How the Rich and Poor Spend Money Today—and 30 Years Ago

[n2doc]

Since 1984, education spending has nearly doubled as a share of a richer family's budget. And rent has nearly doubled as a share of a poorer family's spending.

Every year, the Bureau of Labor Statistics tells us what the typical American spends on everything from his rent to his reading material. There's just one problem. In a country with growing income inequality, the typical American leaves out a lot of Americans.

For example, the poorest quintile of Americans spends about $22,000 each year. The richest spends about $100,000 each year. (The richest 1 percent spends hundreds of thousands of dollars each year.) So to understand how Americans really spend our money, it helps to break us down into groups. And, since the BLS has been producing this spending survey for nearly 30 years, it's even more helpful to track those groups over time to see how the American budget is changing.

So let's do that. If you want to play along: 1984 survey is here and 2012 survey (the latest available) is here.

The biggest difference between the lowest- and highest-earning Americans is what they spend on housing. Less than 40 percent of the bottom quintile owns a home, compared with 90 percent of Americans at the top. As a result, the top quintile outspends the bottom on housing by $21,000 a year (remember: that gap alone is basically the entire budget of a lower-income family) and $13,000 more on transportation. At just about every income level, we spend about half our income on living and getting around.

more





http://www.theatlantic.com/business/archive/2014/04/how-the-rich-and-poor-spend-money-today-and-30-years-ago/360103/

[frazzled]

1. But note expenditures on reading down in both quintiles ...

and the decrease in spending on reading is the biggest decrease, by far, for both groups.

Hey, there IS something that binds together the rich and the poor--we all read less!

[Warpy]

2. Libraries for the poor and computerized gadgets for the rich

have deeply cut into hard copy book sales and both are considerably cheaper. In addition, the second hand books sold at thrift shops to poor folks don't register as book sales.

[frazzled]

3. Believe it or not, we had libraries in the 80s

As well as second-hand bookshops.

Computerized gadgets shouldn't cut that deeply into the reading expenditures of the rich: although e-books are somewhat less expensive, books were far less expensive, with respect to income, in 1984 as well. And to be well read, a person with the means should be subscribing to several online newspapers, magazines, or journals.

[exboyfil]

4. It is just a perception thing but

paperback books seem so much more expensive than they once were. I think I am keeping the reading statistic up some. My house is literally full of books, and I have probably given away as many as I currently have over the years. I enjoy the convenience of my Kindle, but I don't purchase a lot of books for it (it usually turns out a used book is cheaper).

[frazzled]

5. I found some old paperbacks from the 60s I had ...

that were marked 95 cents on the cover. And I mean original publisher's price, not used.

I just went over to the bookshelf and picked out an old paperback at random—a copy of Alain Robbe-Grillet's novel Project for a Revolution in New York—a Grove Press edition from 1972—that is marked $1.65.

I honestly don't read any books on my iPad. I have to spend all day on a computer doing (reading) work. Last thing I want to do at night is read from a screen. Also, not everything one wants to read is available in ebook form.

[Warpy]

6. I guess I'm with the means

However, newspapers are largely useless. I follow the links at Newseum and read as much of the foreign press as time and linguistic ability will allow.

This town is odd in that it still has indy bookstores all over the place, both new and second hand. I've been through periods of real poverty and would splurge when the library came up dry on something or other.

While computers are crowding out the hard copy books in the public library (I chose this house because it's a block away), periodicals can still be found and instead of subscribing, I've gone there to read them during poverty periods, springing for a copy of the Harper's crossword on the Xerox machine.

ETA: I got a Kindle in order to put the weaving trade mags on it and have been surprised that it's comfortable to read even with my crappy eyesight.

[surrealAmerican]

7. That shows the effects of the Internet.

We may not actually be reading less: we're just paying for it less. Far fewer people today, from every demographic, subscribe to a printed newspaper.

[frazzled]

8. Ehhh ...

Not everything that is free on the Internet is worth reading, and a lot of stuff that is worth reading on the Internet is not free.

[surrealAmerican]

9. Can't argue with that...

... but it's also markedly decreased things like the number of reference books people own. When's the last time you or someone you know bought an atlas or an encyclopedia? These were once commonplace, even in poor people's houses.

A lot of books that cost money also aren't worth reading, and there are enough free ebooks that are worth reading to keep a person busy for years.

Cost is not a great determinant of quality.