Well, they are all right, except that they are using statistics to lie, probably both unintentionally, through
misunderstanding, and intentionally.
The report Tina linked to looks only at income on the plus side and adjusts effective income downward based on things
like average regional housing costs.
Yes, there are a lot of poor seniors in the US. Yes, a lot of them are very badly off. BUT, I don't think this report
provides meaningful information about the details of that situation. That's because it doesn't look at all at
assets/wealth and individual dwelling unit costs. Home ownership is a huge factor in financial well being for seniors.
Someone who has to pay rent out of SS is way worse off than someone who doesn't. Someone who owns their home also has
an asset that can be tapped for income, but which appears to be hidden/ignored in this report.
As part of the SPM adjustment, regional housing cost averages are used to adjust everyone, both those it affects,
renters, and those it doesn't.
The CPS does collect housing cost info, but the way this report is written, it sounds like that was not used, or at
least not for the SPM. It is, of course, possible that those who compiled the underlying data did it more correctly than
the summary report implies. But I can't know that.
I had no idea of the overall situation of poor seniors in the US, or of regional and local differences. And I know not
one whit more about that now than I did before reading this report.
Unlike Nathan, I didn't pursue a career in economics. I did get a BA in it at Berkeley and learned quite a lot about
what national economic statistics are and how very difficult it is both to do a decent job of compiling them and make
meaningful use of them. Later, I ran a market research operation, and was again involved with them, as well as smaller
scale data. They are extremely important information and incredibly easy to misread or intentionally use to 'prove'
things they don't in fact say.
The Guardian article Chris links to reports on cohort wealth, not individual income or assets. This is important to the
UK, but says nothing about per capita or per family income or wealth. It is completely meaningless as any sort of
comparison to the US data above.
The Telegraph article focuses on income, as opposed to wealth. Although they talk about the same overall phenomenon,
increased economic well being for seniors, the two articles choose to do so in very different ways, both incompatible
with each other and both incomplete, as one only measures assets, the other only income. One might even guess that the
Guardian's readership is weighted toward a financially better off portion of the population than that of the Telegraph?
Simple example: The Guardian says:
"the share of total wealth held in households headed by someone aged under 45 fell from 20% in the years approaching the
recession to 16% in 2010-12. By contrast the share of wealth of households headed by someone aged 65-74 has gone up and
now exceeds the under-45 age group."
Without knowing the composition of the under 45 cohort and without knowing the size of each cohort, this statement
contains no useful, concrete information whatsoever, at least to someone in the US without an understanding of standard
UK economic statistics. I know what Head of Household means in the US, but not the UK. The statistical treatment of
individuals living alone, in shared accommodations and in group quarters is crucial to these measures, and could be the
same or very different in the two countries.
If there are twice as many in the younger cohort as the older one, the older folks are actually worse off than the
younger ones, although less so now than in the recent past. Reverse that number and the picture is completely different.
The above is why regular people don't like economists and why politicians, the press and many citizens drive economists
crazy.
Dismal Science Moose
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What if the Hokey Pokey *IS* what it's all about?
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