Older and Wiser - Take Two

The Pew Research Center released another study that indicates a gap between the older and the younger...this time in favor of the older.

Households headed by older adults have made dramatic gains relative to those headed by younger adults in their economic well-being over the past quarter of a century, according to a new Pew Research Center analysis of a wide array of government data.

In 2009, households headed by adults ages 65 and older possessed 42% more median net worth (assets minus debt) than households headed by their same-aged counterparts had in 1984. During this same period, the wealth of households headed by younger adults moved in the opposite direction. In 2009, households headed by adults younger than 35 had 68% less wealth than households of their same-aged counterparts had in 1984.

As a result of these divergent trends, in 2009 the typical household headed by someone in the older age group had 47 times as much net wealth as the typical household headed by someone in the younger age group–$170,494 versus $3,662 (all figures expressed in 2010 dollars). Back in 1984, this had been a less lopsided ten-to-one ratio. In absolute terms, the oldest households in 1984 had median net wealth $108,936 higher than that of the youngest households. In 2009, the gap had widened to $166,832.

The entire report can be accessed here.

Older and Wiser

According to a recent report by the Pew Trust indicates that being older and wiser isn't always better...at least not when it comes to long term unemployment.

The Pew report found that although long-term unemployment does occur among all ages, those 55 and older are more likely to be out of work longer than younger works. 43% of those 55 and older who are unemployed remain so for more than a year.

While higher educated workers are less likely to lose their jobs to begin with, once unemployed there is no difference in the average length of unemployment among different education levels.

To read more about the Pew Trust analysis of unemployment, click here.

The Necessity of the Economic Census

When most people think of the U.S. Census Bureau, they think of the decennial census of population. It would be hard to find an average person that would think of the economic census when considering the U.S. Census Bureau, yet it provide essential details on every aspect of the economy of the United States.

The economic census, conducted in every year ending in 2 and 7, provides details on manufacturing, sales, industry, housing, updated population data, and other important inputs to the creation of the Gross Domestic Product (GDP) figures. The corresponding census of governments also provides data for GDP. Both of these census' are slated for significant cuts or cancellations in the House of Representatives 2012 appropriations bill.

Examples of data that would not be collected include statistics on establishment and employment of business across all industries, fees paid for real estate purchases, mining tonnage by geographic area, and cost of transportation by mode. All of these are statistics that businesses rely on to make informed market decisions. There is no other organization equipped to provide this amount of statistics detail spanning all sectors of the economy.

We are at a period in time when up to date information about the economy is key to government intervention and market practices. Neither the private sector nor the government will have the necessary data to respond to current economic problems if the census is cut.

Many groups are amazed that this is even in question at this time including the National Associate of Business Economists'. The head of the NABE's statistics committee, Maurine Haver, commented to the Huffington Post "It leaves me rather speechless, actually. I just don't understand it." Former Census Bureau leaders issued a joint letter to Congress explaining that "...going without a 2012 Economic Census in the midst of the worst recession in half a century is akin to turning off the country's economic GPS at the very moment it is critically needed."

Congress was careful not to change the budget much for the Economic and Statistics Administration which is responsible for the GDP data. However, they fail to recognized that most of the input data still comes from Census. Haver was quick to point out that "the basic data that go into the national accounts are born at the Census Bureau."

The Census Bureau has come under fire in recent years for the type of data it collects during the decennial census and in the American Community Survey, particularly from the far right. Cutting the economic census is not an appropriate response. A census that gathers valuable information for businesses and lawmakers in an unstable economy should be considered a priority by anyone who wants facts to drive their decision making process.

Given the time needed to benchmark data after a lapse in collection, the next useful economic data would be released in 2022....15 years after the 2007 Economic Census. We simple can not afford to miss that much of what is going on in the United States economy.

Policies regarding housing "bail outs" are always controversial among economists (well, any policy is controversial among economists!). Coming at the policies from the national level often only gives the big picture such as how the policy will affect the national budget/debt levels or aggregated income levels. Sometimes we forget to look at the view in our own neighborhood. How exactly does this policy affect us or our neighbors?

This week in the Orlando Sentinel a neighborhood level view of the most recent housing interest rate change plan  was discussed. The article presents how this project would help specific families, particularly families who are trying to stay current on their mortgage payments. Check out the article here.

Helping families that are locked in at a higher interest rate, yet are trying to stay current on their obligations may not make a huge big picture impact, but it might be just what our neighborhoods need.

What do you think? Leave us a comment below.

