Adjusted for Household Size, Real Income Reached an All-Time High in 2007 15 comments
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The Census Bureau just released its annual report that includes real, median household income for 2007 ($50,233). From the report:
Between 2006 and 2007, real median household income rose 1.3%, from $49,568 to $50,233 (see top chart above)—a level not statistically different from the 1999 prerecession income peak ($50,641 in 1999 and $50,557 in 2000). This was the third annual increase in real median household income. Compared with 1967, the first year for which household income statistics are available, real median household income has increased 29.6%.
Comments: A comparison of real median income in 1967 of $38,771 per household to income of $50,233 per household in 2007 (29.6% higher) doesn't take into account the significant 22% decline in average household size over this period, from 3.28 persons per household in 1967 to an all-time low of 2.56 persons per household in 2007 (Census data here for income, here for average household size), see top chart above.
When adjusted for household size, real median income per household member reached an all-time high of $19,546 in 2007 (see bottom chart above), 65.6% higher than the $11,820 income per household member in 1967, and more than 2 times the unadjusted increase per household of 29.6% reported above.
Lost in all of the discussions and media reports about stagnating wages, income inequality, and the decline of the middle-class, we have this amazing statistical reality: In just a little more than one generation, real median income per household member has increased by a factor of almost 2/3!
It's been said that "the media constantly dwell on minor problems without celebrating the broader, more upbeat context in which they exist." A 2/3 increase in real income per person in just 40 years is definitely part of the broader, more upbeat context.
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This article has 15 comments:
Mark, you ever lie to someone taking a poll on the phone? Do you even answer the phone for a poll (I sure don't)?
Side note: humans are funny animals if we had the luxury of just watching them, unfortunately we have to interact with them.
1967: $11,820
In 2007 Dollars: $72,655
So taking inflation into account, REAL income has dropped by over $53000, yielding a REAL per person income decrease of 449%.
There's really nothing to celebrate.
~X~
There are several sites where you can enter in a year and a dollar amount to see what that dollar amount is in today's dollars. When I did this, I got today's equivalent to the 1967 per person income to be over $72,000.
If that is the real worth of those 1967 dollars, then how is our real per person income "higher"? The vast majority of the country earns less than that $72K limit, and therefore have less "real" income.
Regardless. I don't see how today's real income is even higher than 10 years ago, considering the dollar's meteoric plunge over the past decade.
~X~
If he is going to measure real wages in 2007 dollars then he should divide that in 2007 household size. Additionally, this analysis is poor because it penalizes a household for having children. A better analysis would be to take the real 2007 wages divided by the 2007 available working adults per household. When doing this, the line would be flat.
Even if we were to take this analysis at face value, it tells the avg household that your wages have stagnated over the last 30 yrs and the only way for you to increase your std of living is to have less kids. Further, followed to its logical conclusion, what should the avg household do when they finally stop having kids and the size is one?