But this line is just phenomenal
As Stephen J. Rose points out in his book “Rebound: Why America Will Emerge Stronger From the Financial Crisis,” when income is adjusted for family size, the percentage of prime-age American adults earning between $35,000 and $70,000 declined by 12 points between 1979 and 2007. But that’s largely because the percentage earning more than $105,000 increased by 14 points. Over the last 10 years, 60 percent of Americans made more than $100,000 in at least one of those years, and 40 percent had incomes that high for at least three.The great thing about this quote is that there is almost no way that this is true. And maybe the blame is to be placed on Rose. Or maybe Brooks screwed up in interpreting Rose's statistics. But surely there must be an editor at the Times that would have thought.....hmmm this certainly doesn't sound remotely plausible (of course, maybe none of the editors at the Times move in circles in which the absurdity of this claim would be plausible. They might, after all, be thinking "well $100,000 ain't that great").
And of course, it is not plausible. It is conceivable in the most literal sense of the word, but in order for it to be the case there would have to be an enormous amount of mobility across income levels over these ten years. Cause the average per year is pretty stable at around 20%. So unless 40% of Americans are just hanging out under the threshold, and there is exceptionally high turnover between them and the Americans above $100,000, then there is almost no way that this can be true. And given that this sort of mobility is not actually the pattern, it is even less plausible.
A much better discussion is available over at Dean Baker's blog, who also points that the only way this could be true is if (1) we're talking about households rather than "sixty percent of Americans", and (cause this alone doesn't get you anywhere near there) (2) there is a remarkable and unrealistic amount of income variation. More importantly, he also notes (3) that by the logic required for this to make any sense (households and unrealistic variance assumptions), the situation is pretty bad for the bottom levels of income distribution.
But, let's take the flip side. There were roughly 29 million households that had incomes of less than $25,000 in 2008. If we assume 1.2 adults in these households on average, then there were roughly the same number of adults living in households with incomes under $25,000 as there were living in households with incomes above $100,000. Now, if we assume the same mobility around the bottom as around the top, then 60 percent of adults lived in a household that made less than $25,000 in at least 1 or 2 of the last ten years. And 40 percent of adults had incomes this low for at least 4 of the last ten years.
