,586,913,092.61 $7,407.62
10,000.00 — 14,999.99 12,329,270 48,752,551 30.8196 $153,566,802,438.45 $12,455.47
15,000.00 — 19,999.99 11,505,776 60,258,327 38.0932 $200,878,198,035.07 $17,458.90
20,000.00 — 24,999.99 10,918,555 71,176,882 44.9955 $245,317,570,246.88 $22,467.95
25,000.00 — 29,999.99 10,192,863 81,369,745 51.4390 $279,865,461,187.05 $27,457.00
30,000.00 — 34,999.99 9,487,840 90,857,585 57.4369 $307,828,947,411.16 $32,444.58
35,000.00 — 39,999.99 8,578,215 99,435,800 62.8597 $321,200,755,103.44 $37,443.78
40,000.00 — 44,999.99 7,553,972 106,989,772 67.6351 $320,563,569,965.15 $42,436.43
45,000.00 — 49,999.99 6,542,882 113,532,654 71.7713 $310,391,706,424.23 $47,439.60
50,000.00 — 54,999.99 5,723,269 119,255,923 75.3893 $300,016,377,448.51 $52,420.46
55,000.00 — 59,999.99 4,846,517 124,102,440 78.4531 $278,354,367,841.41 $57,433.90
60,000.00 — 64,999.99 4,201,232 128,303,672 81.1090 $262,203,932,128.68 $62,411.20
65,000.00 — 69,999.99 3,573,471 131,877,143 83.3680 $240,948,179,180.40 $67,426.93
70,000.00 — 74,999.99 3,094,739 134,971,882 85.3244 $224,145,278,103.36 $72,427.85
75,000.00 — 79,999.99 2,684,481 137,656,363 87.0214 $207,853,372,824.62 $77,427.77
80,000.00 — 84,999.99 2,297,338 139,953,701 88.4737 $189,370,862,869.17 $82,430.56
85,000.00 — 89,999.99 1,975,400 141,929,101 89.7225 $172,719,042,418.70 $87,434.97
90,000.00 — 94,999.99 1,714,370 143,643,471 90.8062 $158,442,931,588.44 $92,420.50
95,000.00 — 99,999.99 1,486,636 145,130,107 91.7460 $144,858,203,365.61 $97,440.26
100,000.00 — 104,999.99 1,309,068 146,439,175 92.5736 $134,083,282,259.67 $102,426.52
105,000.00 — 109,999.99 1,117,128 147,556,303 93.2798 $120,020,513,136.11 $107,436.67
110,000.00 — 114,999.99 977,055 148,533,358 93.8975 $109,855,105,705.14 $112,434.93
115,000.00 — 119,999.99 865,889 149,399,247 94.4448 $101,693,061,676.62 $117,443.53
120,000.00 — 124,999.99 773,339 150,172,586 94.9337 $94,660,281,091.31 $122,404.64
125,000.00 — 129,999.99 673,971 150,846,557 95.3598 $85,886,152,964.93 $127,433.01
130,000.00 — 134,999.99 595,827 151,442,384 95.7364 $78,899,843,713.01 $132,420.73
135,000.00 — 139,999.99 527,341 151,969,725 96.0698 $72,476,546,845.30 $137,437.72
140,000.00 — 144,999.99 466,992 152,436,717 96.3650 $66,519,743,635.12 $142,443.00
145,000.00 — 149,999.99 419,003 152,855,720 96.6299 $61,787,674,520.19 $147,463.56
150,000.00 — 154,999.99 384,581 153,240,301 96.8730 $58,607,775,121.57 $152,393.84
155,000.00 — 159,999.99 335,391 153,575,692 97.0850 $52,801,735,517.69 $157,433.37
160,000.00 — 164,999.99 296,048 153,871,740 97.2722 $48,087,213,596.86 $162,430.46
165,000.00 — 169,999.99 265,309 154,137,049 97.4399 $44,426,198,104.69 $167,450.78
170,000.00 — 174,999.99 239,515 154,376,564 97.5913 $41,304,379,348.95 $172,450.07
175,000.00 — 179,999.99 216,255 154,592,819 97.7280 $38,370,042,895.27 $177,429.62
180,000.00 — 184,999.99 200,592 154,793,411 97.8548 $36,588,064,085.78 $182,400.42
185,000.00 — 189,999.99 179,005 154,972,416 97.9680 $33,554,727,208.93 $187,451.34
190,000.00 — 194,999.99 165,277 155,137,693 98.0725 $31,807,897,759.84 $192,452.05
195,000.00 — 199,999.99 154,070 155,291,763 98.1699 $30,425,466,536.83 $197,478.20
200,000.00 — 249,999.99 1,039,897 156,331,660 98.8273 $230,863,458,226.21 $222,006.08
250,000.00 — 299,999.99 565,105 156,896,765 99.1845 $153,945,762,663.99 $272,419.75
300,000.00 — 349,999.99 333,584 157,230,349 99.3954 $107,708,119,615.81 $322,881.55
350,000.00 — 399,999.99 219,923 157,450,272 99.5344 $82,117,070,706.61 $373,390.10
400,000.00 — 449,999.99 151,162 157,601,434 99.6300 $63,997,346,472.50 $423,369.28
450,000.00 — 499,999.99 108,881 157,710,315 99.6988 $51,583,042,398.64 $473,756.14
500,000.00 — 999,999.99 345,935 158,056,250 99.9175 $230,331,407,862.96 $665,822.79
1,000,000.00 — 1,499,999.99 65,548 158,121,798 99.9589 $78,672,933,288.58 $1,200,233.92
1,500,000.00 — 1,999,999.99 24,140 158,145,938 99.9742 $41,431,838,733.52 $1,716,314.78
2,000,000.00 — 2,499,999.99 12,137 158,158,075 99.9819 $26,997,226,154.27 $2,224,373.91
2,500,000.00 — 2,999,999.99 6,871 158,164,946 99.9862 $18,747,446,313.27 $2,728,488.77
3,000,000.00 — 3,499,999.99 4,799 158,169,745 99.9892 $15,507,304,422.66 $3,231,361.62
3,500,000.00 — 3,999,999.99 3,258 158,173,003 99.9913 $12,166,741,762.34 $3,734,420.43
4,000,000.00 — 4,499,999.99 2,353 158,175,356 99.9928 $9,970,953,222.98 $4,237,549.18
4,500,000.00 — 4,999,999.99 1,822 158,177,178 99.9939 $8,633,941,395.34 $4,738,716.46
5,000,000.00 — 9,999,999.99 6,468 158,183,646 99.9980 $43,887,775,808.42 $6,785,370.41
10,000,000.00 — 19,999,999.99 2,230 158,185,876 99.9994 $30,065,006,121.19 $13,482,065.53
20,000,000.00 — 49,999,999.99 776 158,186,652 99.9999 $22,450,911,983.01 $28,931,587.61
50,000,000.00 and over 134 158,186,786 100.0000 $11,564,829,969.82 $86,304,701.27