Dave Ramsey's Letter to Occupy Wall Street crowd

Here at Bennett Research Services we are huge fans of Dave Ramsey. We highly recommend his books and courses! This week he took on the Occupy Wall Street group, questioned some of their demands, and made useful suggestions to those people that actually want to change something. The article is a must read. You can find it here: Dear Occupy Wall Street.

I have copied my favorite section below:

“Wealth Redistribution Is the Answer!”
I’ve heard a lot about wealth redistribution over the past few years, and I’m sure you’ve heard it too. Call it whatever you want, but this is how it usually sounds to most Americans: “We are the 99% of Americans who don’t have as much as the 1%, so we’re mad and think the government should take their wealth and property away so that I can have a piece of it. Wealth inequality is a moral breakdown! We should all spread the money around so everyone gets a fair share!”

I have my toughest critique for those who believe this: You are a thief. When someone takes my money and gives me no say in the matter, that’s called theft—whether they’re using a gun or the government. At the core of this demand is envy. And that’s not the same as jealousy. Jealousy just says, “I want what you have.” Envy is a different beast. Envy says, “I don’t think I can ever have what you have, so you shouldn’t have it either.” Decades of horrible economic teaching and the politics of envy have kept this monster alive and growing and moving forward.

This way of thinking makes you assume that all rich people are evil and have scammed their way into wealth. That may be true in the tale of Robin Hood, but I choose to live in the real world. Sure, there are some scoundrels, but the vast majority of successful men and women got that way by working hard and serving people—lots of people. Steve Jobs and Bill Gates changed the world in ways we’re just now starting to realize. Their positive impact on the world has helped all of us live better lives, and they made fortunes for themselves by doing so. Why is it that you’re holy if you help one person but evil if you help a million? That’s just stupid.

A good friend of mine is a country music legend. He’s made a bazillion dollars over his career, and he just bought a $400,000 car. He’s worked like a crazy person his whole life, spending decades in tour buses, writing songs in the middle of the night, and entertaining enormous crowds of cheering fans. He paid a price to get there, and I’m happy for his success. Would it be right for me to walk into his house and demand my “fair share” of his wealth? Heck no! I’m a terrible singer! I didn’t do one thing to contribute to his success, so why would I be entitled to a share of his wealth? He’s given me years of entertainment through his music. That’s my fair share of his hard work.

My problems aren’t his fault. And my problems aren’t McDonald’s fault or Home Depot’s fault or Walmart’s fault, either. My problems are my fault! And the more people these companies serve, the more money they make—and that’s none of my business! If you don’t like McDonald’s, then here’s an idea: Don’t eat there. But don’t walk into the restaurant and demand a portion of their proceeds for the day.

When you scream, “I’m in the 99%!” you just look like a whiner. Those of us willing to pay the price to win look at you and shrug. Heck, when it comes to the music business, I’m in the 99% myself! But that doesn’t mean I have to tear Toby Keith, Brad Paisley or even Kanye down. Oh, and a special note just for Kanye: Capitalism has been pretty good to you. I celebrate your success, but you look a little hypocritical protesting capitalism while wearing a $50,000 watch.

Statistical Abstract

The Census Bureau released the 2012 Statistical Abstract this month. It is considered to be the "authoritative and comprehensive summary of statistics on the social, political, and economic organization of the United States". The New York Times recently found some interesting data in the Abstract, although the article points out there is no context for the data.

Twice as many Americans play computer games as do crossword puzzles. More go bird watching than attend classical music concerts. Iowa has six times as many hogs as people. A record 26.6 million households do not use land lines but rely only on cellphones.

And if you were wondering about the health of Americans you can find that too...

Whether Americans are healthier is hard to tell. Farmers produced fewer potatoes and less spinach but more watermelons. People drank more tea and less coffee and ate more yogurt and less high-fructose corn syrup. Half the population said they had not dined out during the previous year. Smokers among 18- to 24-year-old men rose to 28 percent from 23.6 percent between 2008 and 2009 alone. The abortion rate per 1,000 women declined since 2000, while the rates of suicide and bankruptcies rose.

While there are lots of data in the 1400 page print edition and it is used by academics and journalist all over the country, the Abstract is on the budget chopping block for the next fiscal year. As more and more federal data series are published on the Internet, the government sees less need for a consolidated source.

Friday Fun: Mocking Visualization

Just for fun because it is Friday...here is an amusing picture of types of infographics most often used around the web...that explain almost nothing. Enjoy!

(source, via)