With a couple of little ones, Sunday night has become my personal “Beyond the Headlines” night. That’s when I try to get through the last few days worth of newspapers in more detail than I can manage to during the week.
So last night, I’m going through the Sunday paper and see Parade magazine (it comes with many a Sunday newspaper). On the front page is their “What People Earn” annual report.
These reports are interesting for a few reasons:
- The data itself is fascinating. See what real people earn by doing jobs you considered (or perhaps never would have considered.)
- Comparisons are inevitable. “I can’t believe a bounty hunter gets paid $74K! That’s more than double what my friend the teacher earns.”
- It’s what we think is important. I have no proof, but I bet that this report is one of the most popular Parade issues of the year (or they wouldn’t keep doing it.) As a society, we really want to know how we’re doing — compared to others.
I get a big kick out of who they choose to include in their list of what people earn. Although the list’s accompanying article and polls focus on “real people,” the list itself does not. Instead, it contains many absurdly non-representative salaries. I just calculated two key data points in their list:
The median salary of those profiled in the “what people earn” list: $55,000
Seems reasonable and likely representative of newspaper readership.
The average salary of those profiled in the “what people earn” list: $34,600,000
Representative of the general population? I think not. The list is stacked, and not just because they included one guy who made $3.5 billion last year. In fact, about one out of every six people on the list earned more than $1,000,000 last year. Consider yourself and five of your closest friends. Any of you make a million last year? How about all of you combined?
Why do I point this out?
Because too many people look at the list and begin to feel inadequate. Look, Parade doesn’t come out and say their list is representative of the country. But, of course, they don’t say it’s not either. Everything around their list (articles, surveys) focuses on the real issues facing real people. But in the one place where people are prone to compare themselves to others, the list is so distorted from reality it is truly counterproductive. This leads to folks chasing a fantasy that is utterly unobtainable.
With solid financial habits, many of us can become millionaires one day. But making a million in a single year? Far less likely.
Your best chance to get a million? Save a bunch of money for a long period time, yet look at the results to this Parade poll question:
Do you save money each pay period, or are you living paycheck to paycheck?
Only 14% said they save a significant amount.
About 49% said they either have nothing left for saving or that they are spending more than they make.
Without changing their habits, these people have no chance to obtain wealth. That’s the key takeaway from the report, not that they can’t because they’re not in Hollywood, the NBA, or Wall Street.
Do you think lists like these are helpful? Would you rather see a truly representative display of what folks make? What about the public profiling of salaries in general?
“personal finance” 
“financial education”
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