As a Share of Income, Americans Have the Most Affordable Food in World & It's Never Been Better
Inspired by an item in today's "The Gartman Letter," the chart below displays data from the USDA comparing household spending on food as a share of final consumption expenditures for 84 countries around the world. Dennis Gartman comments:
"Everyone knows that the price of food is rising fast, and nearly as many know that the price of rising food falls most harshly upon the poor. It is the poor in any country that have to use the greatest percentage of their disposable income to buy this most basic of all requirements for life. Full bellies, as they say, tend not to make revolutions and once this percentage gets upward of 35% bellies are less and less full and regime change more and more likely."
| Share of Household Spending on Food, 2008 | % |
|---|---|
| United States | 6.9 |
| Ireland | 7.2 |
| Singapore | 8.0 |
| United Arab Emirates | 8.7 |
| United Kingdom | 8.8 |
| Canada | 9.1 |
| Switzerland | 10.2 |
| Australia | 10.5 |
| Austria | 11.1 |
| Germany | 11.4 |
| Sweden | 11.5 |
| Denmark | 11.5 |
| Netherlands | 11.5 |
| Finland | 11.9 |
| New Zealand | 12.1 |
| Hong Kong, China | 12.2 |
| Qatar | 12.7 |
| Norway | 12.9 |
| Belgium | 13.0 |
| Spain | 13.2 |
| France | 13.5 |
| Greece | 14.0 |
| Malaysia | 14.0 |
| Japan | 14.2 |
| Italy | 14.2 |
| Kuwait | 14.5 |
| Bahrain | 14.5 |
| Estonia | 14.6 |
| Slovenia | 15.0 |
| South Korea | 15.1 |
| Portugal | 15.6 |
| Czech Republic | 15.6 |
| Hungary | 16.3 |
| Slovakia | 16.6 |
| Israel | 17.7 |
| Bulgaria | 18.2 |
| Uruguay | 18.5 |
| Ecuador | 19.0 |
| Latvia | 19.0 |
| South Africa | 19.8 |
| Argentina | 20.3 |
| Poland | 20.3 |
| Lithuania | 21.8 |
| Chile | 23.3 |
| Saudi Arabia | 23.7 |
| Mexico | 24.0 |
| Taiwan | 24.0 |
| Turkey | 24.4 |
| Brazil | 24.7 |
| Thailand | 24.8 |
| Costa Rica | 25.7 |
| Croatia | 25.8 |
| Iran | 25.9 |
| Turkmenistan | 27.1 |
| Colombia | 27.6 |
| Russia | 28.0 |
| Bolivia | 28.2 |
| Peru | 29.0 |
| Venezuela | 29.1 |
| Dominican Republic | 29.2 |
| Bosnia-Herzegovina | 31.1 |
| Macedonia | 31.5 |
| China | 32.9 |
| Romania | 34.3 |
| Kazakhstan | 34.9 |
| Uzbekistan | 35.1 |
| India | 35.4 |
| Guatemala | 35.5 |
| Tunisia | 35.7 |
| Philippines | 36.7 |
| Vietnam | 38.1 |
| Egypt | 38.1 |
| Cameroon | 38.4 |
| Nigeria | 39.9 |
| Morocco | 40.4 |
| Jordan | 40.7 |
| Georgia | 40.7 |
| Ukraine | 42.1 |
| Indonesia | 43.0 |
| Belarus | 43.2 |
| Algeria | 43.8 |
| Kenya | 44.9 |
| Pakistan | 45.5 |
| Azerbaijan | 46.9 |
| Source: USDA |
MP: As much as Americans might complain about rising food prices in the U.S. (even though annual CPI food inflation hasn't been above 2% for almost two years), we've got the most affordable food on the planet as a share of income (see chart above). And compared to previous years, today's Americans have the most affordable food in U.S. history (see chart below).
93 Comments:
I'm surprised that you never include comments about subsidizing the farmers and it's potential relationship to cheap food.
This post should be titled 'Americans spend the least out of their incomes on food'. Food in the US I'm sure is quite cheap, but you can't draw the conclusion you do.
mathew-
US food is not cheap. it's VERY expensive by the standards of most of the world.
you can eat a meal for pennies in cairo.
it's just that the US is also VERY rich.
our income is much higher, so even our expensive food is less as a %.
Morganovich - 'cheap' in this context means 'as a % of your income'
mathew-
understood, but my point is that that only matters if you have US income. visitors here will have a very different experience while americans in africa or south america will find the food spectacularly cheap.
it also means that a US priced steak is unsellable in mexico, which has significant implications for trade (though wholesale may be a different matter).
one way to look at this would be:
prescription drugs in the US may well be cheaper as a % of income than in canada whose median income is much lower than ours, but the drugs themselves are still cheaper in absolute dollars, so Americans will seek to import them.
my overarching point is that our food being "cheap" as a % of income has little to do with the absolute price of our food and far more to do with how wealthy we are.
if you took our food prices and compared them to mexican income, food costs would go up as a %.
another way to look at it is this:
say you earn $100 a year.
let's say inflation is 10%. you wages go up 10% and so do all your costs.
if the consumption basket you had last year cost 100, then it now costs 110, but your wages are 110 as well, so you are just as well off.
this seems fine and is the basis for using notions like "food as % of income".
but it hides another factor - your savings are eroding in such a system.
say you have $200 saved. next year that is only worth 180. you have lost $20 of buying power and suddenly you are worse off that you were despite the cost of your consumption as a % of income not having changed at all.
this is why i tend to resist these "expense as a % of income" metrics as they can often hide more than they reveal.
you could argue that wages went up as quickly as food prices under the hungarian hyperinflation as well (and be right) so that the %'s did not change meaningfully, but that misses the whole point of what was going on and its effects on savings and on those with fixed incomes.
This suggests that the rural welfare state we have created, and heavy rural subsidies and regulations, actually work.
There is no more mollycoddled, enfeebled, regulated, knock-kneed, protected sector than our agriculture sector.
This post confirms that inflation is not under-reported. If inflation were truly lowering living standards, then people would be spending more, not less, on food.
However, I must note that almost every place on the planet has better food than the USA. You can get better food from a roadside vendor in Thailand than in an expensive US restaurant.
I a curious on if the data is available by income quintile? There are many alligations that the "poor" spend more on food, so i'm curious if these national statistics aren't washing out any actualy problems.
