Where the poor and rich really spend their money

by Max Ehrenfreund

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.
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The survey provides no evidence that the poor are wasting their money on delicacies. Indeed, the results show that regardless of income, Americans make very similar choices at the grocery store. The wealthy spend more overall, of course, and less as a share of their total spending. Yet the rich, the poor and the middle class all spend about 19 percent their grocery budget on fruits and vegetables, about 22 percent on meats, and about 13 percent on breads and cereals.
Other categories of food also show no variation with income. What about that lobster? Fish and seafood account for between 3 percent and 4 percent of the grocery budget for all groups – $80 per year for the poor, and $222 per year for the wealthiest group.”

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