158,186,786

$7,050,259,213,644.55 $44,569.20


Graphically, this data looks like this:





This report took data from 158.2 million wage earners who made an aggregate wage of $7.05 trillion dollars.  The mean wage per wage earner, therefore, was about $44,569.20 for 2014.  Now, what is the median?  The table above shows that 51.439% of the wage earners earned less than $30,000.00 per year.  This is not exactly the median income but it is close enough. The above graph show that around 22,574 million people or 14.27% of the wage earners earned less than $5,000.00 a year in compensation.



What does this all mean?

Simply put, a huge chunk of the population is poor.


 In 2014, there were around 1.27 earners per household:


No Earners One Earners Two Earners Three Earners Four or More Earners Total
Number (thousands) 29,883 45,821 39,162 7,342 2,379 124,587
% of Total 23.99% 36.78% 31.43% 5.89% 1.91% 100.00%


There were also 2.58 members per household.  Under the 2015 Federal Poverty Level Guidelines, a household of three people must earn $20,090.00 or less to qualify for federal cost assistance such as Medicaid, CHIP, and taxes.

Simplified 2015 FPL Guidelines you’ll use for 2016 cost assistance, 2015 Medicaid and CHIP, and taxes filed April 15, 2017
Persons in household 2015 Federal
Poverty Level threshold
100% FPL
1 $11,770.00
2 $15,930.00
3 $20,090.00
4 $24,250.00
5 $28,410.00
6 $32,570.00
7 $36,730.00
8 $40,890.00


This means that at least 38.09% of wage earners are qualified for federal assistance.  If the number of people per household is stretched to five, then a staggering 51% of the wage earners can be considered poor enough to qualify for federal assistance.






This information is not new. It was pointed out by several other blogs, most notably by Zerohedge.

These findings are further corroborated by the Credit Suisse Global Wealth Report.  Credit Suisse is a multinational financial services holding company with an extensive Private Banking and Asset Management divisions.  They market their financial services to Ultra High Net Worth Individuals. In other words, it is in their best interest to know who is rich and who isn't in each country they have operations in.

According to Credit Suisse, 50% of US adults are classified as Poor, another 37.70% are classified as Middle Class, and just 12.30% are considered Upper Class in 2015.




The Upper Class own a staggering 79.10% or $67.948 trillion of the country's wealth.  The Middle Class own 16.837 trillion or less than 20% of the nation's wealth.  The Poor? They own a mere $1.117 trillion or a measly 1.30% of the nation's wealth. Got it? Around 50% of US adults own a little over 1% of the country's wealth.



The astounding growth in the wealth of the Upper Class since 2000 has widened the gap between Mean Wealth per Adult and the Median Wealth per Adult.



In 2000, Median Wealth per Adult was 21.11% of Mean Wealth per Adult.  In 2015, that ratio is just 14.10%.



This ratio puts us just below emerging market darlings (or former darlings) such as Brazil (18.82%), India (19.94%), Indonesia (17.88%) and Thailand (17.24%).  We are just above oligarchic Russia (11.84%).


According to Credit Suisse, just 6.40% of the US Adult Population had wealth greater $1 million in 2015.  



But the bulk (86%) of those High Net Worth Individuals or HNWI just had $5 million or less of wealth.  Around 9% of  had $5 million to $10 million in wealth. 



So even among the HNWI who own 75.60% of the country's wealth, the numbers are skewed by the Top 1% of adults, who own 37.30% of the wealth of the entire nation.






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