A fascinating article appeared in the New York Times a couple days ago about the bias people tend to have when it comes to beliefs about their own economic standing in relation to the rest of society. It seems a trio of researchers found that Argentinians tend to view their personal economic classifications in much the same way people in the United States do: Everyone believes they are middle class.
The bias works differently depending on one’s income bracket, apparently: “Poor people consistently overestimated their rank, and rich people consistently underestimated their rank.”
According to the article, “Respondents were eventually informed about whether their own rankings estimates were too high or too low. This news changed people’s policy attitudes. People who thought they were relatively richer than they actually were started to demand higher levels of income redistribution when told they were actually relatively poor. After all, learning that they were poorer than they had believed also meant they’d be more likely to benefit from redistributive policies than they originally believed.”
This got me wondering what income distribution actually looks like in the San Francisco Bay Area, and how people view themselves within that spectrum. I went to the U.S. Bureau of Labor Statistics (BLS) to find the most recently available data for earners in this designated metropolitan area, which includes San Francisco, Oakland, and Fremont.
The data was from May of 2009. Taking into account all occupations and nearly 2 million earners, the mean annual wage was $58,250. That’s the number in the exact middle, but most earners were in employment categories which made less than that on average.
To better understand how it breaks down, I scrolled through the various employment categories. The data showed that around 6.8 percent of all earners worked in management — the bosses of all stripes — making an average of $126,260 per year. People working in the computer and mathematical science sector, such as programmers or database administrators, made an average of $91,440 a year, representing about 4.3 percent of all earners. The accountants, budget analysts, and others in business and financial occupations accounted for about 6.8 percent, earning an average of $84,330 per year.
Meanwhile, around 59 percent worked in employment categories with average earnings of less than $58,250. That’s not to say every single one of those earners made less than that — police officers, for example, registered at an average of $79,080 annually, while their “protective services” employment category had an annual average of $52,260. But it does suggest that at the end of the day, quite a few people fell below that middle income line.
The greatest areas of employment by far were office and administrative support services (around 16 percent of all earners; bringing in an average of $41,670 annually), sales (nearly 10 percent; earning an average of $45,860 annually), and food service (around 8.4 percent; earning an average of $23,740 annually).
People working in education, a category that includes teachers and instructors as well as librarians and curators, had median incomes that very closely reflected the exact middle — $58,880. That category made up around 6 percent of all earners.
Of course, there are flaws in any data set, it can only really reveal so much, and even this one was titled “wage estimates.” A study of San Francisco by itself would likely portray a different picture, with a higher mean annual wage. There are outliers, like Pacific Gas & Electric Co. CEO Peter Darbee, who made more than $10 million in 2009. And all of this should be considered in the context of an official 9 percent unemployment rate for San Francisco (actual unemployment rates tend to be higher than official estimates).
On a broader scale, we also know that 1 percent of the nation’s population takes nearly a quarter of the wealth.
The research cited in the NYT article offered this theory about why people are tend to be biased about where they stand: “If you’re mostly exposed to people earning about as much as you, you’re likely to think your earnings are average.”