01 November 2017

George Carlin's Driving Test Applied to Income and Politics

"Have you ever noticed that anybody driving slower than you is an idiot, and anyone going faster than you is a maniac?" - George Carlin

What he might have said about household income.

"Have you ever noticed that anybody making less than you is lazy and anyone making more than you is lucky?"

After an interesting exchange with a stranger about household income it occurred to me that this person judged people making more or less than her. She seemed really resentful of people who made more AND less than her. The ones making less were at home slacking off and pumping out babies. 

It was curious that she felt that people making less than her could have easily applied themselves - just by working hard - and increased their income but she apparently didn't think that if only she would work harder that she, too, could double her income.

Here is the thing about income distribution: 20% of your population will always be in the bottom 20% and 20% will always be in the top 20%.

This stranger said she made about $40,000. That means that she makes more than 40% of American households. Households that make under $20,000 are in the bottom 20% and households that make over $100,000 are in the top 20%. When you are talking to a random American there is a 50% chance that their household makes less than $50,000. You should be no more shocked or judgmental about discovering the person you talking with makes less than $50,000 than you are that a coin you flipped was tails. 

Or you could make it all mean something about a person's work ethic and morality.

2016 Distribution of Household Income

The aha I got from the exchange with this woman making about $40,000 is that we do have a tendency to believe that if only the people making $20,000 were to work as hard as we have, they too would make $40,000. And if only the people making $80,000 had fewer lucky breaks, they would be making no more than we are. In this worldview, incomes of the people making less than us would rise if only they worked harder and incomes of the people making more than us are so high only because they are lucky. 

History suggests that hard work doesn't change incomes as much as progress.

In 1900, people worked harder than us. The average work week was 60 hours, not the 37.5 it is today. Yet people in 1900 made an average salary of about $9,000 ($450, actually, but adjusted for inflation of things like groceries and housing), less than one-sixth of what they do today. Not only did they make less but their money could buy less. No one in 1900 was buying an airplane or movie ticket.

At any given point in history there is a distribution of income and half of the households will find themselves in the bottom half of that distribution. Maybe at some point in the future the people in the bottom 10 to 30% will be perfectly comfortable and able to afford housing and food and healthcare but that time isn't now. We can act like those people are in those bottom percentiles because they work only half as hard as people in the 40th or 50th percentiles and are meeting their just reward. Or we can acknowledge that incomes vary and some simply aren't enough. 

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