Who Are the Rich and Poor?
Labeling the rich and the poor is not straightforward. Distributions of income, earnings, and wealth–the major indicators of economic status–are correlated but do not mirror one another. According to a research paper published by the Federal Reserve Bank of Minneapolis, age is one of the principal factors in determining a person’s earnings, wealth, and income relative to others in the income distribution.[2] In this paper, earnings include wages, salaries, and most business income; wealth is net worth, including financial and real assets, savings, and income from investments; and income is all before-tax revenue, including transfers.[3] The average age of those in the bottom 20 percent of the earnings distribution (or bottom quintile) is 66.4 years, suggesting that many in this quintile are retired. Similarly, in the bottom quintile of income, the average age is 52.8 years, old enough to indicate that many are retired, which affects the quintile’s average income and hours worked per
