Author: Crystal Wesnoski

American debt has increased by 200x since 1943

If you’re an adult in America, there’s a good chance that you have debt; the amount of debt you have since you established your first line of credit has probably doubled or tripled. This is a problem that we can all relate to, and I’ll be diving into American debt a little more in this post.

Overall Debt

The average debt that an American holds has increased by 200x since 1943, from ~50 dollars to ~10,300 dollars. However the population includes all individuals, even those who probably don’t hold debt (children and possibly elderly). The chart below accounts for debt holders by visually showing debt per American, debt per adult*, and debt per working adult**. Average working Americans have about $17,500 in debt.

However, these numbers don’t account for inflation either. The next chart below accounts for inflation over the years. The slope of this chart isn’t as steep (thank goodness). And this chart shows that the debt in 2015 is only 16x more than what it was in 1943 (a little better).

 

avg_debt_infla

Mortgage Debt

Mortgage debt is represented in the chart below. You can see how the downturn in 2008 affected the amount of outstanding debt.

avg_mortgage_debt_ages

Student Loans

Student loan debt has been on the rise since the economic downturn in 2008. The average American is holding about $4,200 in student loan debt. This doesn’t account for those who do not hold this debt. Only about 15% of Americans (~50M) hold student debt, and they are also represented in the chart below.

avg_student_loan

 

Comparing Debt Growth

So, based on the charts above, we can see that debt has been on the rise. The chart below shows the cumulative year-over-year growth of debt since 2006 (student loans data only goes back this far). You can see that student loan debt is starting to slow down a bit, auto loans are on the rise, and mortgages are pretty flat.

cum_percent_change_of_debt

 

Data sources:
Federal Reserve provides data on all outstanding debt

Population data can be found on this site

*debt per adult = ages 18+

**debt per working adult = ages 18-62



How do you spend your time?

Time is one of our most valued resources. Below is an analysis on how Americans spend their time. The data was collected from the Bureau of Labor Statistics (BLS) American Time Use Survey.

I wanted to see what Americans typically spend most of their time doing. The plot below shows the top 20 activities recognized by BLS and the amount of time (in hours) an average American spends doing these activities daily. Top 3 activities (sleeping, leisure, and working) consume over 70% of our average day, at least we’re spending some of that time relaxing 🙂

 

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Of course the “average” American isn’t a fair representation of our population. Below the breakout of how much time each day we spend on activities (a little higher level) with respect to age.
It’s quite interesting to see how our time shifts from personal care and leisure to work as we get to our peak working years, which this visualization identifies as ages 25-54. This is pretty intuitive, as anyone who works experiences this first hand, but it’s cool to see the data capture this. Another thing I found interesting, was after the age of 24, time Americans’ spend on education drops off very fast.

 

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The next segment I took a look at was the hours worked on by industry and how this changed over time. The plot below shows the number of hours worked on weekdays by each industry identified by the BLS (except for Farming, forestry, and fishing — this data was incomplete for the entire time series). It’s very interesting to see that people who work in the maintenance & repair, production, transportation, and construction industries put in more hours than the other industries and also have the highest increase in total hours worked over time.

 

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The last segment I looked at was hours worked by earnings. The chart below depicts the hours worked by how much Americans earn (in dollars). The Americans who earned greater than $54,000 (noted by the red line and represent top 25% or the 75th percentile), worked less in 2014 than Americans who earned between $29,000 and $54,000 (noted by the green line and represent the 25th and 75th percentile respectively). Even though this might be intuitive, it’s neat that it’s reflected in the data.

earnings

 

 

Source data link: http://www.bls.gov/tus/tustabs.htm

Percentile data: http://politicalcalculations.blogspot.com/2014/09/what-is-your-income-percentile-ranking.html#.VykXNqMrLdQ



Thousands of Billionaires

Below is an analysis of recorded billionaires in 1996, 2001, and 2014. The data contains 2,615 records of billionaires during these periods and has information on the individual’s net worth, country, industry, age, and whether they were self-made or inherited their wealth.

The first thing I wanted to analyze was the number of billionaires over time and split them by how they came into their wealth (e.g. self-made or inherited). It seems like the number of people who inherited their wealth doubled between 2001 and 2014, and the number of people who created their own wealth tripled between 2001 and 2014.

There are various factors that could contribute to the increase in total billionaires. A couple I could think of are (1) overall global market growth and (2) lower barrier to entry for businesses. I think market growth could help explain the growth of people who inherited their wealth (this sounds very obvious, I know). Marketing growth typically correlates to the Dow Jones Industrial Average. In 2001, the index was at about 10,200 and in 2014 it grew to about 16,500. It’s not quite double, but does validate market growth. As for the second point (lower barrier to entry), resources are more accessible than ever because of the internet and the increase quality of search/online resources. In 2001, only 8.1% of people used the internet and this grew to about 40.7% in 2014 (1). Again, this point is very anecdotal, but helps validate the growing presence of internet.

The next component I wanted to look at was net worth of billionaires over time. The graph below is a box-and-whisker plot (yes, I was actually able to use one in an analysis) of the net worth of the individuals over time.

This plot shows that the variance and the median grow over time. It also shows that 2014 has a long tail, meaning there are a few billionaires that are extraordinarily rich compared to the rest of the billionaire population. 2014 also has a very high density of billionaires that have a net worth of under $2 billion. I thought this was interesting, so I took a deeper dive into the net worth of billionaires in 2014.


Above is a histogram of net worth of billionaires in 2014. This graph shows that over 1/2 of all billionaires in 2014 have a net worth that’s less than $2.5 billion.

The last thing I wanted to take a look at was the industry that created the billionaire. The box-and-whisker below represents net worth by the average top 10 industries in 2014. For the most part, the medians are quite similar across all of the noted industries.

For those who want to explore this data set on their own, I found the data from this data source (note it’s in the zip file).

Cite:

(1) http://www.internetlivestats.com/internet-users/