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Eric Kayne for msnbc.com
Nathan Palmer, left, and Brett Jones at their home in Victoria, Texas.
Does $50,000 a year seem like plenty to live on, or not nearly enough?
If you said somewhere in between, that makes sense because $49,445 is the national household median income, meaning about half of all households live on more than that and half on less. The figure, based on 2010 calculations, was reported in September by the Census Bureau as part of an extensive report on income and poverty.
In some places and circumstances, $50,000 is enough for a large family to live comfortably. In others, it’s not even enough for a single person to afford rent, utilities and other expenses.
Four years into the deepest economic downturn in a generation, some Americans, especially those who have experienced bouts with unemployment, are overjoyed to be earning $50,000 a year. Others are devastated to have seen their incomes fall so far.
For some, it’s a mixture of both.
We recently asked the readers of TODAY.com's Life Inc. blog to let us know what it's like to live on about $50,000 a year, and we got hundreds of responses.
“While unemployed I would have been thrilled to make $50,000,” said Dawn Mogan, 55.
Now that she actually makes that salary after two years of unemployment, the single mom in Texas still worries constantly about money.
U.S. Census Bureau
Adjusted for inflation, median household income has fallen over the past few years.
Many of the readers who wrote to us say that on $50,000 a year they can put food on the table, pay for necessities and even splurge occasionally on a dinner out or a game for the family.
But others told us they have to watch their budgets closely and occasionally make sacrifices to get the bills paid.
“It's not poverty. We don't miss meals and we make MOST of our bills. However, we live paycheck to paycheck, and we carry debt,” wrote Brett Jones, 37, who lives with his partner in Texas.
Many feel like they are treading water — and for good reason. After adjusting for inflation, the nation's median income has fallen about 7 percent from its peak in 1999, reversing a fairly steady increase that lasted for five decades from 1950, according to Census Bureau figures.
The troubles started when the nation last fell into recession in 2001. From 2000 to 2007, household income was virtually stagnant, said economist Heidi Shierholz with the Economic Policy Institute.
“Even that was dramatic,” she said.
Then came the Great Recession of 2007-09 and its ugly aftermath.
From 2007 to 2010, the Census Bureau estimates that median household income fell by 6.4 percent, to $49,445, as unemployment soared to a peak of over 10 percent. (The jobless rate dropped last month to 8.6 percent — still high by historical standards although the best level in more than two years.)
Of course, median income varies a lot depending on what kind of household you live in. For families, defined as two or more related people living together, median household income was $61,544 last year. For single people, it was $29,730.
Gordon Green, a former Census official who is now a partner in Sentier Research, has been using government data to track monthly changes in American income levels.
He wasn’t too surprised to find that median income fell during the recession. After all, a deep recession combined with sharp job losses can be expected to have that effect.
But he was surprised to find that incomes have fallen even more sharply in the weak recovery period that followed the recession, even as the massive job cuts slowed.
He suspects that’s because some people held onto their jobs but saw their hours or wages cut, while others, after long periods of unemployment, were forced to take jobs that paid less than their previous positions.
Taken together, he said the median income decline from December 2007 to June 2011 "represents a significant reduction in the American standard of living.”
Even the relatively low rate of inflation that has characterized the past few years can start to add up if your income is not rising.
"Even if there’s 2 percent inflation, if they don’t get any raise that’s a 2 percent real wage drop,” Shierholz said. “That happens for a couple years, and that starts adding up to a serious decline of what you can buy with your paycheck.”
The outlook for the future remains uncertain. Diane Swonk, chief economist with Mesirow Financial, said one major problem is that even as companies start hiring again, there aren’t good systems in place to train people for work that requires skills but not a college degree. Those skilled labor jobs traditionally have represented a strong path to get into — or stay in — the middle class.
And even a college degree isn’t necessarily the guarantee of a comfortable salary that it once was.
And despite the November surprise of a sharp drop in unemployment, it could be years before enough jobs are added to bring the rate down to historical norms of 4 to 6 percent.
“Unfortunately, if there was a silver bullet to be shot it would have already been shot,” Swonk said. “We’re going to have to struggle through this time and adjust, and it’s a painful adjustment.”
Green saw a glimmer of hope in recent data that showed a slight increase in household median income to $50,257 as of September. But he said it’s too early to tell whether that’s a sign of better times, or just a fluke in the data.
To see what it’s like to literally be in the middle of the nation’s income spectrum, Life Inc. is hitting the road this week to profile Americans from all walks of life whose household income is around $50,000 a year.
We’ll be posting their profiles here and sharing our thoughts — and yours — on Twitter, Facebook and Google Plus. We also invite you to comment on our posts — but keep it civil and on topic, please!
Finally, please share your story of what it’s like to be living on about $50,000 a year here. We’ll feature some of your stories in future Life Inc. posts.