Residents of the Ukraine pay 42.1% of their incomes on food. The Ukraine has abundant rich soil and growing conditions to be the Breadbasket of Europe. Why is food so expensive?
According to the CIA Factbook:
The Ukraine liberalized markets after 1991 independance from the Soviet Union and the framework for privitzation was set. The government resisted reform and so:
" Output by 1999 had fallen to less than 40% of the 1991 level."
Benji,
"There is no more mollycoddled, enfeebled, regulated, knock-kneed, protected sector than our agriculture sector."
Wrong. The most mollycoddled, blah, blah, sector is the public sector. And your boyfriend's Organizing for America is currently directing the protests of these parasites in Wisconsin. He's also undermining and promising to veto the GOP budget cuts you told us would never happen when they took over the Congress.
"... almost every place on the planet has better food than the USA. You can get better food from a roadside vendor in Thailand than in an expensive US restaurant."
Don't let the door hit you on the ass on your way out.
Morganovich,
I don't think we disagree on anything, but I think you're framing it wrongly. One of the reasons the US is rich is because food is cheap*, you can only be rich in relation to the price of goods and services.
* in terms of hours worked, or similar metrics.
I would be interested to see the percentage of that income spent on cheaper, machine-processed foods in comparison to the more natural (and more expensive) foods like fruit and vegetables worldwide. I also bet americans are near the top of unhealthiest eaters.
I am sure to predict there will be a natural bias towards more americans buying processed foods so naturally that income percentage spent on food will skew itself lower but, at the expense of an unhealthier lifestyle.
Interesting material though....
"I'm surprised that you never include comments about subsidizing the farmers and it's potential relationship to cheap food."
It would be an insignificant amount overall. Plus almost all the countries on the list, also subsidize farmers. Its a worldwide epidemic.
"This suggests that the rural welfare state we have created, and heavy rural subsidies and regulations, actually work."
Thats probably not correct. Agriculture subsidies, in the grand scheme, don't account for much. And they are targeted to only some specific agricultural products. I don't think that overall, they play much of a contribution to the cheaper prices.
"US food is not cheap. it's VERY expensive by the standards of most of the world."
Thats not necessarily true. It is cheaper, for example, than almost anyplace in continental Europe.
"you can eat a meal for pennies in cairo"
"Meal" has many meanings. You can eat a "meal" for pennies in the US. A can of Goya beans will run you about 50 cents, but how many of us would consider that a "meal"?
"my overarching point is that our food being "cheap" as a % of income has little to do with the absolute price of our food and far more to do with how wealthy we are."
It actually may have to do more with the quality of the food, and its availability whenever you want it.
What you say is true, but it isn't very interesting. Being wealthier, we demand far higher quality food and services, so we can't compare "food" in the US with "food" in Mexico.
I remember eating breakfast at my company's factory in Mexico one time when I was down there. It consisted of a couple of spoon-fulls of beans and a jalapeño pepper on top. It was good, but I don't think most Americans would consider that as "breakfast" food.
Meanwhile, the US is the world's largest exporter of food (so in absolute terms, the prices of US products must still be very competitive)
So Prof. Perry's post is even more interesting when we consider that not only does the US have one of the lowest expenditures on food in the world, it also has one of the highest quality foods in the world.
"I would be interested to see the percentage of that income spent on cheaper, machine-processed foods in comparison to the more natural (and more expensive) foods like fruit and vegetables worldwide. I also bet americans are near the top of unhealthiest eaters."
There's few things that are cheaper in American supermarkets than fruits and vegetables. Whats the price of an apple or an orange? You can buy a giant bag of oranges for 5 bucks. Potatoes? Beans? They're the cheapest things in the supermarket.
So we may want to be careful here when we talk about processed food as being "cheaper" or "unhealthier". Most people in the world don't eat "natural" foods out of dietary preferences, but because most people don't have access to a supermarket, first of all, or access to processed foods.
People buy processed foods because they taste better and are more convenient. You can buy a dozen oranges instead of one McDonald's burger...but we don't. Good or bad, we're animals like all others.
Does that include just the food that the individual consumes? Or does it also include the food we're forced to buy for others to consume via food stamps, free school lunches, free school breakfasts, etc.?
"According to the CIA Factbook:
The Ukraine liberalized markets after 1991 independance from the Soviet Union and the framework for privitzation was set. The government resisted reform and so:
" Output by 1999 had fallen to less than 40% of the 1991 level.""
Hmm. I don't know if these figures are accurate or not, but things have changed considerably in the Ukrainian agriculture sector (and economy) since 1999. They may have rebounded to 1990 levels by now.
But one of the major problems in places like Ukraine (and I'd assume almost all other developing countries), is the seasonality of prices. The price difference in the FSU between tomatoes in the summer and winter can be as much as 20 times, for example.
We don't see this seasonality as much in the US (almost invisible), because of what I mentioned earlier...the services we get from our agriculture and food sectors are far better then elsewhere.
b-
"This post confirms that inflation is not under-reported. If inflation were truly lowering living standards, then people would be spending more, not less, on food."
that statement is completely false.
wages are just another price. they move with inflation.
read the example i worked through just above your post.
even in the weimar and hungarian hyperinflation, wage/food price rations were stable. workers were able to eat just as they ever did.
it's those who have lent money, have savings, or live in fixed income that get hurt by inflation as it erodes their value.
i am left wondering if you understand how inflation works.
imagine an economy in which there is perfectly even inflation of 10%.
if wages are up 10% and food prices are up 10%, you see a static food price to wage ratio.
if wages were 100 and food was 7 (as the above ratio indicates) then they shift to 110 wages and 7.7 food.
7.7/110 = 7%, just as before.
so, 10% inflation causes zero change in ratio.
so how do you figure this ratio tells us there is no inflation?
if you were living off savings or social security, you'd see buying power diminish significantly.
Our rural economy is not just subsidized by crop subsidies through the USDA. Everything in rural America is subsidized, from highways, to water systems, to pwoer systems, to telephone service. You think the Post Office loses money on urban deliveries? No, you pay 48 cents so some rural dingdong can get mail delivered every day.
The US military is a federal agency financed by Congress, a political body. Rural sttes, despite small and backward populations, have two Senators each. Ergo, the military in large part has become a rural lard machine.
I think our food has become relatively cheap because of the rising producticity and incomes of urban workers, and subsidies that disguise the true cost.
"I think our food has become relatively cheap because of the rising producticity and incomes of urban workers, and subsidies that disguise the true cost."
