There is a fundamental obstacle to most conversations about income inequality: Just about everyone likes to believe that they are average. Whether you make $32,000 or $200,000, you tend to think that you earn at or about the US’s median income.
Of course, this can’t be true —
Breaking through these misconceptions is necessary in order to start having an intelligent conversation regarding the impact that growing income inequality has on our society: how a widening wealth gap can stunt macroeconomic — and, therefore, job — growth, how changes in inequality can diminish tax bases needed to pay for municipal services, including access to public education, and how the strong correlation between inequality and decreased economic mobility has the potential to hinder future generations. Americans today are finding it harder and harder to get ahead, and we need to know where people stand on the income and wealth spectrum in order to understand why this is and what can be done about it.
Unfortunately, traditional measures of income inequality are somewhat abstruse — not many people know how to interpret a Gini coefficient of 0.477, for example. Or understand in real terms what it means that the US poverty rate has stood at about 15 percent for the last few years, meaning that 15 percent of individuals live in households with incomes below the federal poverty line. That said, we can learn a lot by dividing households into five equal-sized groups based on income (known as quintiles) and examining the characteristics of these groups, so here are some simple numbers to get you started.
Jodi Beggs is a lecturer and assistant director of research for the CREATE initiative at Northeastern University.