mini

$54.4 is two full-time minimum wage jobs plus some overtime, or a second job. That's the median income. That's how many, many families make ends meet (if you call that "meeting"). And they are indeed living in NYC, and in New Jersey. Now, mind you, that $54.4 is the median; many are making less.

northeastmom

Living in the tri-state area, yes, they are. Living in my immediate neighborhood, no, I can't see that. I don't know of a single home with a pricetag under 450,000 (that would be a cape cod fixer upper). There are not many rental units around.

Shrinkrap

Okay, yeah...I just found this...

"The median is the middle of a distribution: half the scores are above the median and half are below the median. The median is less sensitive to extreme scores than the mean and this makes it a better measure than the mean for highly skewed distributions. The median income is usually more informative than the mean income, for example."

hayden

Take that same NJ family you're talking about, earning 175K with two kids in college. With their income, financial aid won't be in the cards. So assume full in-state NJ college costs. In addition to all the costs b&p laid out, this family with 2 kids in college will have to pay $40K per year (i.e., 20K annually per child) to their State U. That's $80K anual pre-tax income paid out for 4 years. So all of a sudden, the difference has narrowed. The person making 54K per annum won't be paying anywhere near the same for college, since they will qualify for financial aid. I'm not saying that the family earning 200K is the same as the family earning 54K. I'm just saying that the differences in their day-to-day concerns are not that far apart.

mini

And I am strongly disagreeing.

But the point is - they are commuting into NYC just as folks in your neighborhood are. But the folks in your neighborhood, for the most part, have a tax-deductible housing asset (that usually grows in value), pensions, health care, maybe a little stock, perhaps some vacation time, and a car or two that usually runs. In other words, far more in common with the family earning $1m (but working), than with the median family, which often has none of the above. Oh, and maybe a decent public school to attend. Three-quarters of the children of the median family won't be attending college at all (some will be contributing income to their families)(and about a quarter or so won't have graduated from high school); many of the rest will be at the community college part-time or in the evenings.

Oh, and savings toward college over the past 20 years (like the $1m family)? Forget it. More likely paying off uninsured medical expenses over the past 20 years.

sueinphilly

that person earning 175K was supposed to be saving all along (let's assume they didn't get a 100K raise last years). Nobody expects them to pay 40K out of current income. The person earning 54K would never have been able to save as much as someone earning 175K, no matter what neighborhood they live in.

lets say someone with 175K income has efc of 45K and the one with 54K income has efc of 13K, it's about the same percentage.

But you know what, both families pay the same for that gallon of milk and loaf of bread and gallon of gas.

oldfort

Isn't that American's idea of middle class - a small house (with white picket fence), 2 of everything (cars, bathrooms, kids, tvs), a cabin (without electricity or indoor plumbing) by a lake? To get all that in NJ, you need at least 200,000. To make 54,000, you would be living in an illegal multi family home in my town.

northeastmom

Mini, yes, the public schools are decent, depending upon the community. Tax deductions for yes, hefty property taxes, yes that too. Pensions, no, health care, no-we fund both ourselves. We take vacation, and we lose pay because of self employment. We live in a community with those who make millions, not just a million annually, as well as alongside the teacher earning less than your niece (100k perhaps+ bennies). I feel that I have more in common with the teacher (single wage earning family), than someone earning over a million per year.

Absolutely, correct, oldfort.

northeastmom

Yes, same cost for bread, but not the same cost for health insurance, home owner insurance, and auto insurance in NJ vs. some other areas in the US. Certainly not the same cost for commuting costs if they have them, and property taxes. That needs to be discussed as well as the cost of a loaf of bread.

emeraldkity4

This thread reminds me of this song from Into the Wild

mini

Must be lots of illegal multi-family houses in New Jersey, 'cause that's what the median family earns. To be fair, the median family income in New Jersey is actually $77k, significantly higher than in the NYC area.

If the corporate socialists have their way, we will all be living like that pretty soon. (actually, pretty good from an ecological perspective. )

northeastmom

So, if someone has more than they need, yes, lets call them crazy, and lets use the Robinhood approach and completely destroy the middle class! Great idea, indeed!

Oh, and we certainly do not have the cabin.

hayden

sueinphilly - yes, I agree. But money itself is fungible: wether it's last year's earnings or today's, it's still 80K pre-tax that will be spent.

And your point that the bread and milk cost the same for both families is exactly what I'm talking about: discretionary income. We are thinking in terms of algebraic differences between the 40 - 250K earners, while in fact the difference is geometric between those who make 40 - 250K, vs those who make 1mm or more.

Can we as a society even comprehend people making 3 billion a year? Does anyone truly make a contribution in business that deserves that kind of money? I think it's ridiculous.

And while we're discussing whether the person making 200K is really well off versus their neighbor two block away making 54K, we see CEO's failing, with major poor business decisions, being fired and paid millions and millions of dollars just to get them to go away. Talk about stupidity. There is something major league wrong with a business model that pays millions to CEO's who fail.

Shrinkrap

Any evidence of a "bimodal" distribution in places like NYC and SF, with little "middleclass"? Where does one find these figures?

mini

Hayden - half right - you wrote vs. those who make $1mm "or more".

On average, the family making $250k will have, on average 32 times the assets of the family making 50k. The family making $1m will only have, on average, 16x the assets of one making $250k. In other words, as already noted, they have more in common. They may live in the same neighborhoods, drive similar cars, go to the same beauty parlors, etc.

As Oldfort well noted, the family making $50k is more likely living in illegal multi-family homes.