The Census recently published its most recent data about how Americans live, claiming that middle class incomes have risen approximately 5% and that poverty has seen its greatest decrease in over 50 years. This is phenomenal, but unfortunately not as accurate as the report makes it seem.
Days after the Census report was published, additional supplementary reports also needed to be publicized after it was noted that this increase was unevenly split between those living in urban and rural areas, and that in fact incomes have not risen as dramatically as proposed.
This mistake was found to be due to a change in the definition of a rural versus metropolitan areas, and has caused a discrepancy the Census has denied speaking about.
The media did not take issue with this inconsistency deeming it not statistically significant, however this lends to how the job market has been evolving over the past 50 years and the movement of the population from rural to urban cities does have an effect on ability of workers to invest.
It turns out the sharp differences in income growth, are ultimately in the people's favor, yet because inflation has not grown in proportion to the rise in incomes, this means the purchasing power of Americans has increased giving us more purchasing power internationally as well.
With greater purchasing power comes greater responsibilty as we hold a greater influence on the supply and demand of money and loanable funds internationally, effecting even the smallest economies due to their minimal economies of scale and position as price takers in the much larger global market.
Link: http://www.nytimes.com/2016/09/17/upshot/actually-income-in-rural-america-is-growing-too.html?ref=economy&_r=0
The average income in rural areas may be raising; however, it is not a good gauge for America's economic standing. An important factor to note would be that many Americans cannot afford to live in cities anymore. Many are moving to rural areas, or commuting from suburban ones.
ReplyDelete