By The Numbers

Wall Street's Profit Ride

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After-tax profits, in billions
2001$13.2
2002$8.8
2003$19.3
2004$12.5
2005$15
2006$27.3
2007$5.98

After a sharp drop in income post 9-11, profits for member firms of the New York Stock Exchange and National Association of Securities Dealers rose sharply, especially in 2005 and 2006, when the volume of mortgage-backed securities issued by firms soared. Data are from the Securities Industry and Financial Markets Association.


Pay on Wall Street

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Average annual pay, Wall St. worker
2001$250,502
2002$229,739
2003$229,631
2004$274,070
2005$295,106
2006$346,700
2007$405,819

Average annual pay in the securities industry in Manhattan has been volatile in recent years, slumping by more than $20,000 per worker during the post-9-11 recession then rising all the way to more than $400,000 at the height of the recent boom. Expect a steep decline in 2008.


The Rise of Mortgage-Backed Securities

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Issue volume, in billions
1996$493
1997$604
1998$1,143
1999$1,025
2000$684
2001$1,671
2002$2,249
2003$3,071
2004$1,780
2005$1,967
2006$1,989
2007$2,050

Wall Street firms and their clients fell in love with mortgage-backed securities starting in the late 1990s, and although their enthusiasm cooled briefly, it rekindled again in 2002 as low interest rates sparked new demand for mortgages. Data are from the Securities Industry and Financial Markets Association.


Geography of Foreclosure Crisis

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3rd Q. Foreclosures
California27 %
Florida17 %
Rest of U.S.38 %
AR., Ohio, MI., Nevada18 %

Although foreclosure rates are rising around the country, much of the growth in foreclosures nationally is being driven by failing mortgages in just a few states, including several where speculation was heaviest. In the third quarter of 2008, according to a new report by RealtyTrac, California and Florida alone accounted for 44 percent of all mortgages that entered into foreclosure.


Who Really Benefits From Our Tax System

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Percent of filers using tax professionals
198038 %
198545.9 %
199047.9 %
199549.9 %
200057.5 %
200561.2 %

Although both John McCain and Barack Obama want to change our tax laws, neither is making much of a case that we simplify our tax code. According to IRS data cited by the National Taxpayers Union, the growing complexity of the code is responsible for a sharp rise in the percentage of filers seeking professional help with their returns.


Getting Richer, Paying More

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% all US income earned by top 1% of households % all federal taxes paid by top 1% households
19807.7 %14.2 %
198510.6 %14.8 %
199011 %16.2 %
199510.3 %20.1 %
200015.5 %25.5 %
200515.6 %27.6 %

The presidential campaign has sparked debate about whether the rich are paying a fair share of taxes. Above, from a study by the Congressional Budget Office, is the percent of total after-tax income earned and percent of all federal taxes paid by the top 1% of U.S. households. The study includes taxes directly paid by individuals, such as income and payroll taxes (including taxes on dividends and capital gains), as well as estimates of the share of other taxes, such as corporate taxes, borne by each income group based on data on dividends and capital gains on income tax returns. Latest data is from 2005.


Poverty and Work in America

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Reasons for not working
Couldn't find work6 %
Family commitments22 %
Retired20 %
In school25 %
Ill/Disabled27 %

According to the Census Bureau's latest figures, of the 26.3 million Americans 16 years old and over in poverty, 19.5 million did not work last year, or worked only part of the year. Listed above are the most common reasons impoverished adults are not in the workforce, according to Census.


Who Works, Who Doesn't

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No workers One worker Two or more workers
Lowest income quintile60 %35 %5 %
Second income quintile27 %54 %19 %
Middle income quintile17 %41 %42 %
Fourth income quintile5 %28 %67 %
Highest quintile3 %21 %76 %

Recent income data from the U.S. Census Bureau presents selected characteristics of American households by income quintile. One graphic difference among households of different income levels is the number of workers per household. Among low income households, 60 percent include no one working, while among high income households, 76 percent include at least two workers.


Immigration and Assimilation

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Assimilation index
Mexico66
China90
Philippine100
India96
Cuba100
El Savador71
Vietnam99
Dom. Republic84
Korea100
Canada100

As immigration reform remains in the national debate, National Bureau of Economic Research Fellow Jacob L. Vigdor has produced a comprehensive study of assimilation patterns of immigrant groups in America for the Manhattan Institute. Above is the economic assimilation rate of the 10 largest groups of foreign-born residents of the United States, which utilizes information on income, labor-force participation, home ownership and other factors. The higher the index number, the greater the assimilation rate.


Manufacturing Productivity

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Manufacturing Nonmanufacturing
1950s2.1 %2.2 %
1960s2.6 %2.7 %
1970s2.6 %1.7 %
1980s3 %1.6 %
1990s4 %2 %

The presidential campaign has featured debate about where American manufacturing jobs are going. One cause of slower growth in manufacturing jobs, according to a report by the Federal Reserve Bank of Chicago, is higher productivity over the years in manufacturing vs. other sectors of the American economy.


Foreign Investment Boom

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Foreign investments, billions of dollars
1997$69.7
1998$215.3
1999$275
2000$335.6
2001$147.1
2002$54.6
2003$63.6
2004$86.2
2005$91.4
2006$165.6
2007$276.8

After a sharp drop in investment in the United States following 9-11-2001, foreign dollars have been pouring into the United States again in the last two years, according to recently released data by the U.S. Bureau of Economic Analysis. While some of the increase is due to the decline in the dollar, providing bargains for some overseas investors, the rise is also attributable to increases in interest from investors in developing countries like India, who have dramatically increased the capital they are directing to America. BEA numbers include both acquisitions by foreign investors of existing American firms and overseas money invested in start-ups.