Common Cents & Marriage on September 18, 2020

September 18, 2020, by John Norris

Long years ago, I asked a friend of mine from Bombay why arranged marriages were still prevalent in his native culture. While he seemed a little embarrassed by my question, I didn’t let him off the hook because I was genuinely curious. So, he told me simply: “because marriage is too important to be left to love alone.” My initial reaction was twofold: 1) I was certain he didn’t come up with that insightful rationale on the spur of the moment over beers, and; 2) there was, and still is, a lot of truth to it.

Marriage is ideally a lot of things: love, comfort, acceptance, friendship, support, spiritual, and all the other qualities which make up a good Lifetime movie or Nicholas Sparks’ book. However, for the vast majority, marriage is also an economic institution, whether we want to be so base as to admit it or not. Who is going to provide for me in my old age? Who is going to help me raise my children? Who is going to help me put food on the table? Clothes on the back? Roof over the head?

To be sure, marriage isn’t for everybody, for a number of different reasons. Further, not everyone needs someone else to help meet their basic human necessities. As anyone who has ever been married can tell you, dealing with one’s own idiosyncrasies is difficult enough, let alone someone else’s and their expectations of you. Which soap can I use? What’s with all the candles? I am really sorry I can’t see any difference between those identical two white pieces of tile. Just so I know: 1) do you want my honest opinion or my validation, and; 2) do you want my advice or do you need to vent?

I digress. Ha. The bottom line is: marriage isn’t always easy, but it is often better than the alternative. So, with everything going on in the world, why this topic today? Marriage?

Although it was easy to miss since the major media outlets either didn’t cover the story or buried it, the United States Census Bureau released its report on ‘Income and Poverty in the United States: 2019.’ Here are some of the headlines straight from the press release with the table/figure numbers omitted, the Bureau’s words and not mine:

  • Median household income was $68,703 in 2019, an increase of 6.8 percent from the 2018 median of $64,324.
  • The 2019 real median incomes of family households and non-family households increased 7.3 percent and 6.2 percent from their respective 2018 estimates. This is the fifth consecutive annual increase in median household income for family households, and the second consecutive increase for non-family households.
  • The 2019 real median incomes of White, Black, Asian, and Hispanic households all increased from their 2018 medians.
  • Real median household incomes increased for all regions in 2019; 6.8 percent in the Northeast, 4.8 percent in the Midwest, 6.1 percent in the South, and 7.0 percent in the West.
  • The official poverty rate in 2019 was 10.5 percent, down 1.3 percentage points from 11.8 percent in 2018. This is the fifth consecutive annual decline in poverty. Since 2014, the poverty rate has fallen 4.3 percentage points, from 14.8 percent to 10.5 percent.
  • The 2019 poverty rate of 10.5 percent is the lowest rate observed since estimates were initially published in 1959.
  • In 2019, there were 34.0 million people in poverty, approximately 4.2 million fewer people than 2018.
  • Between 2018 and 2019, poverty rates for people under the age of 18 decreased 1.8 percentage points, from 16.2 percent to 14.4 percent. Poverty rates decreased 1.2 percentage points for people aged 18 to 64, from 10.7 percent to 9.4 percent. The poverty rate for people aged 65 and older decreased by 0.9 percentage points, from 9.7 percent to 8.9 percent.

While there is obviously some improvement remaining, this was a good report, and I found it strange it didn’t attract the attention of the media. But I still haven’t answered the question: why marriage?

This week, I started and finished a book entitled World Made by Hand, written by James Howard Kunstler. I won’t mince words: I absolutely loved it, loved it. It is a dystopian work of fiction, in case you like such things. The book’s protagonist is a middle-aged (early 50s) widower named Robert Earle, a former software executive who is now the town’s carpenter and mayor. Towards the back half of the book, he ‘takes in’ a young widow (Britney – early 20s) and her daughter (preschool aged). Although he is initially hesitant, he does so because he needs help managing his life, and she needs both financial and physical support for both her and her daughter. There being very few eligible single people for either in Union Grove, it is a workable economic and practical arrangement. Only later does it become something more than that, much to the delight of middle-aged male readers and the horror for younger female ones. Ha.

So, I was curious: while this relationship makes sense in dystopian fiction, and is intuitive, does the contemporary data make an economic case for marriage? Since I am writing on the subject today, you already know the answer. It does.

In 2019, the Census estimated there were 323.813 million people in the United States. 263.696 million were ‘persons in families,’ and 60.117 million were, drum roll please, ‘persons not in families. There is no better way of describing the data than by showing it. If you are interested in learning more, click on the following. All of the explanatory language is there on the website:

https://www.census.gov/library/publications/2020/demo/p60-270.html

Here is the data from Table B-2, and I apologize the picture’s formatting didn’t ‘paste’ as well as it should have:

 

 

There it is, staring straight at you. 4.6% of Americans living in ‘married-couple families’ were under the poverty threshold in 2019. 18.8% of ‘persons not in families’ were, as were 20.5% of individuals who were families with ‘no spouse present.’ That is a stark difference. The numbers get really ugly when you throw children into the mix. Try on 6.4% for ‘married-couple families,’ and 33.4% for families with ‘no spouse present.’ You can see the other breakdowns as well.

Hey, I am not making this up. The data is what the data is, and it doesn’t seem to be ambiguous. If you are married with no kids, chances are really good you won’t fall into poverty, really good. Heck, there are also really good even if you do have kids. What is the old expression? Two heads are better than one? At least in this case.

On the other side of the coin, the quickest way to poverty in the United States is to be a single mother with small children. Take a look at those stats: 36.5% and 45.7%. This includes all the Murphy Browns out there too. Throw in poorly educated, less than a HS diploma, and there is almost no chance of escaping poverty…if any.

Why isn’t this a bigger topic for debate in our society? Why do we have programs in place which engender the dissolution of the nuclear family when the data is so crystal clear? What is so unpopular and so politically incorrect about discussing the government’s own findings? Get married and reduce your risk of living in poverty. Check. Get married and reduce the risk your children will live in poverty. What’s more, if you go through the tables on the website and do some rudimentary analysis, you can conclude the following: stay in school, wait until you are married before having children, stay married if you can, and greatly reduce the likelihood you will live in poverty…if not virtually eliminate it. The data is all there. Whew.

In the end, hey, being in love is great. As great as it is, as history suggests, as many cultures acknowledge, as the contemporary data supports, marriage has been, is, and will be an economic arrangement as well as a romantic one.

Now, a quick show of hands: who feels sorry for my wife?

 

Take care, and I hope everyone has a great weekend.

John Norris

Chief Economist

 

As always, nothing in this newsletter should be considered or otherwise construed as an offer to buy or sell investment services or securities of any type. Any individual action you might take from reading this newsletter is at your own risk. My opinion, as those of our investment committee, are subject to change without notice. Finally, the opinions expressed herein are not necessarily those of the reset of the associates and/or shareholders of Oakworth Capital Bank or the official position of the company itself.