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Lifetime Earnings in the United States over Six Decades

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Re: Lifetime Earnings in the United States over Six Decades

#31

Post by sbagel »

Studying income inequality in the US by gender and age group while completely ignoring race feels wrong when it's such an impactful variable, especially considering it's getting worse over time.

In 2016, the median net worth of non-Hispanic White households was $143,600. The median net worth of Black households was $12,920. Between 1983 and 2013, White households saw their wealth increased by 14%. But during the same period, Black household wealth declined 75%. Median Hispanic household wealth declined 50%.

https://inequality.org/facts/racial-inequality/#racial-incom...

https://www.federalreserve.gov/econres/notes/feds-notes/disp...

Re: Lifetime Earnings in the United States over Six Decades

#32

Post by brk »

nend wrote: post #20
brk wrote: post #13

Earlier quoted context omitted.

I think that most high income earners stay at that stage for the majority of their career after reaching that level. While I know there are exceptions and odd examples, IMO people in general have little desire to take a large pay cut, so if you manage to get yourself to the point you are in the top 2% of earners, why would you step back?

If I had to guess, I agree most people probably continue to earn high wages once at that level. But I don't think it's a question of how often people decline high wages to take a lower paying job (although this obviously happens as well). It's whether they can continuously be offered high wages as their career continues.

Good point. In my experience, the higher earning potential can be maintained, though overall salary growth is lower, as you start to hit a bit of a theoretical earnings ceiling. Though, that is generally of limited consequence when you're at those levels.

Another issue not addressed is lack of employment flexibility. If you are in the top 5% of earners, by extension you are likely limited to the top 5% of all available positions. Whereas someone with a more "mainstream" income can likely switch employers or industries, or even locations, with less impact (or maybe even positive impact, moving into a region with a better pay:cost-of-living ratio).

Re: Lifetime Earnings in the United States over Six Decades

#33

Post by otnihoithiu »

mdorazio wrote: post #23
prennert wrote: post #6

I was hoping to see how much people earn in their lifetime. And how that changed over time. I was wondering the other day other how many years are high earners are actually earning a very high income. In-equality wise it is very different if people in the 2 percentile of income stay there for a decade or more or if they are in that income bracket only for a few years while doing a specific job and drop down to lower…

For your second question see [1]. Average income tops out for most people around age 40 and they stay at that level for most of the rest of their main career. [1] https://www.bls.gov/news.release/wkyeng.t03.htm

Wow, you can clearly see the degree to which the housing recession damaged the lifetime earnings of gen Y.

Re: Lifetime Earnings in the United States over Six Decades

#34

Post by dfilppi »

sbagel wrote: post #31

Studying income inequality in the US by gender and age group while completely ignoring race feels wrong when it's such an impactful variable, especially considering it's getting worse over time. In 2016, the median net worth of non-Hispanic White households was $143,600. The median net worth of Black households was $12,920. Between 1983 and 2013, White households saw their wealth increased by 14%. But during the same…

You switched from income to wealth

Re: Lifetime Earnings in the United States over Six Decades

#35

Post by otnihoithiu »

lotsofpulp wrote: post #24
nend wrote: post #20

Earlier quoted context omitted.

If I had to guess, I agree most people probably continue to earn high wages once at that level. But I don't think it's a question of how often people decline high wages to take a lower paying job (although this obviously happens as well). It's whether they can continuously be offered high wages as their career continues.

At least part of that is probably a function of how hard the work is on one’s body. A hard labor worker with a high income in 30s/40s is presumably more likely to lose that income in 50s/60s/70s than a non hard labor worker (e.g. office job).

Highly paid, older office workers are first in line when layoffs happen. Those people then face age discrimination trying to get new positions. Can really derail your earnings.