The important issue here, is magnitude. How much are these subsidies and how much do they really contribute to decreased food prices?
Assertions of this sort can be made for every field, but the hard question is: how much is it really?
Furthermore, is they actually do help keep food prices down, the question becomes if it is worth doing so or not.
Overall, however, the subsidies of US agriculture are probably not the reason that the US has comparatively the lowest food expenditures, because everyone else also subsidizes food production (and some countries, like EU, much more so than the US)
Che-
Don't the the toilet lid hit you on your way down.
Benji,
"Ergo, the military in large part has become a rural lard machine."
Which reminds me, your boyfriend has threatened to veto the GOP's military budget cuts.
How does this square with anything you say around here regarding the GOP and your boyfriend?
And, oh yeah, you have said several time on this blog how your boyfriend would balance the budget in his second term. That prediction has been made a laughingstock by the release of your boyfriend's budget projections a couple weeks ago. Not even he is projecting anything close to a balanced budget even though he projects the rosiest of rosy scenarios to make his coming debt explosion look smaller.
aig-
"What you say is true, but it isn't very interesting. Being wealthier, we demand far higher quality food and services, so we can't compare "food" in the US with "food" in Mexico. "
i would be VERY careful assuming that US food is better than the rest of the world.
this is exceedingly debatable and far from uniform. our food is also far more processed and steroid, hormone, and antibiotic laden than pretty much anywhere in the world too.
the food in europe is much more wholesome, even in poor places. the food in lebanon is fantastic and far fresher then ours. the same can be said of many dozens of places.
we eat a diet heavy in chemicals, salts, and refined sugars leading to all manner of health issues.
so sure, you can get a terrible meal in mexico, but you can get terrible food all over. our Hawaiian bed and breakfast made omlettes with spam. you ate at a factory. try grabbing some chow from the canteen at a plant in cat butt mississippi. it's not going to be much better.
try finding something to eat on the drive from park city to jackson hole that isn't vile. (and if you can, i'd be obliged if you could let me know as i do that drive to visit a cousin).
Paul-
Actually, I only give Obama a "C," although that is higher than the "F"--or rather "G" or "L"-- that I gave Bush jr.
Where is Cat Butt, Mississippi?
"i would be VERY careful assuming that US food is better than the rest of the world.
this is exceedingly debatable and far from uniform. "
True. Its debatable, and it depends what you consider to be "better". Food in "Lebanon" (insert any developing country's name in here, actually) may be "better tasting" then ours. But how much do you think tomato prices swing in "Lebanon" during seasons?
I personally don't subscribe to the opinion that the "better taste" is worth the substantially higher price of such food (as a % of income), or their seasonal volatility. I come from a country where every tourist says "the food tastes so much better"...until you live there. Then the food sucks cause you have to spend 40% of your money just on food...and you have a very monotone diet because there is very little variation, or availability of exotic foods, or availability of processed foods, all of which we take for granted in the US. Try living on humus and lentils for 365 days a year.
"our Hawaiian bed and breakfast made omlettes with spam"
Isn't spam a Hawaiian tradition?
Benji,
"Actually, I only give Obama a "C," although that is higher than the "F"--or rather "G" or "L"-- that I gave Bush jr."
That's a typical Benji idiotic answer. You've assured us incessantly the GOP is that party of bloated budgets. You've told us your boyfriend is on his way to balancing the budget. How do you account for current events? And yet you still give your boyfriend a C? Only true love could explain a scoring so inconsistent and selective.
Looks like there is no place to go but up, from here. Much of the ag subsidies honked about here are actually conservation subsidies, and have little to do with production of food.
If you only count the subsidies that are attributed to the production of food (or cleaning up after), you might find they are not as great as claimed.
For example, you can get a 70% cost share on putting up new fencee, if you put it at least 100 feet from a streambed, to keep livestock out.
This is not a direct subsidy to food prodution, and might increase costs by taking land out of service. However, it is true that any such money keeps farmers in business that otherwise might fold, and send prices higher.
On the other hand, absent the subsidies, and restrictions that go with them, fewer farmers would probably use more ground to produce more food and prices would still fall a little.
But what happens to the rest of the land? Fallow? Forest? Development? Valueless? And what happens to the farmers? Retired, unemployed, retrained? Any of these things have costs that would have to be considered in determining the "cost" of eliminating or reducing farm subsidies.
The military occupies rural space because it needs lots of land and it is pretty noisy. We dont have to many mid town aerial ordinance ranges, so that is a subsidy from the rural areas to the urban areas.
And let me know where your urban garbage gets buried. Another rural subsidy to urban areas.
Morganovich assumes wages rise at the same time as other inflationary costs, but often, it seems to me, there is a substantial lag.
I don't think the theory exactly matches the facts in this case.
I think a lot of surplus food that is bought up goes to school lunch programs, soup kitchens, etc. So it reduces the cost that you might be "forced to pay" for others, but I'm not sure how that washes out.
I know that cheese, for example, winds up in school luch programs, but seeing as how only five commodity crops get subsidies, I'm not sure how all that works. I do know that I have seen unlabeled (but marked as to contents) canned goods that appear to be government issue in the homes of people that I know are receiving assistance. I assumed that was part of some kind of wealfare program, but do not know what.
try finding something to eat on the drive from park city to jackson hole that isn't vile.
===============================
Eat, Drink, and Be Merry. Tomorrow you might be in Utah.
Probably get some fresh road kill on that drive.
we eat a diet heavy in chemicals, salts, and refined sugars leading to all manner of health issues.
=================================
I don't buy into this. Sugar is pretty much sugar, and cleaning it (refining it) doesn't make it any worse, that I can tell.
"Chemicals", such as Banana oil used in artificial banana flavor is indistinguishable from natural banana oil by any known test.
Yes, I agree that hormone laden meat is probably a bad idea, and I'm not too sure about some preservatives, either.
A commercial milkshake is probably full of methyl cellulose, a non-digestible, inert filler and thickener. Won't do any harm, probably, but I have a problem with calling that concoction a "milk" shake.
Same for the "chocolatey Chip" cookies. What is that stuff? OK so it is probably Carob, but just say so.
Then there is a whole slew of sashimi imitation shrimp, fish, lobster, crabmeat, etc. I don;t mind eating krill, or whatever that stuff is made from, just don't tell me it is crabmeat.
We probably grow around one third of our own food, not because it tastes better or s chemical free, but because we like to do it: lord knows it doesn't save any money.
