A Gallup poll conducted 2-5 April among 1008 American adults reveals that many entertain financial concerns. The respondents were asked whether they were ‘Very worried’, ‘Moderately worried’, ‘Not too worried’, or ‘Not worried at all’ with respect to eight potential financial problems:
- Not having enough money for retirement
- Not being able to pay medical costs of a serious illness/accident
- Not being able to maintain the standard of living you enjoy
- Not being able to pay medical costs for normal healthcare
- Not having enough money to pay for your children's college
- Not having enough to pay your normal monthly bills
- Not being able to pay your rent, mortgage or other housing costs
- Not being able to make the minimum payments on your credit cards
The most interesting results were correlated with a variable entitled ‘Income’. As there was a previous table by ‘Household income’ with corresponding ranges, my suspicion is that the one that interests me was also by ‘Household income’. But this begs a great many questions. For example, I would want to know whether it is gross household income, net household income, household disposable income, or one of the other possible measures. I’d like to know whether it incorporates in kind receipts, or just cash. If the former, how are cash values imputed to the in kind receipts? Always a concern is the basis for collecting income from unincorporated household enterprises, which are in principle collected net of expenses, with all that that entails in terms of padding and so forth. More importantly, is it ‘Total household income’ or ‘Equivalised household income’? After all, an income of $50,000 has quite a different meaning for a household of ten persons than it does for a lone person household. And if it is equivalised, what were the equivalising factors and on what basis were they arrived at?
Not that equivalisation captures everything we’d want to if we were going to use income as a measure of ‘economic wellbeing’ or something, to correlate with other factors. For example, even quite a high household income can correlate with a low standard of living if the household has responsibilities like care of a disabled child or a crippling divorce settlement.
In all probability, however, nobody ever even thought about asking any of these questions. Some kid just rang up and asked, ‘What’s your household income?’ And the respondent provided a more or less honest and more or less accurate answer depending on their mood and attitude to telephone surveys and other factors that are hard to control.
Even so, additional questions arise. The population in scope of the survey was persons aged 18 and over. Is it really plausible that most 18 year olds can accurately assess the total income of their parents? Would they have any knowledge of receipts from rental properties, shares, and other forms of investment, even if they knew their parents’ actual salaries? Would they even know their own income on an annual basis, considering that they are probably working more than one job, each with variable hours from one week to the next?
Bearing these reservations in mind,
Somewhat less surprisingly, there was a clear and consistent correlation between ‘Income’ and financial worry. Lydia Saad, the author of the report, even remarks
Adults living in low-income households are also about twice as likely as those living in high income households to worry about maintaining their standard of living (59% vs. 28%) and paying normal healthcare costs (50% vs. 21%).
For every category of worry, fewer of the highest income group were worried than of the middle income group. And for every issue save ‘children’s college’, more of the lowest income group were worried than of the middle group. I surmise that the lowest income group may include a larger proportion of retirees whose children are past university age. Furthermore, households in this income bracket are almost certainly less likely to consider tertiary education a realistic possibility for their children.
One of the things that’s always preyed on my mind was this feeling that there must be a correlation between financial worries and financial resources. And now I have the