Wednesday, January 22, 2014

Emptying the Nest

One of the main reasons that median family income has stagnated over the past 40 years (and it actually hasn't - the middle quintile's income has has risen somewhere between 35.2% and 43.7% from 1979 to 2007 - depending upon how you calculate inflation) is that a) the size of the average family has gone down 21.2% from 1967 to 2007 and b) the number of single person households has skyrocketed 60% (from 17.2% of families to 27.5% of families)......................................................................................Yep, it's really just as simple as that, people. There simply aren't as many families with multiple earners as there used to be and this has thoroughly skewed the data. My suggestion to the folks is that whenever somebody tries to make a political point on income inequality and they do it by trotting out family statistics, approach them with caution and do a little bit of digging on your own...................................................................................P.S. I will concede that the last 4-5 years have been difficult (especially for those folks who lack skills) but that I blame squarely on the government; ridiculous regulations, idiotic policies from the Federal Reserve, a crappy educational system, etc.. If we can ever straighten things out down there, a reemergence of growth in the future is altogether possible.

8 comments:

dmarks said...

Yes, so many problems made by meddling rulers. Imagine, Will, if there had been no government agencies Fannie and Freddie, no ill-conceived and racist Community Reinvestment Act to force banks to lend to undeserving people. Do you think the economic meltdown would have occurred at all? In an environment where banks had no incentive to make bad loans at all?

BB-Idaho said...

So how would that change this graph ?

Will "take no prisoners" Hart said...

http://www.census.gov/prod/2008pubs/p60-235.pdf - BB, the median family income in 1967 was $38,771 and by 2011 it had risen to $51,100. That's a 31.8% increase (a conservative estimate in that the government tends to use the CPI which has a tendency to exaggerate inflation)- this, despite the fact that single wage-earner households have dramatically increased. And the productivity gains are due to automation, not because our workers are any better.

Will "take no prisoners" Hart said...

dmarks, those things that you mention definitely played a factor but the real prime-mover in my opinion was the FED; Greenspan monkeying with the interest rates, printing money like it was going out of style, creating what was obviously a bailout culture, etc.. If it wasn't for Greenspan and his sons, Bernanke, Paulson, and Geithner (and, no, Obama didn't help, either), we'd a been out of this (and much stronger) in 18 months, maybe less.

Rational Nation USA said...

In 2011 it took $6.73 to purchase what $1.00 could purchase in 1967.

Hm, working on the math.

Will "take no prisoners" Hart said...

Les, the figures are adjusted for inflation. That 31.8% growth represents actual purchasing power.

BB-Idaho said...

Attempting to reconcile graphs,
we note your link addressed a census of fully employed .
The ratio of fully to part-time rose considerably during the time
frame, perhaps confounding the
issue?

BB-Idaho said...

Not surprising that the
median family income has gone up.