However, I do believe that a chicken that walks around and eats bugs for a living tastes a lot different from one raised in a cage on various kinds of food waste pellets. Plus you get to look her in the eye before you eat her.
I still think the general and dismissive "chemicals and prepared foods" thing is overblown. Too much food and not enough exercise is probably a far greater problem.
The Ukraine has abundant rich soil and growing conditions to be the Breadbasket of Europe. Why is food so expensive?
=================================
I wondered that too, and I concluded it might be because they mainly grow wheat, on an industrial scale, which they sell and import food.
"There is no more mollycoddled, enfeebled, regulated, knock-kneed, protected sector than our agriculture sector."
==================================
Spend one weekend working on a farm, for farm wages, and then tell me that.
I used to run out of daylight, but now that I'm older I find I run out of energy. Either way, it wasn't worth the money.
Hydra-
Yes, field hands (largely illegal immigrants) might work hard. I just spent two weeks on a farm in Thailand, planting fruit trees. By hand. Farmers there have their own water pools, diesel pumps, dirt roads etc. No federal handouts.
Unfortunately, in the USA farmers have had 80 years of mommyism from the USDA. The creation of a welfare agriculture culture has had decades to sink in. There are two Senators from 12 farm states, making up the Red State Socialist Empire.
The whole ethanol program is just another rural welfare program in drag.
Imagine if President Obama announced a "Urban Liquid Fuels" program, creating liquid fuel from urban waste streams. Imagine you were required to buy this additive every time you filled up your car. It was mandated! Imagine the Urban Liquid Fuels lowered your gas mileage, and was subsidized to boot. You paid taxes for an mandated additive that lowered your mpgs.
I have just described our ethanol program.
Where is all the howling from the right wing? The Tea Party? The Republicans?
Ethanol is just a small part of the Rural Welfare Culture we have created.
aig-
"I personally don't subscribe to the opinion that the "better taste" is worth the substantially higher price of such food"
ahh, here is where we differ. i lived in san francisco for 15 years and was happy to pay the high food prices for the higher quality. i now live in park city and would gladly pay SF prices to get that quality again...
ironically, the grow hothouse tomatoes in lebanon and they are available and fresh all year, but i do understand what you are arguing.
that said, i find the eggs that come from the vast US factory farms unspeakably vile and virtually inedible, so bigtime automation and industrialization of food to make it cheap and constantly available has it's price as well.
and yes, spam is a Hawaiian tradition, but that does not make it taste any better. yech.
"I don't buy into this. Sugar is pretty much sugar, and cleaning it (refining it) doesn't make it any worse, that I can tell."
this is not true at all. fructose is very different from sucrose which in turn is very different that the corn syrup so commonly used in the US.
just the additional glycemic load from HFCS is brutal and a major source of US adult onset diabetes and obesity.
commercial milkshakes are also full of estrogen (assuming they use real milk). they give it to dairy cows to make them give more milk. it comes out in that milk and can play hell with your hormonal balance, especially if you are prepubescent.
and i totally disagree about the chicken. when you eat "yard bird" in the carribean or whenever, it has much more flavor than the stuff they sell at safeway.
a great deal of that has to do with age. we do not eat chickens, we eat chicks bred to be enormous and grow to maturity quickly. without the steriods and antibiotics, that might be OK from a nutritional standpoint, but the flavor suffers.
this is not so with fruits and vegetables though. tomatoes picked green and ripened in a truck have lower vitamin and particularly mineral content. they also tend to taste like cardboard.
"Eat, Drink, and Be Merry. Tomorrow you might be in Utah"
having now lived in park city for a month, the food is not bad (though nothing like the bay area). but once you get out of PC and into the hinterlands of utah and wyoming, oh man is the food bad. you can't even find a decent burger. woof.
Benji,
"Yes, field hands (largely illegal immigrants) might work hard."
I used to visit and work on my uncle's dairy/ag farm when I was a kid. Your implication that he and other farmers don't work hard only demonstrates how you talk out of your ass here on a regular basis. It was 7 days a week from 4AM to sunset.
"Where is all the howling from the right wing? The Tea Party? The Republicans?"
Well, right now they're too busy trying to cut the staggering debt your boyfriend and the Pelosi Democrats ran up the past 4 years.
Frank Morgan-
I understand economics fine. If Americans truly had declining living standards (as you maintain) we would likely see increasing fractions of income spent on food. Instead we see decreasing fractions, indicating Americans are getting richer.
Along with many other realities, this completely destroys your pet peeve that inflation is somehow being undercounted.
If we were undercounting inflation as much as you have suggested, then real income would be falling in the USA, per capita. Instead, these charts suggest we are getting richer.
Really, you gotta give up on this fake inflation stuff. You have no evidence to support your views, only phantoms.
"You have no evidence to support your views, only phantoms."
The lack of self-awareness here is truly unbelievable.
Yes, Americans spend less on food as a percentage of their income than most people. But that has to do with the high average income, not the low prices. Of course, the 'average' income has no real meaning for most people because there are a small number of people in the US who get such a large proportion of the national income. (Which is true in a lot of other countries.)
The problem for the working class American is that he is having a harder time as more of his income goes for food than it did before. That is because of price increases that have been passed on to the final consumer. Because of this increased burden the lower quality discounters are booming while the higher priced stores are stagnant or losing market share.
I own my own farm, and I am my own field hand, right alongside my legal hired help.
You wont get any argument from me about ethanol, other than I don't think it is as bad as depicted by one side or as good as depicted by the other.
Still, I may plant corn this year as a result.
What happens when it also takes more energy to get oil out of the ground than the oil produces? As far as that goes, my main crop is hay. Surely it produces less energy than it takes to make. Eventually we switch to solar powered oil pumps and coal powered tractors?
A rural road costs a fraction to build as an urban street, and it carries a fraction the traffic. Seems like the answer to congestion is move more people to the country, and make better use of the roads we built there.
Morganovich:
You are correct fructose is different ... etc.
I only meant that refined sugar is no worse than raw sugar.
Unlike refined flour which is definitely different from whole grain. I just don't agree that natural is always "better". Or that chemicals are always bad.
You misunderstood me. We agree about yard birds and tomatoes.
We pick vegetables, corn in particular, and blanch it immediately and freeze it. It is still delicious in Feb. But even an hours delay makes a big difference.
