Someone needs to tell me why this news about discretionary income isn't as significant as I believe it is.
But first, three warnings:
1. I'm not about to spend the $250 needed to read the full report from the Conference Board that backs the story (their "about" page is here).
2. I don't feel totally comfortable with how the statistic is measured -- "Households with discretionary income, as defined by the study, are those whose spendable income exceeds that held by households with similar demographic features."
3. I don't feel totally comfortable that the statistic has been measured consistently.
Now with the disclaimers out of the way, here's the stunning news: More Americans have "money to burn," technically known as "discretionary income," than at any time in the past quarter-century, and perhaps in the country's history.
A lot more. A whole lot more.
So many more that I went as far back as I could for comparable stats.
Here is what I found:
- San Francisco Chronicle; December 18, 1985 (from ProQuest library database) -- (Headline) "One-Third of U.S. Households/Americans With 'Extra' Cash." The article doesn't say what year the study by the U.S. Census Bureau and the Conference Board looked at. Let's assume it was 1983.
- Wall Street Journal; June 1, 1989 (from ProQuest library database) -- "Only about 30% of American households have extra money to spend after paying taxes and buying the necessities, according to a report released by the U.S. Census Bureau and the Conference Board." This report referred to a 1987 Census Bureau/Conference Board report.
- A reference to an early 2005 Conference Board Report that appears to relate to 2003 and/or 2004, saying, "About 57 million U.S. households now have discretionary income, up from nearly 54 million in 1997-1998, according to a new study released today by The Conference Board. But the percentage of the American population with discretionary income has edged down to 51 percent, compared with 52 percent six years ago."
- Finally, from the Conference Board earlier this week -- "Between 2002 and 2006, the percentage of U.S. households with discretionary income increased from 52.1 percent (57 million households) to 63.5 percent (73 million households)."
Summarizing, here is the progression of Americans with discretionary income:
-- 1983 - 33%
-- 1987 - 30%
-- 1997/1998 - 52%
-- 2002 - 52.1%
-- 2003/2004 - 51%
-- 2006 - 63.5%
In everyday language, this means that about 12% of the population went from just getting by to having money to spare in a span of two or three years.
Again, someone needs to tell me why this news isn't as significant, or as remarkable, as it appears.
You might think that in the non-stop Old Media hype about how the alleged crises in housing, mortgage lending, currency strength, and who knows what else, that good news like this might be welcome, if only as a change of pace.
As has been the case almost non-stop for almost 7 years, you would be wrong.
It's no longer anything resembling a surprise that there's nothing about this at the New York Times (search is on "conference board"). But here's the result of a Google News search done this morning on ["conference board" discretionary income], typed exactly as indicated:
To be sure, the same search of the web in Google yields a few more results, including this one in the International Herald Tribune. But the half-dozen or so stories on this topic pale in comparison to the over 1,100 found in a Google News Search last night on "recession housing" (not in quotes):
So if you're wondering how so many people are coming up with the money for all manner of iPods, monthly video game subscriptions, and scalped Hannah Montana tickets, there's probably a very simple answer: They have it.
Old Media would prefer that you not know that.
Cross-posted at BizzyBlog.com.