A different take on an Economic Disparity study

“I am so close to breaking in into the top 5% of incomes in Oregon.” That was my initial reaction to reading the most recent study by the Economic Policy Institute which measured income disparity by state. The main points of interest were compiled by CNN into a table showing the state by state breakout of the disparity between the top 5% and bottom 20% of family incomes. My reaction of course misses the thrust of the story completely.

Their point, and it appears to be a valid and disturbing one, is that the income gap between the wealthiest and poorest of families is wide and growing wider. In Oregon, it is 10-to-1. The top 5% earns $154,000 on average, while the bottom 20% earns a tiny $17,000. Also, the gaps measured are growing year over year, as the incomes at the top accelerate, and those at the bottom move up only slowly or not at all.

You can go to other blogs for commentary about why this is a bad thing. Of course it is. This blog tries to take a fearless and positive approach. So, my observation is that $154,000 is really not much money at all to put a family in the top 5%. That’s actually a heartening observation, I think. In my best year, I earned almost that much money. If those families’ incomes are “breaking out”, acceleraing into the stratosphere, I want to be there with them!

Seriously, and somewhat more humbly, I think the numbers are interesting because I’ve always felt that I wasn’t really doing that well. This study convinces me that objectively, I was/am doing quite well. If I am not in the top 5%, I am certainly in the top 20% of incomes. Yet, I saw other people doing so well, so much better than me, that I found myself wondering why I couldn’t be so successful.

In fact, I was doing about the same as most of the people I envied, and better than the majority of people in my city. How people in my income bracket can afford to have huge boats and cabins continues to be a mystery to me. I suspect the truth is that they actually can’t afford those things. For years, I fell into the classic “keeping up with the Joneses” trap. I spent myself and my family into the ground trying to keep up with a myth. Part of the reason I stayed in that trap was that I feared to take an honest look at my finances.

Last year I finally dumped my fear and embraced my finances. Things are getting much better for my family, and with continued focused attention, I am confident I’ll be breaking into that top 5% in the next year or two.

Thanks Consumerism Commentary for the link.

Technorati Tags: income, economic policy institute

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