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"The problem for the working class American is that he is having a harder time as more of his income goes for food than it did before. That is because of price increases that have been passed on to the final consumer. Because of this increased burden the lower quality discounters are booming while the higher priced stores are stagnant or losing market share."
Where do you find all this garbage you're posting? Jesus H Chirst...do you ever post anything that isn't utter made-up BS?
"ahh, here is where we differ. i lived in san francisco for 15 years and was happy to pay the high food prices for the higher quality."
First of all, you're addressing something totally different from the point I was making. Second of all, you just proved my point ;)
Food in the US, in absolute terms, is higher priced because we are willing to pay higher prices for the higher quality that comes with it. You just don't want to share my view of what "quality" means. In my view, it doesn't mean "taste"...it means having whatever you want, whenever you want, in the most convenient way you want it.
"that said, i find the eggs that come from the vast US factory farms unspeakably vile and virtually inedible, so bigtime automation and industrialization of food to make it cheap and constantly available has it's price as well."
And yet in the US you have the option of buying about 3 dozen types of eggs produced in about 3 dozen types of manners...and each is priced appropriately.
And thats the point. Most of the world, on the other hand, only has eggs produced by a small-time farmer...which are inevitably much more expensive and that means that much fewer are available and much fewer are consumed than in the US (per capita). Thats not a good thing, in my book, regardless of taste (because in the US you can get that taste too, when you want it)
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"The problem for the working class American is that he is having a harder time as more of his income goes for food than it did before"
Jesus H Christ!!
http://2.bp.blogspot.com/-
MGAeoOxCSUk/TWO8sjJ3NDI/AAAAAAAAPAE/u
lHSoLyTRoM/s1600/food.jpg
"and i totally disagree about the chicken. when you eat "yard bird" in the carribean or whenever, it has much more flavor than the stuff they sell at safeway."
Yes but I don't quite understand this discussion over "taste". In the US you can buy whatever taste you wish.
The real argument, is that in the Caribbean, you'd be lucky if you could afford to eat chicken once a month. Who cares what it tastes like?
Where I come from, you were lucky if you could afford to eat a single egg per week. Who cares what it tastes like?
Morganovich says: "i lived in san francisco for 15 years and was happy to pay the high food prices for the higher quality."
I spend a lot of time between San Francisco and Denver. I don't see the higher quality in San Francisco. However, I do see the higher prices.
It seems, people in San Francisco have been brainwashed into believing if it's expensive, it must be good.
I'm amazed people in San Francisco put up with the higher cost of living, than anywhere else in the country. They effectively work harder for less.
"It seems, people in San Francisco have been brainwashed into believing if it's expensive, it must be good.
I'm amazed people in San Francisco put up with the higher cost of living, than anywhere else in the country. They effectively work harder for less"...
Bingo!
Exactly PT!
Good call...
These are 2008 figures.
A lot has changed in the world since then!
As Tom the first poster mentioned, US farmers are heavily subsidised. The money for subsidies still has to come from somewhere.
Why measure and chart food as a share of income in this chart and not taxes as a share of income in Sunday's post about the percentage of taxes paid by the top 1% of income earners "Three charts tell the story"? Is this a valid metric or not? Food, taxes, you need the money to pay for both, right?
What happens when it also takes more energy to get oil out of the ground than the oil produces?
At that point you will not be producing oil for its use as an energy source. This is what we need to do with ethanol now because it does take more energy to produce than you get out of it.
As far as that goes, my main crop is hay. Surely it produces less energy than it takes to make.
Does it? The plants convert solar energy into biomass. The hay is used to provide energy (via that biomass) to the cows that eat it.
Eventually we switch to solar powered oil pumps and coal powered tractors?
Solar is a net loser and will remain a net loser for a very long time into the future. Coal powered tractors make little sense. Tractors will run on liquid fuels for decades.
A rural road costs a fraction to build as an urban street, and it carries a fraction the traffic. Seems like the answer to congestion is move more people to the country, and make better use of the roads we built there.
Confusion alert. Rural populations are not as efficient because of the low densities. More traffic on country roads will destroy those roads quickly.
Where do you find all this garbage you're posting? Jesus H Chirst...do you ever post anything that isn't utter made-up BS?
No BS required. The 'average American' does not get the 'average wage' or spend the proportion of income that is shown in the charts. As usual, Mark posts a chart that has no real meaning in the real world.
"The problem for the working class American is that he is having a harder time as more of his income goes for food than it did before"
Jesus H Christ!!
http://2.bp.blogspot.com/-MGAeoOxCSUk/TWO8sjJ3NDI/AAAAAAAAPAE/ulHSoLyTRoM/s1600/food.jpg
What does the chart have to do with the experience of the typical working class American? With the bulk of income going to the top 10% of the population, the working class American is having a much harder time than the chart implies. Here is a chart that tells us a problem that is hidden in the aggregate reporting.
http://tinyurl.com/6k6oo6e
As Tom the first poster mentioned, US farmers are heavily subsidised. The money for subsidies still has to come from somewhere.
It comes from the taxpayer. If the BLS were honest all subsidies would be added to the cost of food.
aig-
"Yes but I don't quite understand this discussion over "taste". In the US you can buy whatever taste you wish. "
this is simply not true.
try finding fresh, never frozen, non genetically modified adult chicken in a major city in the US.
hell, try finding fish that hasn't been flash frozen.
lots of us prefer food that tastes good.
benji-
"I understand economics fine. If Americans truly had declining living standards (as you maintain) we would likely see increasing fractions of income spent on food. Instead we see decreasing fractions, indicating Americans are getting richer."
no, it's clear that you do not.
you are confusing living standards with wage inflation.
did you understand the example i laid out at all?
food price as a 5 of wages says NOTHING about inflation rates. you could have 1000% inflation in each and not move the ratio.
that it not the same as zero inflation or zero living standards change.
if you make $100 a year and buy $100 worth of goods etc, then inflation of 10% means you make 110 and spend 110. however, if you have any savings at all they decline in value and you lose buying power.
you seem unable to grasp this basic point.
you seem convinced that 10% wage increase and 9% hikes in food prices are deflation.
and you wonder why i doubt your education...
this is simply not true.
try finding fresh, never frozen, non genetically modified adult chicken in a major city in the US.
hell, try finding fish that hasn't been flash frozen.
lots of us prefer food that tastes good.
You can find those things in large cities that have a large market interested in food that tastes good. But I do agree with our friend that the American system of production has a huge advantage that allows more poor people to have access to perfectly acceptable food.
