09 September 2020

Decades of stagnant wages are a reality for a broad swath of Americans

The meme below is misleading at best. the median income figures aren't too far off from reality for inflation adjusted dollars, but are just plain wrong for the nominal dollars implied by the cost of eggs comparison provided. The reality is inflation adjusted 2018 dollars is that median income for Americans aged 25 to 34 was: 

$35,648 in 2016 (+0.9%)

$35,337 in 1977

Thus, young adults have received none of the benefit of the last four decades of economic growth and productivity growth in the United States.

Overall median income:

$32,542 in 2016 (+ 33.7%)

$24,334 in 1977.

If economic growth had been shared equitably over the last four decades, the median income for Americans aged 25 to 35 in inflation adjusted 2018 dollars would be:

$47,245.57 in 2016. 

In other words, the median young adult would make about $1000 a month more than they do.

This is the age at which people tend to start having kids, so this impacts not just the well being of young adults, but the well being of most children in the United States.

But, they aren't four times as poor as their peers from four decades ago as the meme implies. In fairness, the inconsistency is a product of the original tweet not clarifying that inflation adjusted dollars were used and the person responding to it misunderstanding what the numbers meant.

Image may contain: text that says 'ian bremmer @ianbremmer Follow Things not looking so good for millennials.. MEDIAN INCOME 34k Americans aged 25 to 34 1977 34k 2016 Owen Watson Watson @ohwatson Follow Price of a loaf of bread: 1977 $0.32 2016: $1.96 Median income, ages 25-34: 1977: $34,000 2016: $34,000 But sure let's keep paying people to write articles about how our generation is at fault for society's problems'

1 comment:

Guy said...

Lolz, if I were Emperor of the World, I would say that the American lower class workers are over paid on a global basis, and that their wages should stand still until other folks who are just a well educated and hard working catch up. And so it was done. Now that the rest of the world (read China) are catching up it's time for the middle class to under go the same leveling process.
I am not Emperor, but we see that forces of history (as interpreted by the Washington elite) are pushing in that direction. Our leaders may try to conceal this from the deplorables, but it pretty obvious.