NewDealdemocrat | September 17, 2017 4:22 pm
2.5 cheers for 2016’s new high in real median household income!
- it is NOT a measure of real wages. It includes all income — things like pensions, dividends, and social security.
- it includes ALL households, not just those headed by workers. A household of full time students is included. Your 85 year old grandparents are included. A household where one or more persons is unemployed is included. A household where one spouse stays home to raise the children is included.
- it is subject to distortions from demographics. In particular, since retirees tend to have only about half the income of households headed by wage or salary earners, as the percentage of households headed by retirees rises (due to both healthier longevities and Boomer retirements), downward pressure is placed on the median. Below is the graph of current US demographics, showing the barbell effect of young Millennials and old Boomers bracketing the smailler Gen X:
Finally, it wouldn’t be a true positive report without its very own batch of Doomer hogwash. This year’s hogwash is that the increase only happened because people had to work longer hours. I’m not sure who originated it, but here are two links: here and here, with the relevant quote:
[T]he Census Bureau data show that the bulk of the gains in real income in 2016 was explained by one factor: higher employment. In other words, hours worked rose but wages did not. The members of American median households are working harder at more jobs to finally get an increase in incomes.