Monday, 20 July 2009

Poor or rich enough - Is Your Income Enough for You?

Is the money you earn enough for you? – Somewhat quasi-scientifically, I’ve been asking this question from people I meet. They don’t have to disclose the income, but just answer if they are satisfied with their income. The hundreds (over 500) of people I’ve talked to, from all income levels, age groups, professions and ethnicities, both men and women; have generally said “It’s never enough. I could do with more.” What does this tell about humans?

Just a few (5%) have said that “Yes, I earn more than I need. Actually I don’t need all this.”

Now I wonder which is more surprising - the shortage of people happy with what they earn or that there are even this many?

Photo source: Wikimedia commons

How High is Your Income?

The median annual family income in USA is around 46 000 US $. This is only 5,02 cms of US $ 100 bills.

The richest American, Bill Gates, with around $ 50 Billion (now that he’s poorer due to the recession) would reach a height of over 50 km if he piled his wealth in 100$ bills. It is impossible for him to convert his wealth into banknotes as there are only 2 billion US$ bills in circulation. The US Treasury wouldn’t be too eager to print more for him as printing a new $ bill costs $8.02.

Mr Bill Gates could probably reach the moon if he piled his wealth using Zimbabwean dollars.

You can calculate the height of your annual income easily.

  • First convert your annual income to US dollars. One US dollar bill is 0.010922 cm thick. 
  • Then calculate how many 100 US dollar bills (use 1 US dollar bills if you are in teaching, taking care of the sick and the old or are a writer in India or Namibia) you get per year 
  • Multiply that amount by 0.010922 cm to get your annual income height in cms.

Earning More than Others is Important

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Rather than the actual earning, the relative earning or comparative spending power is more important for many people, especially younger and ambitious men. In societies like the USA, raw money power is measured by conspicuous consumption. This trend has spread to former Eastern Block countries including China.

In societies, like the Scandinavian welfare societies, where incomes are more evenly distributed, people compare their incomes less with their neighbours. But they compare instead with history.
“I earn much more than my father.” or “My grandfather could never have afforded what I can.” are often typical sentiments.
Economists measure inequality among people in societies with measures like the Gini, Theil and Hoover Index (also called the Robin Hood index). Hoover Index measures the total community income that would have to be taken from the richer half of the population and given to the poorer half so that perfect equality is achieved.

Women Complain About Earning Less

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Women in Western democracies persistently complain that they earn less than men.

Is that a fact?

The research findings of the Institute of Economic Affairs, a UK free market think tank since 1955, are startling:
  • Women’s mean part-time earnings are now higher than those of male part-timers.
  • 22-29 year old women earn only 1% less than men
  • Men tend to work longer hours and put in more overtime, with twice as many male as female managers working more than 48 hours a week.
  • Typically men seek higher pay and career success and women seek job satisfaction.
  • 75% of women plan to take a career break against 12% of men.
  • Men lose their jobs more often and get injured more often at work.

Yet another research finding discloses that in USA, female graduates earn $8,000 less than men per year a year after graduating. Men earned $42,918, women earned $35,296 in 2009.

Famous Quotes About Income

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“When there is an income tax, the just man will pay more and the unjust less on the same amount of income.” Plato, Greek Philosopher (428 – 348 B.C.)
“Expenditure rises to meet income.” C. Northcote Parkinson (English writer 1909-1993)
“Good management is better than good income.” Portuguese proverb. 
“Between persons of equal income there is no social distinction except the distinction of merit. Money is nothing: character, conduct, and capacity are everything. There would be great people and ordinary people and little people, but the great would always be those who had done great things, and never the idiots whose mothers had spoiled them and whose fathers had left them a hundred thousand a year; and the little would be persons of small minds and mean characters, and not poor persons who had never had a chance. That is why idiots are always in favour of inequality of income (their only chance of eminence), and the really great in favour of equality.” George Bernard Shaw (1856-1950). Irish playwright and 1925 Nobelist.


Amalia said...

Nice post. I can imagine people having difficulties coping with what they earn. Our spending tends to grow evenif we can't afford it.

Gayatri Shenoy said...

Well written. Really liked ur blog. No matter how much we have - it just ain't enough. Satisfaction and contentment is the key to all problems.

ASWANI said...

No its not enough for me. I want to earn more and I am very confident about it. Great post !

Anonymous said...

Oh no. I want to be earning more. Not zillions but a bit more so that I can make better choices. Good points here.