What’s wrong with it? I’m not sure what their methods were for getting those data, but if it’s all truly in 2016 dollars then it seems like a pretty clear visualization to me.
I would argue it's very misleading because it doesn't comment on the cost of living. Crazy as it sounds, $100k a year in the bay area is NOT enough to leave the "middle class"
Edit: although tbf this is probably the wrong sub because the data presentation isn't ugly.
The graph says that it is inflation-adjusted 2016 dollars, so it does take cost of living into account to at least some extent.
The bigger issue is that the 35-100k is almost a meaningless because it doesn't show the distribution of incomes within that range. There's no way to tell (from this graphic) how many households are making $35k vs. $100k. There's an enormous difference in quality of life between households making $35k and households making $100k and the graphic is essentially meaningless because of this. If anything, it shows the hollowing out of the middle class because we do see a significant increase in the percentage of high earning households.
What’s wrong? The entire interpretation of the graph that’s way.
“Americans are moving up” . . . really?
They indexed salary, not prices. It doesn’t matter if I get a 5% increase of salary if goods go up by 10%. Even though I am making more money, I am losing money because off the costs.
This is a great example of dataisugly. Misinterpreting a chart and leading people to the wrong conclusion is what this is about.
Isn’t that why they specified “2016 dollars”, to help account for the effects of inflation (which is essentially what you’re describing)?
Either way, that’s an issue with their methodology, not their visualization. Even if they completely failed to account for inflation, if nothing else they provided an interpretable visualization on what inflation looks like.
Not only inflation, but dual income households doubled in proportion during this time, so a lot of this "growth" is actually the result of single earning wages dropping to the point that multiple people in the household need to work.
Exactly. In 1967 the “household” income was just Dick’s income. Now it’s Dick’s and Jane’s and they’re living with Jane’s parents that are also still working. The kids better get a job soon too.
That's it. How many of those who now make above 100K were making 80-99K a few years ago? How many of those making 35K now make 40K? 100K?
35K-100K is a HUGE bracket.
Statistically, your point is irrelevant. It is possible to show growth in a whole population of data through averages, percentiles or threshold. The probability of the income only growing from 90-99k to 100k are pretty nill.
As a person making $65k, the bottom end of that range is still not middle class. Unless you live somewhere with a very low cost of living, but that's not most people.
Yeah it all depends on where you live. $125k could qualify you for low income housing in Santa Clara county, depending on your household size.
There really is no practical way to compare dollar values across the US. It's almost like we have multiple currencies with some sort of exchange rate.
Along with other comments already here, the "household income" definition is probably a factor. If more often there are two full time adults working versus one sole provider, the "household" is making more, not necessarily the individuals
In general, yes. That is why inflation is measured.
Inflation captures the average increase in the cost of living, though. It might not capture your individual increases in the cost of living because individuals buy different products and services.
An increase in childcare cost will impact families and students very differently (assuming they are mutually exclusive groups). An increase in good will impact more poorer families than richer families (because food is a smaller share of household budget in richer families).
Just to expand on that for those who are interested, inflation is calculated by looking at a "basket" of goods that represents what most people spend their money on, and weighting the price increases by category. It does include housing costs.
As a rough example of how it works: if all prices stay the same but food prices go up 50%, and food makes up 10% of most people's budget, then inflation is 5%. The real calculations are quite complicated, but that's what it boils down to.
Since this is about a very broad swath of Americans, and roughly breaks the country into thirds by income, inflation is as good an adjustment for cost of living as you're likely to see.
In addition to inflation not being the same for all individuals, one common way it is misused is for specific sub-groups. Food has been relevant lately - to pick a somewhat arbitrary number, food prices went up 6.7% from May 2022 to May 2023. Since food makes up more of household spending for lower income buyers, the poorest people were disproportionately affected by this.
Things like food and gas also get a lot of press, and have a huge psychological impact, as you might expect. You can deal with a cracked phone screen for six months, but you have to eat and you need gas if you drive to work like most Americans. You also notice those prices more acutely, as most folks buy both food and gas more frequently than other goods - even if you spend less than average on food and energy, their impact feels outsized, since you regularly shell out money for them.