Related:
Poverty rate hits 18-year high as median income falls
Employment growth picked up speed in November
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My husband & I did very well on about 35-40 grand/yr. 'til I was downsized out of a job I'd had for 18 yr. a couple yr. ago. Luckily I paid off the mortgage before this happened, so we still do well with the intermittant part-time employment & unemployment compensation I've had & my husband's income. We live in one of those less expensive midwestern states & are frugal. 50 thou/yr. would be a princely sum I'd love to have. What gives me trepidation is that my husband is going to retire in a few months & I will lose my health insurance that I get through his employment. I have several medical conditions that require daily meds. I can stay insured if I pay $800-$1000/month, which is more than my earnings. I can deplete our resources that I've spent a lifetime in frugal living to accumulate, then maybe some day I may qualify for Medicaid if I can get through a lengthy application/supplication process, if I'm deemed disabled enough. Or I can forego my meds & treatment altogether until I do become a disabled basket case. All this or any part of this may be possible unless I find a job soon with health insurance. A reliable job with benefits seems to be a rarity these days. As I see it, health care & health insurance are obscenely expensive wherever a person lives. It just galls me to think that I could work, be sensible & frugal for the past 35 yr. of my adult life & the cost of health care could bring me down!
If I could make 50k a year I would sleep alot better a night , although I still manage to keep a roof over my head and food on the table even if its mac & cheese and pay my bills . Where I'll be in a week from now who nows. The only thing I can say is I lived at the end of the Great Depression and one thing my parents values instilled in me was don't live beyond your means . It's tough but will all make it , you must have a set of values to live by . Going out for dinner , I wish , I haven't been in a reaturaunt for 8 yrs , because I can't afford it . 23,000k a year doesn't leave much . How about calling in all the loans and help we give to other countries when needed , I don,t see them rushing to help us in a time of need , and some of the salaries actors ,pro-athletes, government employees and such is just rediculous , 14 million for throwing a football for 2 yrs . Come on people how bout are boys in law enforcement and the military that keep us safe everyday . Don't beleive it go to another country and try to live the same life as you do here in the U.S.A. you'll be dead in a few weeks . Sorry to be so frank but its the truth . Be glad for what you have cause it can get worse . God Bless all of us and do the best you can and make every day count .
This reminds me of a part in "Sense and Sensibility," where the evil daughter in law was coming up with reasons why her mother in law should survive on very little money: 500 pounds a year? What on earth can four women
want for more than that? Their
housekeeping will be nothing at all
they will have no carriage, no horses,
hardly any servants and will keep no
company. Only conceive how comfortable
they will be!
I would love to make $50k !!! I am a single white female living in the DC Metropolitan area and I make $32k but am forced to have a roommate because I can afford rent by myself. So in order to adjust to the times. My rent, utlilities & food are spilt 50/50 with my roommate ... which helps leave some extra money in my pocket but not much :|
To the person who said they were unable to get student aid with a family income of 50 thousand - we were just through this with our daughter, who went to a very good college. From my research on the subject, many of the "name" schools will give a full scholarship to students whose families earn less than 60 thousand a year. My beef with this is that it punishes a two income family, who might earn just over 60 thousand. These days, there are precious few merit scholarships, as most are based on need. In other words, if your kids are going off to college, expect a windfall if the total family income is under 60 thousand, and if it's more, plan on being in debt. This seems so unfair to me. When my kid was applying to schools, I realized that her generous scholarship had nothing to do with her straight A average, but rather, the fact that I was unemployed. Ironically, as a family, we were "rewarded" for my unemployment. Meanwhile, my daughter received the same amount of money as many students with less stellar records. What's just as unfair is the fact that any money you have earmarked for school is subtracted from how much scholarship money your kid will get. Again, people are rewarded for not saving up, which makes no sense, does it? Ironically, we received more money because of our family income than what I might have earned in those years. Though the system happened to work in our favor, it is so unfair to kids with excellent records whose parents make more than 60 thousand. Above all, I believe students should be rewarded for merit, not relative poverty.
As one commenter pointed out, even those of us struggling are still in the top one percent of the world. It's worth remembering. I may drive an old car, a 2003 civic, and the bank and I own our house for which we have a hard time paying for repairs, But we have clean water, semi-reasonable health insurance, and so on. Maybe some of us should save our pennies for a trip to a third world country. It's an eye opener. We are pretty spoiled in the US, and it feels even worse because of the rising cost of everything, while incomes are not going up. Globalization has made things worse, of course, as a company is more inclined to pay somebody in India a paltry salary with no benefits than pay an American far more with benefits.
Krestov said of landing a job, "being older should be no problem at all." Are you kidding? You know how much age discrimination there is out there?
My family survives on $32,000 a year. And that's a helluva lot more than many people in Las Vegas make. I know a few hourly wage earners who earn more, a lot more, at the best casinos here but they seem to spend it faster than they get it. Income beyond a prudent "point of survival" puts a person into the "it ain't what you earn, it's what you spend it on" category. Oh, yes, I pay 15% of my income in income taxes (not counting the payroll taxes), some of my monthly fixed expenses are $700 in health insurance premiums, $1,000 in car insurance, and $800 in house payment. After paying for prescription medications, gasoline (we drive 4,000 miles a year), there isn't much left for food and other necessities, and nothing for fun and games--I know people who live better on welfare programs.
