With all the talk about "equity", I thought that I would check out the numbers. I will show you what I found in the data that I analysed in this blog.
I searched the internet and found some data on income by age. The data was broken down into "Average", "Median" and the "90% group" and the "99% group" It looked just like the data I was looking for. I then calculated the ratios of different groups of data to see if I could develop my "equity index". That is the ratio between the "average" and the "median". In a prior blog, I did this for the USA, Mexico and Canada and found that the "Equity ratio" for Canada was better than the USA and Mexico's was last. If you follow the idea behind the ratio, the closer the median is to the average, the smaller the ratio and thus the better the "equity".
Here is my data for "equity" based on the ratio defined above.
Age Group Av/50% 90%/50%
20 1.19 2.43
30 1.33 2.41
40 1.30 2.56
50 1.41 2.90
60 1.43 2.82
65 1.43 2.62
Now, how about a litle analysis of the data? It is clear that the basic :Equity" gets worse as people age. Back when we were only 20 years of the ratio or "equity" was not too bad at 1.19. But as we aged and worked our way up the ladder, some started pulling away from the pack and by age 60 the "equity" ration had grown to 1.43 or 20% worse. Why do you think that was? I think it was because those who had not prepared themselves by education or personal responsibility were left behind by those who had more abilities and responsibility. What do you think?
The other thing that I did was to compare the "median" or 50% group with the top 10%. The top 10% are those who end up paying 90% of the taxes that benefit the lower earners. The data shows that the top 10% gain their advantage over the median right from the get-go with a ratio of 2.43 out of the blocks. Why is that? I think it is because of education and the fact that some people are just more skilled and since there are so few of these people, they can demand more pay. I did not look at earlier periods than 2022, but it is my guess that this ratio has gotten bigger over time and that it will continue to grow as the world's economy shifts more to technology and intellectual work. The supply of top intellect is limited so the trend will continue.
I am going to dig into more data to see if I can get more insight and understanding of trends that are happening and will continue. Further, I am going to challenge government decisions and compare their impact to the above ratios. I can already tell you that many of our governments actions are making the equity ratio worse. A good example is the open southern border. The majority of those immigrants will be below the median income and thus will have the effect of lowering it. They will also make some big companies and people richer and that will have the impact of raising the average income. It is the distance between the median and the average that is the basis of my equity ration and it is getting worse. In a future blog, I will try to show ways that we could improve the equity ratio and thus raise the quality of life for us USA citizens. What if we had some "USA First" policies for a change!!!
PS--With socialisms they can achieve true "equity" when everyone is at "zero" or broke. What I would like to see is a compromise where the "quality of life" was higher and the "equity" ratio was lower. The best statistic that I can find for "quality of life" is median income. If you punish the high earners too much will high taxes you also reduce the median income in the process. That is why it is a "compromise" and exactly where is the best "compromise"? All we can do is to honestly search for it.
