Is your family earning twice as much as your parents were 40 years ago (in real dollars)? You should be.

FRED data shows that real per-capita income in the US has doubled since 1975 even despite the financial crisis of 2008.

gdp doubled in 40 years

Unfortunately, this income growth mainly went to the top 10% richest Americans.  Median family income was stagnant from the mid 1970s onwards as shown in this graph from the EPI.

real median family incomeMore than ninety percent of Americans cannot say that they are twice as rich as their parents were 40 years ago in real dollars because this is also the big period of increased inequality in the past century as shown by this graph from Inequality.org:

GIMP-Top-1p-Share-of-Total-PTIFrom the 1930s to the 1970s, inequality dropped and real middle-class incomes soared.  From the 1970s until now, the real median income has been stagnant whereas the top 1% richest Americans’ incomes has soared.  And median household income would have fallen if not for the increased number of hours worked per family.  For example, stagnant wages over the past 40 years helped push families to rely upon daycare so that both parents could work.

GIMP-Real-Average-Hourly-WagesGraph Source: Economic Policy Institute, “Wages and Compensation Stagnating,” 2011, based on Bureau of Labor Statistics data. Figures are for production and non-supervisory workers. (Inequality.org)

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Posted in Macro, Medianism

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