Tuesday, November 02, 2010
Still Slaving Over A Hot Spreadsheet
But forget that. No, let us turn to AWI data from Social Security. Social Security gets data from the IRS each year and uses it to compile the Average Wage Index, which is used to figure benefits.
In the process, Social Security publishes wage data by 5K increments each year. The data for 2009 just came out in its corrected version. This is basically W2s compiled by earner. If you go to the above link you can pull it for most recent years.
Here are some tabulated multi-year stats for the average wage index, but that is a "futzed" number. It is not the same as real wages. You will note, however, that Social Security shows that total workers dropped from a height of 155,570,000 in 2007 to 150,918,000 in 2009. That is a huge drop. Even if you worked part-time you would be included in these stats.
What I have done is to compile four years of the detailed data (2006-2009) in larger bracket groups. I wanted to show you some of it.
This graph shows the percentage of earners in each bracket over the four years. The number of earners in the 1 million and over bracket is 0.1 for each year.
There are several interesting things about this data. You note that the biggest percentage drops come in the 30K and under bracket. This is not due to travel up the brackets but rather due to lost jobs.
More interesting are the relatively steady ladders up in the 55K-200K groups. This is one of the reasons I was so curious about September and October income trends. A good percentage of the increase in these brackets are government jobs, and that is where the scythe of economic correction will be concentrated until another downturn.
Looking at this data, I am struck by the disparate impact of this recession on the private sector and on lower income workers. It's remarkable. You probably don't see it in this graph, but stick with me.
Here are aggregate earnings by bracket as a percentage of total SS earnings:
I think this graph makes it obvious unless you are determined not to see it.
Despite all the talk about income inequality, the top bracket is dropping income hard. This is just wage data, but investment income changes should accentuate the difference you see here.
What's so notable is the growth in percentage share in the 55K-200K group, and that is concentrated at the upper levels.
Federal hiring and federal money passed out, which accounts for a lot of government-sourced jobs, has only increased. So you see that it is not really a recession for these folks.
The second graph is really the story behind this election, and it's why pundits are so confused. On the lower end and median, people are getting clobbered. At the top, people are getting clobbered.
The median wage in this country is around 36K. In 2009, almost 55% of the workers earned less than 30K and over 75% of the workers earned less than 50K. Over 25% of the workers earned less than 10K (students, casual and working retirees, plus unemployed). For comparison, in 2007, 25.6% of workers earned less than 10K. The reason why the percentage has dropped is that there are less jobs. Youth unemployment is very high.
In a nation in which the proceeds of taxation disproportionately benefit a relatively small group of workers (about 20 million, or about 14% of all workers), the electorate is forced anti-taxation - basically because they can no longer afford to pay for it.
The "wave" we are seeing is not really a wave for the Republicans. It is a wave against special interests and profiteering at the public's expense. The public is mad at both parties, and this anger will not fade in the next two years, because not much is going to change in the next few years.
In 2012, there could really be a third party. And then the axe will fall.
Frankly, this is the only national election cycle of my lifetime in which the Fed completely overshadows the voting. I can't consider this a good sign.
Anyway, I'll be back posting more on economics tomorrow or the next day. The Fed is due to Doom at 2:15 today.
The retailers and manufacturers are cutting way back on support spending. I do merchandising, which is building and maintaining displays in retail stores. The work has dried up. Folks I know who have been doing this for 20 years say they've never seen it so bad.
And I am sorry to tell you that Dr. Bernanke isn't going to be helping you any. Enjoy your fifteen minutes with the wire brush.
"The number of federal workers earning $150,000 or more a year has soared tenfold in the past five years and doubled since President Obama took office, a USA TODAY analysis finds."
Links to this post: