The Real Numbers: Half of America in Poverty -- and It's Creeping toward 75%

[karynnj]

101. Let's make this real simple - as someone already did using basic algebra

Your argument depends on average being computed as the mean. Therefore, for sake of explanation, I will use the more precise concept (the mean) to show that he is wrong.

You know that the mean of the bottom 50% is $18,000 and you know that the mean of the bottom 75% is $31,000. It is very easy to solve for the mean of the group between the 50th percentile and the 75 percentile. This is coming from the distributional information already supplied - so NOTHING is assumed. There are twice as many households in the bottom 50 % than are in the (50% to 75%) group. You know the means of the the below 50% and the below 75% groups. You then know the mean of the (50% to 75%) group can be solved for.

2/3 (mean of below 50%) + 1/3 (mean of 50% to 75%) equals the mean of below 75%. Substituting in what you know:
2/3(18,000) + 1/3 (X) = 31000.

This means X or the mean of the 50% to the 75% group is $57000.

Now, I cannot say how many of the people will be above $30,000, it is pretty clear that nowhere near 76% are near poverty.

His example is using a MORE skewed distribution than happens when you are looking at the TRUNCATED income distribution that ends at the 75%. (The distribution plot shown in this thread is NOT for just the distribution under 75%. Including the very top leads to the lack of resolution at the very part that you are speaking of because the linear scale of income puts a very high percentage of people in the 0 to 1 range. This graph is interesting to show (as if it were needed) the incredible % that the very rich have, but there are many simpler charts that would convey that better - including a very simple bar chart of the median or mean in each quantile - even then it is typical to use a broken bar for the last one rather than scale the entire chart to fit that point. It is not good if you are interested in only the lower 75% of the curve because the scale causes you to lose resolution. The fact is that someone at the mean of the 50% to 75% group is not likely to be "just above poverty".

My original post AGREED that the economic data shows a bad situation. What I did not like was that the statistics were mangled to say things that are likely not true - and THERE WAS NO NEED TO EXAGGERATE as the truth is sufficiently bad. For example, it is very possible that the truth might be that HALF of the households are at incomes where they qualify for some (or all) government assistance. This is pretty troubling - especially as many limits are not defined to be generous.