I added up the elements of that graph that seemed essential, I even left out ones that might be skewed (transportation, clothing, etc) because it's possible to spend money there in excessive ways - for the bottom 20% it was $11,033, which is still higher than the income base. That was only including food, housing, healthcare, and taxes.
I don't think the bottom fifth of Americans is buying foie gras and living in huge houses. Try McDonalds and subsidized housing. That doesn't even include things we would consider essentials to being a productive member of society - transportation, a phone, electricity, etc.
I think the savings rate of the bottom 5th probably hasn't changed much in 50 years. It's the savings rate of the 2nd and 3rd 5ths that has become completely skewed by loose credit and profligate spending (again, I wish I had the data to back up this thesis)
Huh. When I was in the bottom 20%, I moved to a really terrible neighborhood and ate mostly rice and oatmeal. In my terrible neighborhood, I saw lots of people who wore much nicer clothes than me, but who, uh, didn't seem to have jobs. Lots of them had iPods -- some of them also had sound systems which they used well after midnight, perhaps in order to broadcast some sort of distress signal audible at the New York Times headquarters. I have a better job now; the average income, poverty rate, unemployment rate, incarceration rate, etc., of the neighborhood I left does not appear to have improved. I did not find it very hard to live on $700 a month when that's what I had to live on. And that was in one of the more expensive cities in the world. I think they can do better, and I do think it's their fault that they don't.
I don't think the bottom fifth of Americans is buying foie gras and living in huge houses. Try McDonalds and subsidized housing. That doesn't even include things we would consider essentials to being a productive member of society - transportation, a phone, electricity, etc.
I think the savings rate of the bottom 5th probably hasn't changed much in 50 years. It's the savings rate of the 2nd and 3rd 5ths that has become completely skewed by loose credit and profligate spending (again, I wish I had the data to back up this thesis)