Where the Poor and Rich Really Spend Their Money

Where the Poor and Rich Really Spend Their Money

In this Sept. 24, 2013 file photo, a sheet of uncut $100 bills is inspected during the printing process at the Bureau of Engraving and Printing Western Currency Facility in Fort Worth, Texas. Nobody knows when exactly, but the day will eventually come when the Federal Reserve nudges its benchmark lending rate from next to zero to something slightly higher. But that doesn’t mean the era of incredibly low interest rates will be over. (AP Photo/LM Otero, File)
In this Sept. 24, 2013 file photo, a sheet of uncut $100 bills is inspected during the printing process at the Bureau of Engraving and Printing Western Currency Facility in Fort Worth, Texas. (AP Photo/LM Otero)

 

(The Washington Post) – Lawmakers in several states are urging limits on how welfare recipients use public benefits, suggesting that the poor are buying things like lobster, filet mignon, vacations aboard cruise ships and visits to psychics. It’s an open question whether the problem these proposals aim to solve actually exists, but the Bureau of Labor Statistics just helpfully released new data on how the poor — and the rich — spend their money.

For the first time, the bureau released this data for ten equally sized classes of U.S. households, sorted by income. While the bureau doesn’t have data on lobster and filet mignon, the survey does provide a fascinating level of detail.

As the chart above shows, the rich spend more in almost every category, because they can. As a percentage of their total incomes, which are larger, the rich generally spend less. The result is that the rich have relatively more to spare after covering essentials such as housing, despite their more extravagant budgets in these categories. The chart below reveals the differences.

One exception was transportation. As a share of total spending, the middle class spent the most on getting around. Biking or walking to work is something that the wealthy and the destitute do. The middle class apparently commutes by car.

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