Josh Zumbrun from the Wall Street Journal has put some interesting graphs together on how the rich and poor spend their money compiled of recent data from the U.S. Labor Department’s Consumer Expenditures Survey.
Two stories pop out.
One is that the poorer you are (in the U.S. at least), the more you will spend of your income (proportionately) on the basic necessities of life: a roof over your head and food.
The second story, as pointed out in an Atlantic article citing Zumbrun’s graphs, raises an important question of how wealth builds on wealth. Derek Thompson notes a very clear trend, by income decile, on the proportion of income spent on pensions and insurance. In other words, the richer you are (in the U.S.) the more you will spend, proportionately, on preserving your wealth.
Those who start off with the least in life are unlikely to even be thinking about insurance and pensions. But increasing housing costs, which disproportionately affect the poor, squeeze what little leftover income people have to even have a chance of building wealth in the first place.