Tuesday, September 12, 2017

Constantin Gurdgiev — U.S. Median Household Income: The Myths of Recovery

Key point here is that any direct comparison between 1999 and 2016 in terms of median incomes is problematic at best. It is problematic in technical terms (methodological changes and CPI deflator changes), and it is problematic in incidence terms (composition of work earnings, risks, incidences of costs and taxes). My advice: don’t ever do it without thinking about all important caveats.
Materially, U.S. households' disposable risk-adjusted incomes are lower today than they were in 1999. That explains why American households are drowning in debt: the demand for income vastly exceeds the supply of income, even as official median household size shrinks and cost of housing is being deflated by children staying in parents homes for decades after college. The rosy times are not upon us, folks.
true economics
U.S. Median Household Income: The Myths of Recovery
Constantin Gurdgiev | chairman of the Ireland-Russia Business Association, contributor and former editor of Business & Finance Magazine, and lecturer in Finance with Trinity College, Dublin

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