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What Is In Your Wallet? Here Is What The Government Says May 2, 2007

Posted by Daniel Downs in economics, family, finance, government, Income, news.

According to the Bureau of Economic Analysis (BEA), the most recent figures of per capita personal income (personal income divided by population) ranged from $93,377 in New York County, New York to $5,148 in St. Bernard Parish, Louisiana. The national average is $34,471.

Why the extreme disparity of average incomes? In Louisiana, the declines were the result of Katrina. Do not let that fool you. Louisiana’s per capita personal income PCPI has always been below the nation average. In the previous year, Louisiana’s PCPI was $27,088 compared to a national average of $33,090.

You might have guessed the reason for New York County having the highest PCPI in the nation. New York County is where the headquarters of the United Nations, Wall Street, International banking, the international concerns of most religions, most major news media, the publishing industry, fine arts, and many multinational corporations. Maybe that is why Bill and Hilary Clinton live there among the rest of the world’s globalists.

The PCPI of New York County was 234 percent higher than the whole state of New York, and 271 percent higher than the rest of the nation.

If you are among the average Joes or Janes in America, you might be able to identify with the above national average ($34,471), but I doubt it. Why? Because of what is in your wallet is not what the BEA means by personal income. Consider their definition:

Personal income is the income received by all persons from all sources. Personal income is the sum of net earnings by place of residence, rental income of persons, personal dividend income, personal interest income, and personal current transfer receipts. Net earnings is [personal income] less contributions for government social insurance.… Personal income is measured before the deduction of personal income taxes and other personal taxes and is reported in current dollars.

First, when referring to money in the wallet, most of us think of after taxes net earnings. Second, most of are not capable of imagining very many 3 year old children having $34, 471 in their piggy banks, nor for that matter any child or youth. The BEA, however, employs some very imaginative people.

If we look at the American Community Survey data for the same year (2005), the average per capita income (ACPI) in New York County was $54,633 adjusted for inflation. Those conducting this survey were less imaginative. Nevertheless, the APCI still does not tell us much about what is really in the wallets of people living in New York County.

We get a better idea by using household income. Household income covers singles, non-married, and family households. Median household income in New York County was $ 55,973. Now, we have a middle point by which to judge how many households earn a below average income. The approximate number of households with below median income is 311,403, or 43% of all households. When we compare this figure to average household expenditures, which was around $54,121, to the median income and number households (or between 622,000 to 680,000 people), we see a lot of people living below the middle-income ideal.

Assuming poverty actually begins at or below around $33,000 in income (or $25,000 for expenditures), New York County has nearly 260,000 households (or about 500,000 people) living in poverty. That is still a whole lot of people without enough money in their wallets.

How terrible it must be for those living in St. Bernard Parish, Louisiana, even if its population is only one—Salute!

Actually, it is over 25,000 since Katrina, and median household income before Katrina was $35,939.

If you are curious about what the imaginative people at the Bureau of Economic Analysis have to says about your area visit The Bear Facts.

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