Money does matter

I don’t think poor people shouldn’t have kids, but I talk about a high household income earned mostly by Dad because money does matter in a world where people are always running away from their duties and obligations to people outside their immediate nuclear family.  Obviously yes, even in America you can totally raise six kids to adulthood on 20 thousand bucks a year.  But the big conservative lie around this is that it’s a middle class upbringing.

Further, refusal to accept that individualistic, disconnected society really does have high financial costs attached keeps a lot of families dancing without a net over a ravine.

Take the often promoted “telecommute in the boonies!” plan.  Well, where’s the internet to do that?  In most of rural America outside of city limits, high-speed, telecommuting-friendly internet is several hundred dollars a month, not fifty.  In practice, people “telecommuting” this way are either defining “suburb with large backyards” as “rural” or they are commuting the old fashioned way.

And if you live rurally, it is easier to let the kids scamper around while mom stays home with no other adults nearby doing stuff around the house.  But eventually the kids need to go places, and now mom is on the commute-train too.  Even the very rural homeschool types can’t actually sit at home all day every day and never leave until the youngest of nine is 18.

Having no money, and no ability to earn a large income leave the entire household vulnerable all the time.  Dad’s car breaks.  It’s a fix requiring shop access (car lift).  Those kinds of homes exist in rural areas, but they’re not the cheap ones you could afford because “how dare you suggest we not have mom stay home when dad’s earning capacity maxes out at 40k a year!”  A lot of people get forced into really tough positions a lot faster.  It can get really ugly really unexpectedly.

Like romanticizing herb lore because you can’t afford doctor visits for chronic ailments.  Or buying the kids off with cheap filling food because you aren’t really rural, but exurban and there’s nowhere safe for them to play (busy streets, no way to walk to the nearest open play area, and you’re a one-car household).

Money would matter less if everyone was aggressive about using the interwebs to maintain clannish-style community ties to keep people matched up if they were far-flung.  Or if living twenty to a 2000 square foot house was normal mode in America right now.

In America 75+ years ago, homes used to be built with very small sleeping areas and larger shared spaces.  Shirley Jackson’s family moved into a home not much bigger than the 2500 square feet places of now, but it was split into four completely separate apartments, with very tiny sleeping areas, almost no built-in closet space and bigger social and cooking areas.  But large homes aren’t built or even modified this way anymore.

Money also wouldn’t matter if people accepted that leaving everything in the hands of one woman on the baby having and raising front will lead to fewer children if she’s really struggling and even if she personally isn’t because it always has and it’s even more the case with reliable contraception and sterilization and delaying marriage for those who take the other two options off the table.

This one’s pretty open for discussion.

Wage Compression is Real, Household Income Edition

For 2020 (2019 earnings), rounded to the nearest thousand. And these are household incomes, not individual earnings or family incomes, so this includes all your single-os living by themselves or unrelated folks living with a bunch of roommates (a remarkably tiny % for the amount of press and attention it gets, but people would wonder so I thought I’d mention it).

Top 1% starts right at 531k.

Top 2% starts at 387k.

Top 3% starts at 329k.

Top 4% starts at 296k.

Top 5% starts at 270k.

I’ll just drop some knowledge here: most of the over 6 million households in the top 5% do NOT have doctors or lawyers or MBAs in them. In fact, the percentage you’re guessing is probably the percentage that are from a tech background. It’s diverse career-wise in this rare air, but the spin is that more education yields more bucks.  This is where it breaks down. Tech breaks things, especially returns to education.  This has been true for closing in on 30 years.

You can also see the drop-off happens pretty rapidly.  Each percentage point represents a bit more than 1 million households (about 1.25 million, give or take). But wait, it gets worse!

Top 6-10% starts at 201k (top 10%) and ends at 251k (top 6%). We’ve gone from a single percentage point drop representing tens of thousands less income to each percent representing a roughly 10k drop.

So anyway household income of 200k lands you right at the edge of the top 10% of households in 2020.  And we’re still raining married tech papas all over the place. And here’s where I drop some more knowledge: high earning men aren’t marrying high earning women for the most part.  What happens in DC pretty much has stayed there, and that’s a few thousand couples.  We’re also bringing in more administrative jobs. The tales of 200-300k superintendents obscure that those levels of earning are just a handful of administrative jobs.

Anyway this is the top 10%. Let’s look at the bottom of the top 25%.

Top 10-25% starts at 124k (top 25%) and ends at 201k. This is where a lot of what normal people would call “middle class” is. This is two pretty good jobs, one very good job and one part-time or low-paying one, or one very good job, etc. The top 25% of households is about 31-32 million strong in 2020, somewhere around there. There’s plenty more in the second quartile, but at the same time the bottom of the top quartile (75th to 94th percentiles) has a wage range spanning barely 100k. From 124k to 251k covers MOST of America’s highest earning households, nearly 26 million of them. This is just a few thousand dollars’ difference in each percentile.

And then we come to the second highest quartile.
Top 25-50% starts at around 68k (50th percentile) and ends at 124k. In 2020, this quartile, which ends at the median household income, doesn’t even span 60k across two dozen percentiles! 31-32 million households with just a couple thousand separating any given percentile. This is what wage compression looks like. When you consider the sheer amount of education demanded but incomes remain cramped in such a narrow little range, it’s appalling.

What this does is leaves people in a position where they can’t easily just ask for more money or fewer hours. That’s why wage compression is a problem.

And while 68k is still the median household income, we’re a year or so away, if that, from it not being as high as the 25th percentile for married parent households. We’re very close to 75k being the top of the BOTTOM quartile among the very group producing the overwhelming majority of the children.

numbers from