Source: Income, Poverty, and Health Insurance Coverage in the United States: 2010. U.S. Department of Commerce, Economics and Statistics Administration, U.S. CENSUS BUREAU, Issued September 2011 Distribution of Income by Quintile The U.S. Census Bureau publishes a vast array of statistics about the U.S. Economy. One of their publications – Income, Poverty, and Health Insurance Coverage in the United States: 2011 – is particularly relevant to the debate about policies you have talked about in your Discussion Board this week. In the charts on the next page I have pulled data from Table A3 – Selected Measures of Household Income Dispersion: 1967 to 2010 to create three charts. 1. Distribution of Household Income by Quintile, Annual, Percent, 2005 – 2010 2. Distribution of Household Income by Quintile, 5-Year Interval, Percent, 1990 – 2010 3. Distribution of Household Income by Quintile, 10-Year Interval, Percent, 1970 – 2010 If you take all of the income by households and arrange the data from those with the lowest income to the highest you can group the data into five groups. Take the lowest 20 percent of households, add the income together, and divide by the total amount of income for the nation, you will get a ratio like 0.033 for 2010. Multiply this by 100 to get a percent of the total. So, for the lowest quintile (the lowest fifth) they earn 3.3 percent of the total amount. The second quintile receives 8.5 percent, the third 14.6 percent, the fourth 23.4 percent and the highest quintile receives 50.2 percent. I want you do to answer the following questions. 1. Looking only at the first chart, make observations about the distribution of income, focusing on any changes you see in the short-run 5-year period. Maintain a positive economist stance – only focus on the data and avoid all normative statements. 2. Does your perception of the trends in the distribution of income change as you move from a 5-year annual perspective to a 5-year interval over 20 years, and then at 10-yer intervals covering a 40 years. Again, maintain a positive economist stance. 3. What do you believe will happen as we move to 2020? Back up your view with observations about current policy debates and how government actions will affect these trends. Source: Income, Poverty, and Health Insurance Coverage in the United States: 2010. U.S. Department of Commerce, Economics and Statistics Administration, U.S. CENSUS BUREAU, Issued September 2011 Distribution of Household Income by Quintile, Annual Percent, 2005 – 2010 Distribution of Household Income by Quintile, 5-Year Interval, Percent, 1990 – 2010 Distribution of Household Income by Quintile, 10-Year Interval, Percent, 1990 – 2010 0.0 10.0 20.0 30.0 40.0 50.0 60.0 Lowest Second Third Fourth Highest 2005 2006 2007 2008 2009 2010 0.0 10.0 20.0 30.0 40.0 50.0 60.0 Lowest Second Third Fourth Highest 1990 1995 2000 2005 2010 0 10 20 30 40 50 60 Lowest Second Third Fourth Highest 1970 1980 1990 2000 2010 Source: Income, Poverty, and Health Insurance Coverage in the United States: 2010. U.S. Department of Commerce, Economics and Statistics Administration, U.S. CENSUS BUREAU, Issued September 2011 Distribution of Household Income by Quintile, Annual Percent, 2005 – 2010 2005 2006 2007 2008 2009 2010 Lowest 3.4 3.4 3.4 3.4 3.4 3.3 Second 8.6 8.6 8.7 8.6 8.6 8.5 Third 14.6 14.5 14.8 14.7 14.6 14.6 Fourth 23.0 22.9 23.4 23.3 23.2 23.4 Highest 50.4 50.5 49.7 50.0 50.3 50.2 1990 1995 2000 2005 2010 Lowest 3.8 3.7 3.6 3.4 3.3 Second 9.6 9.1 8.9 8.6 8.5 Third 15.9 15.2 14.8 14.6 14.6 Fourth 24.0 23.3 23.0 23.0 23.4 Highest 46.6 48.7 49.8 50.4 50.2 1970 1980 1990 2000 2010 Lowest 4.1 4.2 3.8 3.6 3.3 Second 10.8 10.2 9.6 8.9 8.5 Third 17.4 16.8 15.9 14.8 14.6 Fourth 24.5 24.7 24.0 23.0 23.4 Highest 43.3 44.1 46.6 49.8 50.2
