The Vast Disposable Income Disparity Between the Rich and Poor

After paying for essentials, the very poorest Americans are left with just a $1 a day.

Your money - where does it all go?

Depends on how much there is. For those making $16,000 a year, more than half of it goes to housing and utilities. But those making $160,000 a year still have almost two thirds of their disposable income left over after those monthly bills.

Planet Money graphs one of our favorite topics: How families spend money. Here are their numbers rendered slightly differently:

The results aren't so surprising: Poor people spend more of their money on essentials than richer people (and these numbers don't account for dramatic geographical differences). But how much is left over?

After essentials - housing, transportation (incl. gas), food, utilities, and clothes - the poor have 15 percent of their disposable income left over, and the $10K+ crowd has about 40 percent. This next graph uses those figures to tell how much disposable income a typical person making $17,500, $60,000 or $150,000 has left, after the essentials are taken care of:

This graph doesn't include a few categories you might argue are essential: food at restaurants (which is somewhere between elective and essential), health care (which is essential, but spiky) and education (which is practically essential, but specific to certain years). After those categories, the poorest group has spent 98 percent of their income, leaving them with $367 for the year - or a dollar per day.

This post originally appeared on The Atlantic.

About the Author

  • Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.