Where he gets mixed up is in confusing the reported aggregate numbers with meaningful reality.
v-
"You can find those things in large cities that have a large market interested in food that tastes good."
that's simply not true.
i went back and forth from san frnacisco and manhattan for 15 years, two of the top foodie cities in the US, and you cannot anywhere buy the kind of chicken you get in the carribean.
i have lots of friends who run restaurants in both places all of whom agree that this is true., particularly those that have cooked in europe.
i agree that you can get an awful lot of things in the US and that our variety is fantastic, BUT, getting back to the prices issue, shopping at whole foods or the san francisco ferry building farmers market (which is about twice the price of whole foods) to get free range organic chicken (which is still not really an adult bird in most cases) you are paying prices 2 and 3 times those of frank purdue.
this sort of brings us back full circle. so sure, you can get food of reasonably comparable wholesomeness, but you are paying a helluva lot more for it. the prices in the chart DR perry used are not for that sort of food.
having spent time living in several european and australian cities, i can tell you that grocery shopping is much cheaper there for the kinds of things i wanted to buy that shopping for similar things in NYC or SF.
Confusion alert. Rural populations are not as efficient because of the low densities. More traffic on country roads will destroy those roads quickly.
==============================
Not as efficient how? They travel more distance, but spend less time doing it because they are not stuck in traffic. Is a rural plumber less efficient than an Urban one? I know I can get one sooner for my rural home than the city home.
The roads are built to state standards, same depth of gravel, same thickness of blacktop. What makes them cheaper is that you don't have to put all kinds of other infrastructure under them, and tear it up to fix whats under.
Also the land is cheaper, and you are less likelyto have to move structures if you need to move or widen the road,
I think Vange is right about the meaningless graph, and averages.
Eventually we switch to solar powered oil pumps and coal powered tractors?
Solar is a net loser and will remain a net loser for a very long time into the future. Coal powered tractors make little sense. Tractors will run on liquid fuels for decades.
===============================
I agree, but I'm only pointing out the weakness in the argument that it takes more energy to make ethanol than you get back.
As far as that goes, my main crop is hay. Surely it produces less energy than it takes to make.
Does it? The plants convert solar energy into biomass. The hay is used to provide energy (via that biomass) to the cows that eat it.
================================
I'm pretty sure that the tractor uses more energy than the hay produces once metabolized by the cow. But it doesn't matter because the price is higher (for now).
But if it does produce a lot more energy than the tractor uses, we shold be able to extract it as ethanol (or something) and come out ahead even after the energy losses associated with the chemical or mechanical processes needed to convert it: same as the cow.
If that is the case, then the argument that ethanol consumes more power than it creates goes out the window.
???
"No BS required. The 'average American' does not get the 'average wage' or spend the proportion of income that is shown in the charts. As usual, Mark posts a chart that has no real meaning in the real world."
Again with the completely made up BS.
Who do you think makes the "average wage"? The upper 5%? What is this "average working class American" you pretend to associate with?
Why do you feel the need to make up any and all sort of BS only to prove any and all anti-American points you can make?
What DOES the "average" American make according to you? And how is it not reflected in the chart provided?
"What does the chart have to do with the experience of the typical working class American? "
What do you know about the average working class American? Who is this average working class American?
How can a "Libertarian" be such a complete freaking moronic socialist when it comes to making anti-American comments?
"With the bulk of income going to the top 10% of the population, the working class American is having a much harder time than the chart implies. "
Again...you're making arguments that are full of s***.
But whats new?
"Here is a chart that tells us a problem that is hidden in the aggregate reporting."
Again, you have NO CLUE what you're talking about, and will make any and all claims only to make an anti-American point. If that means making the same claims as your run of the mill socialist, well you have no problem doing it.
Do you have any idea what the food stamps participation numbers mean? Do you know who participates in them? Do you know what relation that has with the "average working class American"?
No you don't, nor do you care.
I know someone who has an MBA degree, and is a lazy f*** and works for the "Peace Corps" where he receives food stamps as part of his compensation. What does that tell you?
Nothing.
The average working class American, according to YOU (backed up by jack s***...as usual), is spending MORE MONEY ON FOOD then ever before. Have wages and benefits for the "average working class American" gone UP since time immemorial? Has the price of food decreased?
Then by WHAT logic do you make such an plainly stupid claim? And keep defending such a plainly stupid claim, with points that are even more stupid (well the top 10%...)
A "Libertarian" you say?? I thought as much.
At that point you will not be producing oil for its use as an energy source. This is what we need to do with ethanol now because it does take more energy to produce than you get out of it.
==============================
I think you talked yourself into circular logic. If hay produces more energy than it takes to run the tractor to make it, then surely corn does.
Now it is a question of the efficiency and value of what you convert it to: cows or ethanol.
I don;t think we are going to be burning cows any time soon, unless it is on the grill.
"this is simply not true.
try finding fresh, never frozen, non genetically modified adult chicken in a major city in the US."
Are you kidding me? You lived in San Fran you said? Ever heard of Chinatown?
try finding fresh, never frozen, non genetically modified adult chicken in a major city in the US.
===============================
I can get free range organic chicken at my local IGA, and it comes from a local farm.
So omuch for the urban workers are more efficient, argument.
However, even the locally produced and delivered organic free range chicken is frozen.
So is my own homegrown chicken.
"Where he gets mixed up is in confusing the reported aggregate numbers with meaningful reality."
I agree with that statement VangeIV. I didn't use the average temperature in the U.S. this morning to decide whether to wear a coat outside. Instead I looked at the thermometer outside by my patio and saw it was -3 degrees and made my coat choice. That was a relevant metric to use for that decision.
The CPI is as useful to me as the average U.S. temperature. A glance at my personal financial spreadsheet shows groceries up 6.83% in the last 52 weeks as compared to the prior 52-week period. My dining-out expense is up 2.29% in the same time period. That tells me my grocery bill is rising about three times as fast as my restaurant bill is rising. Of course, whether the share of my income for food has gone up would depend on what share of my income was for food and how fast my other expense categories have risen over the last 52 weeks along with choices I made for eating in or out in the past and present and assuming my income is held constant (I can assure you my income has not went up).
CPI indicators are useful for government policy makers and COLA calculations just as the average U.S. temperature might be important for those who are studying global warming. These aggregate indicators, even if they are accurate, apply to no one while many assume they apply to everyone: That’s a big mistake and huge deception.
in 2009 the average compensation was 39,054, and the median was 26,261.
