3 ms·

I think it is a mischaracterization. Notably, the graph provided at the second link covers a time period ending in 2008, the depths of the great recession. Thi

I think it is a mischaracterization. Notably, the graph provided at the second link covers a time period ending in 2008, the depths of the great recession. Things are numerically a bit better than depicted there. The overall story is the same- the bottom and the top of the worldwide income distribution is where things are growing fastest, but the middle is growing slower. It is certainly growing though. 10% real median income growth since the 80's is nothing to sneeze at.

JMTQp8lwXL 7y ago
That's 10% total --over 40 years-- not 10% annualized. In 1979, the median real weekly earnings was $335. Today, it is $362. The actual calculation, 362-335/335 = 8.05%. Over 40 years, 8.05% is 0.2% annualized growth. Let's compare to the S&P 500 index. From Jan 1979 to Dec 2019, the S&P has returned 746% (2,401% including dividend reinvestment) -- both figures adjusted for inflation (as is the FRED data). Annualized, these figures are 5.35% and 8.16%. https://dqydj.com/sp-500-return-calculator/ https://dqydj.com/sp-500-return-calculator/ For bonds, that's 262% and 3.19%, respectively. https://dqydj.com/treasury-return-calculator/ https://dqydj.com/treasury-return-calculator/ 10% over 40 years is absolutely something to sneeze at. That cannot be characterized as meaningful growth.
- mech1234 7y ago
  Another well-regarded source is the congressional budget office. The data linked below from 2014 is even more optimistic than my previous data because it uses household income instead of individual income. (because the distribution of individual incomes is skewed and growing even more skewed, median household incomes grow faster than individual incomes). The CBO data shows 26.1% growth in the incomes of middle quintile households since 1979. This growth is larger if you look at the lowest quintile, include taxes and transfers, or do both. The data goes up to 2014 and would show larger growth still if it went all the way to 2019. https://www.cbo.gov/publication/53597 https://www.cbo.gov/publication/53597
  - viklove 7y ago
    Is that just because more people are opting to live with their parents because they can't afford their own rent?
    - mech1234 7y ago
      No. Household sizes have been getting smaller, not larger, over time. It would be pretty far-fetched for the combinatorial effects of mixed-income households to boost the median in spite of this.
      - viklove 7y ago
        Well, people are having less children now than ever before. That doesn't mean those children are moving out when they reach adulthood.

JMTQp8lwXL 7y ago

That's 10% total --over 40 years-- not 10% annualized. In 1979, the median real weekly earnings was $335. Today, it is $362. The actual calculation, 362-335/335 = 8.05%. Over 40 years, 8.05% is 0.2% annualized growth. Let's compare to the S&P 500 index. From Jan 1979 to Dec 2019, the S&P has returned 746% (2,401% including dividend reinvestment) -- both figures adjusted for inflation (as is the FRED data). Annualized, these figures are 5.35% and 8.16%. https://dqydj.com/sp-500-return-calculator/ https://dqydj.com/sp-500-return-calculator/ For bonds, that's 262% and 3.19%, respectively. https://dqydj.com/treasury-return-calculator/ https://dqydj.com/treasury-return-calculator/ 10% over 40 years is absolutely something to sneeze at. That cannot be characterized as meaningful growth.

mech1234 7y ago
Another well-regarded source is the congressional budget office. The data linked below from 2014 is even more optimistic than my previous data because it uses household income instead of individual income. (because the distribution of individual incomes is skewed and growing even more skewed, median household incomes grow faster than individual incomes). The CBO data shows 26.1% growth in the incomes of middle quintile households since 1979. This growth is larger if you look at the lowest quintile, include taxes and transfers, or do both. The data goes up to 2014 and would show larger growth still if it went all the way to 2019. https://www.cbo.gov/publication/53597 https://www.cbo.gov/publication/53597
- viklove 7y ago
  Is that just because more people are opting to live with their parents because they can't afford their own rent?
  - mech1234 7y ago
    No. Household sizes have been getting smaller, not larger, over time. It would be pretty far-fetched for the combinatorial effects of mixed-income households to boost the median in spite of this.
    - viklove 7y ago
      Well, people are having less children now than ever before. That doesn't mean those children are moving out when they reach adulthood.