Re: Lifetime Earnings in the United States over Six Decades

#36

Post by otnihoithiu »

frankbreetz wrote: post #22

Who knew such an admiral goal: "having women entering the workforce en mass" would have such a depressing result: "it is now much more difficult for a family to survive on one income" What is the solution? Obviously, we would like to keep moving forward and allow anyone that is willing and able to do the job they want, but if anyone would like to be with their children, or take time off while a spouse works, that sho…

The cost of living went up because households with two incomes outbid households with one income for scarce goods like housing.

I'm not sure how it could have played out differently. Women have always, always worked to support themselves and their families. But the invention of household labor saving devices freed up enormous amounts of time that would have been spent primarily in the household. Of course those women would look for additional opportunities to support their families. It's the same story as men moving from farm labor to factory labor as farm labor became increasingly mechanized.

Re: Lifetime Earnings in the United States over Six Decades

#37

Post by lotsofpulp »

brk wrote: post #32
nend wrote: post #20

Earlier quoted context omitted.

If I had to guess, I agree most people probably continue to earn high wages once at that level. But I don't think it's a question of how often people decline high wages to take a lower paying job (although this obviously happens as well). It's whether they can continuously be offered high wages as their career continues.

Good point. In my experience, the higher earning potential can be maintained, though overall salary growth is lower, as you start to hit a bit of a theoretical earnings ceiling. Though, that is generally of limited consequence when you're at those levels. Another issue not addressed is lack of employment flexibility. If you are in the top 5% of earners, by extension you are likely limited to the top 5% of all availab…

If you are in the top 5% of earners, you have the ability to save enough money so you can switch to whatever level of employment you want. Someone with a more "mainstream" income barely or never saves enough money to have the kind of security to just try out other employers or fields or regions.

I am willing to bet a top 5% earner would be able to land a top quintile job just by asking people in their network.

Re: Lifetime Earnings in the United States over Six Decades

#38

Post by spywaregorilla »

boringg wrote: post #17

Why would you use the median - plot a boxplot in here and get some good data visualizations. Median barely tells the story. Poor data visualization is such a pet peeve...especially for a university.

A boxplot conveys more information about the distribution, but makes it harder to tell a concise story about comparing trends between multiple groups over time. Both are appropriate here.

Re: Lifetime Earnings in the United States over Six Decades

#39

Post by mahogany »

frankbreetz wrote: post #22

Who knew such an admiral goal: "having women entering the workforce en mass" would have such a depressing result: "it is now much more difficult for a family to survive on one income" What is the solution? Obviously, we would like to keep moving forward and allow anyone that is willing and able to do the job they want, but if anyone would like to be with their children, or take time off while a spouse works, that sho…

> Who knew such an admiral goal: "having women entering the workforce en mass" would have such a depressing result: "it is now much more difficult for a family to survive on one income"

Is it clear that the causation is only in that direction? I am not familiar with economic history back into the 40s and 50s when a lot of women started entering the workforce (note more than 25% of the civilian workforce were women already in 1945 [1]), but could it have been that it's partly the other way around?

In other words, how much of "it is becoming more difficult for a family to survive on one income" caused the need for "more women entering the workforce en mass"?

[1] https://www.dol.gov/agencies/wb/data/facts-over-time/women-i...

Re: Lifetime Earnings in the United States over Six Decades

#40

Post by dlp211 »

Retric wrote: post #12
prennert wrote: post #6

I was hoping to see how much people earn in their lifetime. And how that changed over time. I was wondering the other day other how many years are high earners are actually earning a very high income. In-equality wise it is very different if people in the 2 percentile of income stay there for a decade or more or if they are in that income bracket only for a few years while doing a specific job and drop down to lower…

High income brackets are vastly higher incomes so people at low incomes (~30k) rarely reach that level. In 2020, the top 1% was $531,020.00 / year, that’s rare, 2% is $387,116.00 again a huge jump for most people. However, some people very briefly enter high income status via a windfall. But, even here it’s mostly people with high incomes rather than poor people winning the lottery etc.

That's household income. Top 1% individual income starts at $361k. To be in the top 10%, you need to make more than $125k.
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