The average person does not make the average wage.
And the ratio of median to average has been decreasing consistently since 1990, from 71.8% to 67.2
http://www.ssa.gov/oact/cola/central.html
Are you kidding me? You lived in San Fran you said? Ever heard of Chinatown?
==============================
Are you sure that was even chicken?
aig-
"Are you kidding me? You lived in San Fran you said? Ever heard of Chinatown?"
are you joking? you want the worst chicken in SF, go to chinatown.
where do you think they get it? you think they are raising organic chickens down on kearney st?
hydra-
"Are you sure that was even chicken?"
lol.
exactly.
4 legged long tail chicken can get a little gamey.
shopping at whole foods or the san francisco ferry building farmers market (which is about twice the price of whole foods) to get free range organic chicken (which is still not really an adult bird in most cases) you are paying prices 2 and 3 times those of frank purdue.
================================
So what? I grow my own free range chicken and it costs three times as much as frank perdue.
Its one reason we only grow about a third of our food,
Hydra,
Did you mean the average person does not make the median wage?
Also, you mixed two terms: compensation and wages together. Compensation usually includes fringe benefits. Since quite a few people are still getting health insurance paid by their employer, and the cost of that insurance is rising faster than a lot of other items. Accordingly, compensation can rise with wages staying flat. Somebody has to pay for all of that, but it is not always counted in the analysis.
I think the point that someone is trying to make is that there are more people earning the median wage than there are the average wage. In other words the average person, or a person picked at random is likely to earn less than the average wage.
Therefore the chart, as presented, does not accurately portray the food hardship felt by the most number of people.
You are right about compensation and wages: the data comes from a chart which mixes the nomenclature for compensation and wages. I doubt if it makes a substantive difference: there are more people who make less than the average (with or without benefits) than make the average or above, and they will fell food price distress sooner.
If the average person is defined as the guy who makes the average wage, then he makes more than the guy who makes the median wage. He also makes more than most people, who earn a dollar more than the median wage, or less.
If this hypothetical person making the average wage and paying the average food bill, gets the avarage wage increase, which happens to match the average price increase, (and at the same time) then he is no worse off than before.
But considering the trend in the difference between median and average wage, everyone who earns less than him is probably worse off and feeling more food price distress.
"I don;t think we are going to be burning cows any time soon, unless it is on the grill."
That may well be true. The last time I fired up the grill, I used a bag of charcow.
Hydra,
If you are going to make fine adjustments such as that, you need to factor in the food stamps and other aid that the lower group gets that the top of the group might not get.
I think the chart is just fine for general illustrative purposes. It clearly shows that people used to spend about a quarter of every dollar on food and now spend just a dime. That's a good trend that frees up money to spend on other items, and that increases our overall standard of living.
Ron H., cowpie fuel maybe?
"Ron H., cowpie fuel maybe?
No, I don't think so. I'm pretty sure the labeling on the bag indicated that it contained charcow, but I can't be 100% certain, as the bag had been wet, and the end of the word was indistinct. I suppose it's also possible, that the word indicated one of the foods I could prepare on my grill by burning the contents of the bag.
you need to factor in the food stamps and other aid that the lower group gets that the top of the group might not get.
===================================
Regardless, I think the point someone (lost track) was arguing was that wage inflation and food inflation don't track equally and don't track the populaton equally, regardless of what the averages say.
or as the chart puts it:
The reason for the difference [between median and average] is that the distribution of workers by wage level is highly skewed.
I'm guessing that if you make the median wage, you are not getting food stamps, so for them, the argument holds.
Now suppose you go down the scale to those earning so little they are qualified for food stamps. I get $100 a week in food stamps, in addition to my (meagre) salary. If food prices go up, my food stamps don't go up, not right away and probably not for a long time. food stamps or no, I'm going to feel the food price pressure more than someone who earns the average salary (the "average earner" guy) in the chart who doesn't represent the average (or statistically most likely to be selected) person.
I don't think $13000 in alary difference is a fine adjustment, but I don't get your point. are we first going to complain that we are being robbed to provide benefits (such as food stamps) to the unworthy, and then turn around and claim that because they get those benefits, and the benefits are so generous, that they feel inflationary pressures less than those who earn much more?
Morganovich made the argument that if you earn the average salary and your costs and wages go up the average amount, you are no worse off except for your loss in savings. Which is true except the majority of people are not in that boat.
And again, the average person sees the decline in food costs you mention, from a quater to a dime.
But the median person is now worse off thant the average guy by 4%, since 1990, and the quarter to a dme figure is sine 1930 - not very relevant to most people today.
Looking at the 1990 to today figures it looks like 11% down to 9.5%, which implies that that median guy has to reduce his other expenditures 2% more than the average guy, just to meet the same food bill.
If the title had read
"As a Share of Income, The statistically average American has the Most Affordable Food in World & It's Never Been Better"
The problem is that as previously stated the title implies that all Americans are better off because the one earning the average income is, which isn't the case.
Even the poorest Americans may pay less of their income for food than the richest Kenyans, and certainly they are better off in that sense, but they don't compare themselves to Kenyans, and from thier daily perspective they are looing ground, compared to the local average, so they feel worse off, not better.
And that is just the relative Price part of the argument. Relative Value is a lot harder to figure. As somone pointed out, a can of beans here is pretty cheap.
And if you buy an expensive organic chicken at whole foods, it is probably less likely to be tainted than an "organic" chicken purchased in some subsaharan open air souk.
the working class American is having a much harder time than the chart implies.
===========================
I think Vange is right.
If the chart is a deliberate misrepresentation, then it is reprehensible.
But if it is a mere lazy oversight then the average guy needs to understand what he is looking at and what he is not.
Hydra,
Charts can only show generalities and not specifics. If you want to know your own consumer price index, you have to track your own spending.
Professor Perry's "average man" and your "median man" don't exist at the individual level unless it is random. How can something that does not exist be more accurate than something else that does not exist?
I think the trend is more or less accurate. I think the real improvement is in the amount of time working and preparing food. Since time is our most valuable resource because time is all we really have, and we spend less total time on food related events, we are much richer as a society now than we used to be.
Now, if you will excuse me, it's time to eat and go spread my wisdom to my students.
benji-
"I understand economics fine. If Americans truly had declining living standards (as you maintain) we would likely see increasing fractions of income spent on food. Instead we see decreasing fractions, indicating Americans are getting richer."
