Bump in US Incomes NYT Article Review

The 2007 recession led to the decline of many household incomes. However, as Cohen (2017) points out, the last two years have seen household incomes grow, with the number of Americans in gainful employment having increased in 2016. Despite this, many Americans, as the author observes, still feel left behind; with one of the underlying reasons being sustained decline in lifetime earnings from the late 1960s – with young men ending up with less than their older counterparts “because they started earning less than their counterparts in previous years, and saw little growth in their early years” (Cohen, 2017). On the basis of the information presented in this article, the relevance of advancing education cannot be overstated. This is more so the case given that if history is anything to go by, then lower levels of education are becoming obsolete as we head into the future. In essence I am training to be an accountant, whose occupation code as listed in the Bureau of Labor Statistics website is 13-2011.

Saving for retirement is something that one ought to take seriously. If the median income keeps decreasing from one generation to the other, then it means that the current generation has to save more than the proceeding generation. How much money one should set aside for retirement could be influenced by a wide range of factors. In my case, I would desire to retain approximately 60% of my annual income after I retire. With the annual mean wage of people in my profession being $76,730, this means that on retirement, I would expect to retain $46,038 per annum via social security and savings on retiring. Given that I would expect to make less in terms of lifetime income in comparison to the previous generation, I would seek to set aside a higher sum in a retirement account that happens to be tax-deferred. The generation that comes after me would have to set aside an even higher sum.

To raise my potential income, I would have to ensure that I enter the workforce with a higher wage. This I could do by ensuring that I have better qualifications than others competing for the same position. In the article, Ron Haskins points out that “you have to have better skills and more knowledge to make $60,000 to 80,000 a year now than in the past” (Cohen, 2017). In addition to undergraduate qualifications, I could seek to attain a postgraduate qualification before taking my first job. This is more so the case given that a decade ago, a high school graduate commanded a higher entry salary than today’s high school graduate. If the trend continues, a decade from now, an individual with undergraduate qualifications will likely get a lower starting salary than an individual with similar qualifications today.

Further, still in seeking to raise my potential income, I could pursue specific careers that are related to my profession, but are better paying. A good example of this would be to become a Personal Financial Advisor. While accountants and auditors, as I have already pointed out above, have an annual mean wage of $76,730, personal financial advisors have an annual mean wage of $123,100. This represents a difference of $46,370. In essence, the two occupations share qualifications - with a few variations here and there relating to licensure, etc. In the final analysis, Patricia Cohen’s article is not only informative but also educative in the sense that it presents to the reader bare facts relating to the realities of income disparities and the need to formulate a better and more informed retirement and savings plan.



References
Cohen, P. (2017). Bump in US Incomes Doesn’t Erase 50 Years of Pain. Retrieved from
https://www.nytimes.com/2017/09/16/business/economy/bump-in-us-incomes-doesnt-erase-50-years-of-pain.html