However, going on welfare seems to be a non-starter for us. Once a person has worked and paid taxes he pretty much eliminates himself from getting welfare assistance. If one never works, he/she is automatically eligible for government stipends (these are the takers). Those who work are the givers. Once you are classified as a giver, you disqualify yourself from ever being a taker-- gotta pay for those government programs.
A lot of self righteous posts on here. Just because you may get by on a certain income, doesn't mean the next guy can. People have different circumstances. I work 50 hours a week for about 32k a year. I have 3 children. No cable, no new vehicle, haven't bought myself a pair of shoes in three years. I live on this money and fall further behind each week. No food stamps (my paystub showed earnings of about $2 over eligibility). I cut expenses in every way possible and still fall behind. Are the poor lazy??? I'm not. I very much doubt that anyone making 6 figures worked as hard as I did this week. Do i feel i deserve anything special?? no. Do i feel cheated by those on top of the economic food chain?? yes. parasites. It would be nice to be compensated anywhere close to the money i actually make for my company. Instead some corporate fat cat gets bonuses as they save money by cutting out company christmas parties or safety incentive programs. Elsewhere another pencil pusher lives comfortable because he spent the week writing up some bogus new HR policy (if he even bothered to do that much) which generally makes life miserable for those working for them. The lazy ones are at the top, sitting at a desk until 2:30-3:00 (time for the rich to think about calling it a day) while the rest of us bust our butts actually doing the job. To those of you who live their life comfortably at the expense of others, look around from your lofty position. Can you see hell from there??
50k a year....not bad..but my friend and his live in girlfriend bring home 72k on welfare and food stamps and dependant children..etc. and they don't even work. What a messed up country.
Go live in Mumbai and you'll be a slumlord millionaire with just $50k. but u be content having a sewer as your backyard swimming pool, eat fly-infested kabob, and enjoy the symphony of rain hitting aluminum roofing during stormy days. Oh, and the the public restrooms.... just don't fall into the hole.
Please, give me $50K a year to live on! When I retired I made the decision to live on $1000 per month....it means I have to keep a small garden going, it means turning off lights/radios/tvs when not in the room and setting the water heater on "barely warm" and many other "electric saving" moves, a lot less driving due to the $3.27+++ gasoline, no dining out, mowing my own lawn, getting only basic cable and no home phone.....it's tight and sometimes I have to go without medical insurance for a few months at a time to make out...but, darn, give ME $50K to live on....maybe we have all learned to live BEYOND our means and need to reassess our spending.....at some time, people, we had to know wages could not continue to climb and climb (like house prices did) and the bubble would burst...I'll take $50K a year and be real happy!
I would bet it's more than 75% of households that are below $50,000/year. With separation of class being as high as it is. The people who bring in $20,000/year don't bring the average down very much. But someone who makes $20million will bring the average up a lot.
"After adjusting for inflation, the nation's median income has fallen about 7 percent from its peak in 1999, reversing a fairly steady increase that lasted for five decades from 1950, according to Census Bureau figures."
This is a totally ignorant statement repeated as a mantra by every "economic" journalist overwhelmed by numbers -- and their meaning.
A median is just and always the median -- and not a measurement against an absolute standard that continues to rise no matter what. When the economy is down -- so are the incomes, as well as the prices -- and so the numbers self-adjust for everyone -- and that is the standard, and not what the median would be (or is supposed to be) compared to 1999 -- as a base of what it should have risen to in 2012.
those are the bogus ploys used by the unions in confusing the government negotiators and mediators, but shouldn't be accepted as though it meant anything by the countless journalists wgi actually do their own thinking about these things.
Just think about what you are saying -- and don't mindlessly repeat what the union bosses tell one should chant.
My husband & I make combined $22,000 a year.
In IL I make $9.25 an hour with at least $200 per paycheck going to taxes.
I disagree with the people who say the median-low income earners don't pay taxes.
We pay less taxes because we make way less money:
We can barely get my husband through his masters at a public university even though we have no debt, no student loans & no car payments because the taxes take half of our paychecks!
MEDICAL BILLS are killing US-PERIOD.
Hello.
I am a single mother and I am doing the honest thing by working to support my child. I work 8 hr days and go to school full time.
I do make an income but after taxes, bills, and toiletries i have an overdrafted account.
Can someone please tell me why us hard workers who are honest and do everything in their power to support their children get thrown to the side and cant even get assistance for food? My son is three and this is the first time i am asking for any kind of assistance. They take your GROSS pay for the YEAR and that determines if you get assistance. Im sorry but who actually sees that? Ok let me just wait until income tax time to buy my son food, clothes, and soaps, and fever meds. I mean does that seem reasonable?! I dont think so.
oh by the way they dont even factor in your bills unless you meet the financial requirements! wow