The fact that the number of households on food stamps has exploded suggest that you have no idea what you are talking about.
"Our rural economy is not just subsidized by crop subsidies through the USDA. Everything in rural America is subsidized, from highways, to water systems, to pwoer systems, to telephone service. You think the Post Office loses money on urban deliveries? No, you pay 48 cents so some rural dingdong can get mail delivered every day.
The US military is a federal agency financed by Congress, a political body. Rural sttes, despite small and backward populations, have two Senators each. Ergo, the military in large part has become a rural lard machine.
I think our food has become relatively cheap because of the rising producticity and incomes of urban workers, and subsidies that disguise the true cost."
Benjamin:
As a college-educated engineer, farmer, business owner, and "rural dingdong", I can pretty much tell that you've never left the cozy hive of whatever groupthink city bastion you grew up in.
Every farm subsidy recipient, on every level, is politically connected. 99% of us never hear about, let alone receive, any of them. The US spends so little on food because we are the best at what we do, not because our government props us up.
The reason you are all able to argue about what tastes better or is better value is because there is some farmer out there who is willing to provide it to you. With no subsidies, usually more onerous tax paperwork, and while being attacked by animal rights and environmental "experts". Give us a freakin' break.
And us backwards states get postal coverage and senators because we're as much taxpaying citizens as you. Get off your high horse.
You wouldn't take credit for the dental industry coming up with a better toothbrush or credit Apple's popular invention to "improved productivity in cities", so why do you assume that you're the celebrity when farmers improve farming techniques?
Not as efficient how? They travel more distance, but spend less time doing it because they are not stuck in traffic.
I can service a large condo complex by adding a few hundred feet of water and sewer pipes and a few thousand feet of copper cable to bring electricity in. Try to do that in rural areas. In a city I can take public transit or walk to work. I can't do that in rural areas unless I am a farmer. And we certainly do not need very many more farmers.
Living in cities is much more efficient. The problem is the complexity that causes great turmoil during crises. Of course, without the specialization offered by cities the rural communities could have some serious problems.
Again with the completely made up BS.
Who do you think makes the "average wage"? The upper 5%? What is this "average working class American" you pretend to associate with?
You seem confused again. The table claims to show the, "Share of Household Spending on Food". Given the fact that the Census showed that the median disposable household income was around $50K we are supposed to believe that the median household spends around $3,500 per year on food. Do you really believe that is the case because I don't believe that. The food for my two kids costs me more than that per year. The only way to get the 6.9% number is to ignore the fact that the top 20% is earning more than 60% of the income and come up with an aggregate.
As I wrote before, Mark has a way of using charts that use aggregates that have little meaning in the real world. Here is a better indicator of what is happening to American food affordability.
What DOES the "average" American make according to you? And how is it not reflected in the chart provided?
I think that using the median disposable household income of around $50K is appropriate. Given that number I find it unlikely that your median American family is spending $14 per day for food.
How can a "Libertarian" be such a complete freaking moronic socialist when it comes to making anti-American comments?
What is 'anti-American' about pointing out that it is very unlikely that the average family is only spending $14 per day on food? I think that ignoring reality is not very pro-American and that when you can't figure out that the numbers that are being presented to you don't make sense you have a serious problem because you can't think for yourself and just want to believe.
I can get free range organic chicken at my local IGA, and it comes from a local farm.
Of course you can. So can most people who shop at a decent store. Our friend's argument is that the chicken you buy cannot match the taste of the chickens that he prefers. He is probably right on that front because your 'organic' chicken likely comes from a local farmer who uses factory farming techniques on a much smaller scale and uses the labeling laws to his full advantage.
So omuch for the urban workers are more efficient, argument.
Bad logic alert. Conclusion not supported by any argument or facts.
However, even the locally produced and delivered organic free range chicken is frozen.
Why is this the case? I can get never frozen organic chicken at most of my local supermarkets. There is no reason why you should not be able to do the same, particularly in a place that should be swimming in chickens.
Again, you have NO CLUE what you're talking about, and will make any and all claims only to make an anti-American point. If that means making the same claims as your run of the mill socialist, well you have no problem doing it.
For the record, I think that socialists are just as anti-American as right wing nutcases like you. Like you, they attack the basic principles on which the US was founded.
Do you have any idea what the food stamps participation numbers mean? Do you know who participates in them? Do you know what relation that has with the "average working class American"?
Yes, I know what they mean. They mean that the charts that Mark posted are total BS. If food prices really were as low as they are you would not have more than 40 million people on food stamps and so many of them would not be working families that can't make ends meet.
But we don't need any spin about what it means because we can go to the actual Census data and find the reported median disposable income level to be just less than 50,000 per household. For Mark to be right that would mean that the median family needs to spend less than $3,500 on food. I smell BS. If you don't it means that you are not comfortable working with numbers and determining what they mean.
I know someone who has an MBA degree, and is a lazy f*** and works for the "Peace Corps" where he receives food stamps as part of his compensation. What does that tell you?
It tells me that the country is in decline because its schools hand out MBAs to any idiot that can afford one and encourages idleness by subsidizing poverty. I do not think that my opinion on that front is very different than yours.
The average working class American, according to YOU (backed up by jack s***...as usual), is spending MORE MONEY ON FOOD then ever before. Have wages and benefits for the "average working class American" gone UP since time immemorial? Has the price of food decreased?
Then by WHAT logic do you make such an plainly stupid claim? And keep defending such a plainly stupid claim, with points that are even more stupid (well the top 10%...)
You are getting all excited about nothing. I merely point out that Mark's table is meaningless because it does not reflect the real world. My logic is simple. When you look at what 7% of the disposable income comes to for the average family you see that it is far too low to reflect the claim that Mark is making.
Now I am not suggesting that other countries don't misreport their data. What I am saying is that the comparison is meaningless because it does not reflect the true experience of many families, and definitely not those near the median.
I think the trend is more or less accurate. I think the real improvement is in the amount of time working and preparing food. Since time is our most valuable resource because time is all we really have, and we spend less total time on food related events, we are much richer as a society now than we used to be.
This is a nice general statement but it is not very meaningful either. I do not believe that the median household works all that much less for its groceries than it did in 1997 or 2000. You cannot use an aggregate income number in a chaotic world where compensation is not scalable to draw meaningful conclusions using methods that tend to assume normal distributions.
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