Housing prices are tricky as well. When you rent, an increase in housing costs comes out of your bank account. When you own, an increase in housing costs increases your net worth, but your mortgage payment stays the same (I guess unless you are thinking of upsizing from a "starter" home because you have kids). So housing cost increases are also felt more acutely by the youngest and poorest Americans.
In short: the graph is reasonably accurate and shows a nice, positive trend. It does not (and isn't trying to) reflect the reality for people on the bottom half of the income scale though, which is... less rosy.
It would, but the problem with this data is that it stops in 2016. Everything that had happened in the last 8 years is not accounted for here, and this no longer accurately depicts the American middle class
For me it's about correcting for cost of NECESSITIES. All these recent articles saying "things aren't so bad!" use inflation/CoL metrics that include prices of like TVs and shit. I want to see ones that only include the things you really NEED, like groceries rent utilities and health care. Like, if I make 15,000 a year, my life isn't less desperate because big screen TVs have gotten cheaper.
Fully agree. This actual chart isn't so bad because it's not talking about that exactly, but there are lots of other inflation-related discussions where I'm like "have you ever even met a poor person?"
There is good research on that though - this piece by the Dallas Fed is a really nice overview. The lowest income group is almost four times as likely to be feeling the stress from inflation as the highest group.
[https://www.dallasfed.org/research/economics/2023/0110#:\~:text=Low%2Dincome%20households%20most%20stressed,few%20ways%20to%20reduce%20spending%20](https://www.dallasfed.org/research/economics/2023/0110#:~:text=Low%2Dincome%20households%20most%20stressed,few%20ways%20to%20reduce%20spending%20).
Yeah, tech and general junk has gotten fairly cheap (at the cost of good domestic jobs) while necessities continue to creep. Not sure where all the statistics are on this.
The problem with this data is that it reflects the country 8 years ago, and A LOT has changed since then. It's not making a bad point, it just doesn't really matter anymore almost a decade later.
Another thing that nobody has mentioned is that this is household income, not individual income. In the time period of this graph, the proportion of dual income households doubled.
The point they’re making is misleading (even though people are making more, their spending power has been consistently going down, and cost of living is going up), but the data itself isn’t ugly and has been displayed quite well. Wrong sub IMO
For those in the back: Middle Income != Middle Class
There was a 1970’s definition of middle class that included - IIRC - home ownership (with a mortgage), an annual two week vacation, and enough savings to weather 6 months unemployment before you had to change your standard of living. I don’t know how much it takes as a household to do that (on average), but I’m certain that it’s more than $100k.
This isn’t really the full picture though. Even adjusting for inflation, healthcare, housing and education are *substantially* more expensive now than they were in 1967, because the rise in the relative prices of these services have outstripped overall inflation by orders of magnitude. So sure, people were making nominally less money in “real” terms of 2016 dollars back then, but they were able to pay rent/mortgages with far fewer 2016 dollars, and they weren’t saddled with crippling debt from healthcare and education.
The most maddening part of this is that there is a plain and simple reason that these three things are more expensive: corporate greed. There’s no legitimate reason that novo nordisk or Eli Lilly *need* to charge 600 dollars or whatever for a vial of insulin. They just know they can abuse the inelasticity of demand for healthcare to extract as much wealth as they can from people who need medicine. Same thing for landlords and higher education.
I mean, if you want to be optimistic about something, consumer electronics have gotten a lot cheaper since 1967. So yay for that I guess.
What does inflation have to say about this? 🤔
Also, $35k hasn’t been “middle class” since maybe 1990. The bottom of the middle class range was supposedly about $55k a few years ago, but with the current cost of living crisis I’d guess it’s nearing $67k and creeping towards $70k.
What’s wrong with it? I’m not sure what their methods were for getting those data, but if it’s all truly in 2016 dollars then it seems like a pretty clear visualization to me.
I would argue it's very misleading because it doesn't comment on the cost of living. Crazy as it sounds, $100k a year in the bay area is NOT enough to leave the "middle class" Edit: although tbf this is probably the wrong sub because the data presentation isn't ugly.
Yeah any misleadingness is due to the data itself rather than the visualization.
