Income Inequality Is Simple to Explain

Want to understand why there are big differences in household incomes? The Census Bureau provides some easy to understand data.

	Lowest Quintile	Q2	Q3	Q4	Top Quintile
Average HH Income	$               11,034	$          28,316	$        49,309	$        79,040	$            169,633
Earners per HH	0.42	0.90	1.29	1.70	1.97
Percent Married	17%	36%	49%	64%	78%
Percent 35-64	44%	47%	55%	64%	75%
No High School Degree	27%	17%	9%	5%	2%

The four variables -- marriage, age, education attainment, earners in the household -- account for more than 90% of the variance in household income.

American households in the top income quintiles are far more likely to be married and well-educated. They are more likely to be in their peak earning years. They have far more household members earning income. These may seem like "duh" facts, but they are critically important. Most low income households are low income because of these factors.  If you're 25 or 70, you quite obviously aren't as likely to be earning as much as when you are 45. If you have a working spouse your household income will be higher. If you drop out of high school, well . . . duh.

All of this simply illustrates that it is simple choices (like finishing high school and getting married) and demographics (being in your peak earning years) that influence your household income. It is NOT some conspiracy on Wall Street or "greedy corporations" that are holding you back.

Demagogues, of course, have the opposite take. Blame others for the consequences of your choices.