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STA261
Ms. Hudiburgh
October 30 2014

Statistics Article Review

Robert Oaks feature article Graphing American Wage Statistics is not a

Pretty Picture, discusses the recent trend in average and median wages in the
United States. This observational study contains data that was retrieved from the
social security administration and the population being generalized is the
citizens of the United States. The article consists of scatter plots, bar graphs and
line graphs in an attempt to portray the data in the most effective manner.

The use of mean and median for annual wages highlights the purpose

behind the authors argument, which is the increasing disparity between income
brackets in America. The primary objective of the statistics is to inform the
reader about the recent trend of income distribution. There were no statistical
methods used in the survey process per say, but the data included represents the
population and the averages mentioned.

The title of the article reflected exactly what the reader was going to see

in the rest of the article. The inclusion of words like graphing and statistics
represented the article well and also gave the audience a preview of what to
expect. The sentence I would change would be, While the ratio of median wage
to average wage improved, the 110 super rich are now earning 2595 times more
than average workers. I would change this sentence because the terms used are
both very generalized and lack meaning to the average person. In order to make

this sentence more effective I would have defined super rich and average
worker prior to including this sentence, simply because it is found in the
opening paragraph.

The graphs were generally effective and useful in the context of reading

the article; they assisted in helping to understand the information being

explained. The variety of figures included was also helpful because this allowed
the author to display an assortment of data. A possible figure to include would be
the age distribution in relation to the income brackets because this would show
if there were a distinct difference in income based on age (or experience in the
field). The author had a clear agenda when writing the article and this was
evident in the writing. I think the statistics themselves were not misleading
however there was a tone of persuasion included in the article. Statistics about
income tax paid were not including intentionally because this would have
displayed the disparity between income brackets and how much income tax was
being paid. I think if this were included, the article would seem less biased.

Bibliography

Oak, Robert. "Graphing American Wage Statistics Is Not a Pretty Pictur." The
Economic Populist 27 Oct. 2014. Web. 28 Oct. 2014.
<http://www.economicpopulist.org/content/graphing-american-wage-statisticsnot-pretty-picture-5594>.

Article

Graphing American Wage Statistics Is Not a

Pretty Picture
Submitted by Robert Oak on October 27, 2014 - 10:21pm
The rich get richer and income inequality in America continues to grow in 2013. The wage
situation improved from 2012, but it's still pretty bad. The median wage was $28,031.02 in 2013
a paltry 1.9% increase from 2012. While the ratio of median wage to average wage improved, the
110 super rich are now earning 2595 times more than average workers.
The social security administration keeps statistics on average and median wages as reported on
Federal income taxes and contributions to deferred compensation plans. They use income tax data
to calculate your social security benefits. Below is a chart of the average wage and median wage
from 1990 to 2013.

The average wage has increased 113.4% since 1990, yet the median wage has only increased
93.3%. The reason the average wage has increased more than the median is the super rich bias the

average higher. Average wages are calculated by taking the total compensation in America and
dividing by the number of wage earners, whereas median means 50% of all wage earners earned
that amount or less.
Most of America is still working for very little, illustrated by the below graph of wage earners by
income bracket. A shocking percentage of wage earners, 14.8%, make less than $5,000 per
year. Almost a quarter, 23.8%, of all wage earners make less than $10,000 per year and almost
a third, 31.7%, of American wage earners make under $15,000.

The average wage within these income brackets is also telling of the real American wage
slave. For those making less than $5,000 a year, the average wage is $2,041.13. For those
making between $5 thousand and $10,000 the average wage is $7,407.88. That's 13.9 million
people earning between $5,000 and less than $10,000 a year, right here in America. An
astronomical 23.1 million wage earners made less than $5,000 per year in 2013. Overall, there
were 155.8 million earning wages in 2013.

We have to wonder why the news is full of the few billionaires and their lives. Most of America
has nothing to do with those very few at the top of the money heap. Those earning less than a
million dollars a year is 99.9% of all wage earners. Most Americans, 52.4%, make less than
$30,000 a year yet those very Americans have only have 15.3% of the total income from wages.
Below is a distribution graph, per compensation bracket, of the percentage of wage earners in that
bracket (blue), vs. what the percentage of total compensation is for just that wage bracket (red).
The chart shows, per wage bracket, how many people are in that wage range and what percentage
of the total compensation pie they receive. We see a few people in the $250 thousand or more
income categories getting way more than their fair share of the total net compensation income
pie. If there was more income equality in the United States we would see the blue bars matching
the red ones. Notice how the blue bars, representing workers, disappear long before the red bar,
representing income does. This means the very few at the top are getting way too big of a lion's
share.

To put this in perspective, the top wage bracket is over $50 million and over and 110 people are in
it. This miniscule percentage of total wage earners, 0.000064%, received 0,18% of the total net
compensation earned in 2013. That means as a group, these $50+ millionaires have 2595 times
more money distributed to them as a population size than those earning the average wage of
$43,041.39. Those making less than $5000 a year are only getting 0.7% of the total compensation
pie, as a group This is income inequality in stark colors and once again the rich get richer still.

The super rich have historically been grabbing much more of the income pie and as a result they
are biasing the average wage upward. For 2013 the average wage grew by 1.3%, whereas the
median wage had a bounce back and increased by 1.9%. Below is a graph showing the ratio of the
median wage to the average wage. In a space of two decades we see a significant downward slide
in this ratio which shows income inequality increasing. In 1991 the median wage was 72.05% of
the average wage. By 2013 that percentage had slide to 65.13%.

When one takes inflation into account we have another bleak story. Overall wages are barely
keeping up with rising prices. The below graph shows the average and median wage adjusted for
inflation. Since 1990 real average wages have increased 19.7% and the median wage has
increased 8.4%. Yet this is recent with both the median and average real wage below their 2007
values. While wages are finally keeping up with overall inflation, it's barely and real wages have
also not recovered from the great recession.

The bottom line here is the rich are getting richer and most of America continues to get squeezed
even though in 2013 wages improved. As a trend we can see since 1990 just a never ending attack
on regular wage earners in this country. The bounce back in 2013 isn't enough to make up for 30
years of a spiral down.

The Social Security Administration defines net compensation here and it does include anything
subject to taxes as reported on a W-2 by employers. We like to use these statistics for they come
directly from tax records and thus are probably much more accurate than other estimates.
This article is an update on 2012 wage statistics and this one, 2011 wages in America. For more
details of past 2010 wage data see our popular post, wages in America, most of us are have
notsand article Wage statistics pain a bleak picture.