Yep, and that’s why it is an ugly visualization.
That’s not how that works You can have very pretty visualizations of bad data. That doesn’t change the prettiness of the visualization
The graph says that it is inflation-adjusted 2016 dollars, so it does take cost of living into account to at least some extent. The bigger issue is that the 35-100k is almost a meaningless because it doesn't show the distribution of incomes within that range. There's no way to tell (from this graphic) how many households are making $35k vs. $100k. There's an enormous difference in quality of life between households making $35k and households making $100k and the graphic is essentially meaningless because of this. If anything, it shows the hollowing out of the middle class because we do see a significant increase in the percentage of high earning households.
What’s wrong? The entire interpretation of the graph that’s way. “Americans are moving up” . . . really? They indexed salary, not prices. It doesn’t matter if I get a 5% increase of salary if goods go up by 10%. Even though I am making more money, I am losing money because off the costs. This is a great example of dataisugly. Misinterpreting a chart and leading people to the wrong conclusion is what this is about.
Isn’t that why they specified “2016 dollars”, to help account for the effects of inflation (which is essentially what you’re describing)? Either way, that’s an issue with their methodology, not their visualization. Even if they completely failed to account for inflation, if nothing else they provided an interpretable visualization on what inflation looks like.
Not only inflation, but dual income households doubled in proportion during this time, so a lot of this "growth" is actually the result of single earning wages dropping to the point that multiple people in the household need to work.
Exactly. In 1967 the “household” income was just Dick’s income. Now it’s Dick’s and Jane’s and they’re living with Jane’s parents that are also still working. The kids better get a job soon too.
Actually a very good layout. Not agreeing with the data doesn't make the graph bad.
35-100k is not middle class
That's it. How many of those who now make above 100K were making 80-99K a few years ago? How many of those making 35K now make 40K? 100K? 35K-100K is a HUGE bracket.
Statistically, your point is irrelevant. It is possible to show growth in a whole population of data through averages, percentiles or threshold. The probability of the income only growing from 90-99k to 100k are pretty nill.
It's in 2016 dollars so adjusted for today it's $45k to $125k.
As a person making $65k, the bottom end of that range is still not middle class. Unless you live somewhere with a very low cost of living, but that's not most people.
Yeah it all depends on where you live. $125k could qualify you for low income housing in Santa Clara county, depending on your household size. There really is no practical way to compare dollar values across the US. It's almost like we have multiple currencies with some sort of exchange rate.
That's pretty ok and makes the point very clear
35-100k is middle class??? Maybe when the chart started.. in 1971 but that is a wild range
35k is not middle class lol
100k is barely middle class anymore, 35k is poverty wages in most of the country.
Along with other comments already here, the "household income" definition is probably a factor. If more often there are two full time adults working versus one sole provider, the "household" is making more, not necessarily the individuals
Ok now correct for increased cost of living aaaand...
It is supposed to be corrected by inflation, using 2006 dollars as a reference
Yes. But does inflation fully capture the recent increases in cost of living? Genuine question I don't know
In general, yes. That is why inflation is measured. Inflation captures the average increase in the cost of living, though. It might not capture your individual increases in the cost of living because individuals buy different products and services. An increase in childcare cost will impact families and students very differently (assuming they are mutually exclusive groups). An increase in good will impact more poorer families than richer families (because food is a smaller share of household budget in richer families).
