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I do t think these charts take into account benefits (I.e. Health insurance) which means that for many people income has not grown, but total compensation has g

I do t think these charts take into account benefits (I.e. Health insurance) which means that for many people income has not grown, but total compensation has grown, those workers just didn't get to choose where to spend it...

maxxxxx 9y ago
In my view health care should be added to inflation. Then the chart would look even worse
- thehardsphere 9y ago
  Inflation is a monetary phenomenon that affects all prices in the economy. If there's only a price increase in one sector it's by definition not inflation.
  - crdoconnor 9y ago
    Not true. When the oil crisis hit in the 70s for example, inflation spiked. OPEC wasn't a monetary phenomenon.
    - thehardsphere 9y ago
      OPEC did not cause the inflation, nor did the increasing price of oil. During the same period, the US fully abandoned the gold standard and the Federal Reserve pursued a policy of loose money. Here's a brief history: http://www.investopedia.com/articles/economics/09/1970s-great-inflation.asp http://www.investopedia.com/articles/economics/09/1970s-grea...
pmiller2 9y ago
In that case, think of that chart as representing "buying power," rather than "income."
- cheald 9y ago
  That doesn't make sense, though, because if your buying power remains stagnant, but you suddenly don't need to buy health insurance with that buying power (because it's handled in the form of pre-takehome compensation), then hasn't your net buying power increased?
- thehardsphere 9y ago
  No, because the buying power of everyone has gone up in most areas thanks to innovations in technology and entrepreneurship duing the period in the chart.
cheald 9y ago
Indeed. In fact, the footnote for that chart acknowledges that: > Income differences narrow when all taxes and transfers—such as health insurance and in-kind government benefits—are included https://www.minneapolisfed.org/publications/the-region/where-has-all-the-income-gone https://www.minneapolisfed.org/publications/the-region/where... expounds on a few of the things that have caused household take-home pay to stagnate. The tl;dr there though is: > Average household size declined substantially during the past 30 years, so household income is being spread across fewer people. The mix of household types—married versus single, young versus old—also changed considerably, so the “median household” in 2006 looks quite different from the “median household” in 1976. Finally, the measure of income used by the Census Bureau to compute household income excludes some rapidly growing sources of income. Which is all to say that it's a bit more complex than a few charts might immediately make it look. Income inequality has certainly seen an increase, but it's incorrect to characterize it as the upper decile bleeding all the benefits out of the rest of the economy.
cmurf 9y ago
Wealth is an asset. Health care insurance is not listed as an asset in accounting, it's a risk mitigator, and the premiums are expenses (typically employer expense, is an employee benefit and in the U.S. it's an untaxed benefit but it's still not income on a profit and loss statement, and it's not an asset on a balance sheet).

maxxxxx 9y ago

In my view health care should be added to inflation. Then the chart would look even worse

thehardsphere 9y ago
Inflation is a monetary phenomenon that affects all prices in the economy. If there's only a price increase in one sector it's by definition not inflation.
- crdoconnor 9y ago
  Not true. When the oil crisis hit in the 70s for example, inflation spiked. OPEC wasn't a monetary phenomenon.
  - thehardsphere 9y ago
    OPEC did not cause the inflation, nor did the increasing price of oil. During the same period, the US fully abandoned the gold standard and the Federal Reserve pursued a policy of loose money. Here's a brief history: http://www.investopedia.com/articles/economics/09/1970s-great-inflation.asp http://www.investopedia.com/articles/economics/09/1970s-grea...

pmiller2 9y ago

In that case, think of that chart as representing "buying power," rather than "income."

cheald 9y ago
That doesn't make sense, though, because if your buying power remains stagnant, but you suddenly don't need to buy health insurance with that buying power (because it's handled in the form of pre-takehome compensation), then hasn't your net buying power increased?
thehardsphere 9y ago
No, because the buying power of everyone has gone up in most areas thanks to innovations in technology and entrepreneurship duing the period in the chart.

cheald 9y ago

Indeed. In fact, the footnote for that chart acknowledges that: > Income differences narrow when all taxes and transfers—such as health insurance and in-kind government benefits—are included https://www.minneapolisfed.org/publications/the-region/where-has-all-the-income-gone https://www.minneapolisfed.org/publications/the-region/where... expounds on a few of the things that have caused household take-home pay to stagnate. The tl;dr there though is: > Average household size declined substantially during the past 30 years, so household income is being spread across fewer people. The mix of household types—married versus single, young versus old—also changed considerably, so the “median household” in 2006 looks quite different from the “median household” in 1976. Finally, the measure of income used by the Census Bureau to compute household income excludes some rapidly growing sources of income. Which is all to say that it's a bit more complex than a few charts might immediately make it look. Income inequality has certainly seen an increase, but it's incorrect to characterize it as the upper decile bleeding all the benefits out of the rest of the economy.

cmurf 9y ago

Wealth is an asset. Health care insurance is not listed as an asset in accounting, it's a risk mitigator, and the premiums are expenses (typically employer expense, is an employee benefit and in the U.S. it's an untaxed benefit but it's still not income on a profit and loss statement, and it's not an asset on a balance sheet).