America learned late last week that Sen. Bernie Sanders (I-Vt.) would soon release tax returns that showed his income topping $1 million after his 2016 presidential run. During the 2016 campaign, cobbling together various assets Sanders and his wife owned, Money magazine estimated that Sanders was worth more than a million. But now, this week, we see that his income topped that value.
Finding a millionaire in Congress is like finding a red baseball hat at a rally for President Trump. There’s a lot of concentrated wealth on Capitol Hill, and not just in the coffers of the federal government. But most members of Congress aren’t both rich and railing against the rich, largely because most members of Congress aren’t railing against the rich. So, an undercurrent of reporting this week suggested, isn’t Sanders a hypocrite?
That’s in the eye of the beholder. But it’s worth noting that conflating “millionaire” with “rich” is an increasingly iffy proposition. Not because $1 million isn’t a lot of money, of course — but because it’s very much on the low end of U.S. wealth these days.
We can lift an immediate example from the first Austin Powers movie. Dr. Evil has been frozen for a few decades and doesn’t realize that asking for a million-dollar ransom isn’t much of a disincentive.
Inflation means that the value of money changes over time. You’ve seen old ads where a Coke costs a nickel or whatever. Over time, prices and incomes rose, and now a can of soda costs more than a dollar. Same product, mostly, and much more expensive than it once was but still relatively inexpensive. Put another way, today’s dollar is 1930′s nickel.
We can take inflation into account and describe precisely how the value of the dollar has changed. If you had $1 million in 1930, that would be worth about $15 million today. The value of $1 million at that point was equivalent to the value we see in $15 million today. As recently as 1950, $1 million had 10 times the value that it does today.
In 1967, the year Dr. Evil was theoretically frozen, $1 million was worth what $7.5 million would be worth today.
There are all sorts of other ways in which “a million dollars” has eroded as a mark of staggering wealth. Median household incomes in the United States topped $60,000 in 2017. Very few Americans make $1 million a year, but Americans are closer than they used to be to making that.
In fact, IRS data shows the growth in the number of millionaires over time (even breaking out the number of returns with million-dollar incomes by gender for a while). In 1969, there were fewer than 1,000 people with $1 million incomes. In 2008, there were more than 235,000.
We’re using two metrics here, income and net worth. If we consider the latter (as Money did in 2016), finding “millionaires” becomes a lot easier.
Net worth includes homeownership, for example. The median sales price of a new home was about $17,000 in early 1963. In February of this year, it was over $315,000. That gets you a third of the way to a million by itself.
When Money published that report a few years ago, we noted then that the value of $1 million isn’t what it used to be. To illustrate that, we looked at data from the New York Times’s archives (which used to be readily searchable for specific terms).
In the first 25 years of the 20th century, the Times mentioned billionaires 187 times — and millionaires 6,621 times. Millionaires were real, a mark of wealth in the gilded age. Billionaires were mostly science fiction. (John D. Rockefeller became the first billionaire in the country about a century ago.) From 1990 to 2015, the Times wrote about millionaires 7,221 times — and billionaires more than twice as much.
No one reading this is going to turn his or her nose up at $1 million. But I suspect we could also figure out a way to spend that much money in relatively short order. “Rich” is in the eye of the beholder, but it’s probably safe to say that not all people worth $1 million are really rich. When we talk about rich people — when Sanders talks about rich people — it’s safe to assume that we’re not really talking about people like him.
Even after learning he is a millionaire.