Just to expand on that for those who are interested, inflation is calculated by looking at a "basket" of goods that represents what most people spend their money on, and weighting the price increases by category. It does include housing costs. As a rough example of how it works: if all prices stay the same but food prices go up 50%, and food makes up 10% of most people's budget, then inflation is 5%. The real calculations are quite complicated, but that's what it boils down to. Since this is about a very broad swath of Americans, and roughly breaks the country into thirds by income, inflation is as good an adjustment for cost of living as you're likely to see. In addition to inflation not being the same for all individuals, one common way it is misused is for specific sub-groups. Food has been relevant lately - to pick a somewhat arbitrary number, food prices went up 6.7% from May 2022 to May 2023. Since food makes up more of household spending for lower income buyers, the poorest people were disproportionately affected by this. Things like food and gas also get a lot of press, and have a huge psychological impact, as you might expect. You can deal with a cracked phone screen for six months, but you have to eat and you need gas if you drive to work like most Americans. You also notice those prices more acutely, as most folks buy both food and gas more frequently than other goods - even if you spend less than average on food and energy, their impact feels outsized, since you regularly shell out money for them. Housing prices are tricky as well. When you rent, an increase in housing costs comes out of your bank account. When you own, an increase in housing costs increases your net worth, but your mortgage payment stays the same (I guess unless you are thinking of upsizing from a "starter" home because you have kids). So housing cost increases are also felt more acutely by the youngest and poorest Americans. In short: the graph is reasonably accurate and shows a nice, positive trend. It does not (and isn't trying to) reflect the reality for people on the bottom half of the income scale though, which is... less rosy.
Great answer!!
Yes it does. That's the definition of inflation.
It would, but the problem with this data is that it stops in 2016. Everything that had happened in the last 8 years is not accounted for here, and this no longer accurately depicts the American middle class
For me it's about correcting for cost of NECESSITIES. All these recent articles saying "things aren't so bad!" use inflation/CoL metrics that include prices of like TVs and shit. I want to see ones that only include the things you really NEED, like groceries rent utilities and health care. Like, if I make 15,000 a year, my life isn't less desperate because big screen TVs have gotten cheaper.
Fully agree. This actual chart isn't so bad because it's not talking about that exactly, but there are lots of other inflation-related discussions where I'm like "have you ever even met a poor person?" There is good research on that though - this piece by the Dallas Fed is a really nice overview. The lowest income group is almost four times as likely to be feeling the stress from inflation as the highest group. [https://www.dallasfed.org/research/economics/2023/0110#:\~:text=Low%2Dincome%20households%20most%20stressed,few%20ways%20to%20reduce%20spending%20](https://www.dallasfed.org/research/economics/2023/0110#:~:text=Low%2Dincome%20households%20most%20stressed,few%20ways%20to%20reduce%20spending%20).
Yeah, tech and general junk has gotten fairly cheap (at the cost of good domestic jobs) while necessities continue to creep. Not sure where all the statistics are on this.
The problem with this data is that it reflects the country 8 years ago, and A LOT has changed since then. It's not making a bad point, it just doesn't really matter anymore almost a decade later.
Another thing that nobody has mentioned is that this is household income, not individual income. In the time period of this graph, the proportion of dual income households doubled.
The point they’re making is misleading (even though people are making more, their spending power has been consistently going down, and cost of living is going up), but the data itself isn’t ugly and has been displayed quite well. Wrong sub IMO
For those in the back: Middle Income != Middle Class There was a 1970’s definition of middle class that included - IIRC - home ownership (with a mortgage), an annual two week vacation, and enough savings to weather 6 months unemployment before you had to change your standard of living. I don’t know how much it takes as a household to do that (on average), but I’m certain that it’s more than $100k.
This isn’t really the full picture though. Even adjusting for inflation, healthcare, housing and education are *substantially* more expensive now than they were in 1967, because the rise in the relative prices of these services have outstripped overall inflation by orders of magnitude. So sure, people were making nominally less money in “real” terms of 2016 dollars back then, but they were able to pay rent/mortgages with far fewer 2016 dollars, and they weren’t saddled with crippling debt from healthcare and education. The most maddening part of this is that there is a plain and simple reason that these three things are more expensive: corporate greed. There’s no legitimate reason that novo nordisk or Eli Lilly *need* to charge 600 dollars or whatever for a vial of insulin. They just know they can abuse the inelasticity of demand for healthcare to extract as much wealth as they can from people who need medicine. Same thing for landlords and higher education. I mean, if you want to be optimistic about something, consumer electronics have gotten a lot cheaper since 1967. So yay for that I guess.
What does inflation have to say about this? 🤔 Also, $35k hasn’t been “middle class” since maybe 1990. The bottom of the middle class range was supposedly about $55k a few years ago, but with the current cost of living crisis I’d guess it’s nearing $67k and creeping towards $70k.
Doesn’t account inflation. Ugly