Last month I made a claim that one of the reasons the GINI coefficient, a measure of the disparity in income, is not telling the whole picture in America is that it doesn’t reflect the true concept of households. I made the case that:
For example, you could take 4 people with incomes described as:
The Gini coefficient for the above data is .24162
Now, marry two of those wage earners:
The Gini coefficient for THAT data is .301676. Without ANY income changing at all, the Gini increases by 25%. In other words, the same number of people are working the same number of jobs and earning the same number of dollars. The only difference is the method by which they calculate the Gini.
Nickgb over at Poison Your Mind called shenanigans.
You are taking a nation-wide economic statistic, applying it to a population of four, then three, and drawing conclusions as to its usefulness?
Certainly my math was simple. It consisted of a population of 4 individuals. Clearly this was just a demonstration of what could or might occur in a larger group.
However, since then, we have learned that a record number of Americans are unmarried:
Barely half of all adults in the United States—a record low—are currently married, and the median age at first marriage has never been higher for brides (26.5 years) and grooms (28.7), according to a new Pew Research Center analysis of U.S. Census data.
In 1960, 72% of all adults ages 18 and older were married; today just 51% are. If current trends continue, the share of adults who are currently married will drop to below half within a few years. Other adult living arrangements—including cohabitation, single-person households and single parenthood—have all grown more prevalent in recent decades.
Certainly there is nothing wrong with people deciding that they would rather enjoy life’s treasures as a single person rather than a married person, but it is also true that when measuring household income using the GINI coefficient, a drop in marriage rate of 33% will impact the results.