Who Is Rich These Days? The Income Gap Myth

A while back, The Fiscal Times sparked a controversy by publishing an article arguing that a family with an income of $250,000 per year is not really rich. When taxes, housing costs, college costs for children and so on are accounted for, even those with an income five times the median family income are just barely getting by, it said.

Subsequently, The New York Times published an article sympathizing with the plight of those making only $250,000. They are certainly not poor, but neither are they rich in any meaningful sense of the term, it said.

In December, the Times reported that many rich people have seen a sharp drop in their income during the recession. Since then, there has been a steady stream of reports that financial institutions based in New York City have significantly reduced bonuses for their top executives – a major portion of their yearly compensation. New York City government officials have even expressed concern about the economic impact.

Last week, Bloomberg News reported that one Andrew Schiff, who makes $350,000 a year working for his brother’s investment firm, lamented that he can’t afford to upgrade his family’s Brooklyn duplex and may have to give up his summer rental in Kent, Connecticut.

And this week, The Fiscal Times reported that a WSL/Strategic Retail study recently found that a middle class family needs at least $150,000 of income just to cover the basics. Read more.....