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Tab dump

1) Real median family income, 1947-2007.

2) Is Rihanna's new single a justification for staying in an abusive relationship?

3) Mike Rorty's introduction to geo-engineering the planet.

4) The Wire's Omar endorses Jon Corzine.

Well, that race is over. You really going to vote against Omar?

By Ezra Klein  |  October 20, 2009; 5:41 PM ET
 
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Comments

Breaking News: NJ GOP hires Kenard.

Posted by: torteya | October 20, 2009 9:54 PM | Report abuse

Obviously median family income is a poor marker of quality of life. When you switch from a rural to an urban lifestyle income always goes up. Are we any happier? And what would the median income be if the lion's share of our wealth wasn't skimmed by crony capitalists? One can only imagine.

Posted by: bmull | October 21, 2009 3:09 AM | Report abuse

You know a better graph would be one which shows the growth rate each year in median family income rather than the absolute real dollar amount.

Here's why:

To the layperson an absolute dollar amount can mislead in judging percentage rate of increase. Suppose the real median family income was $25,000 in 1947, and it was $60,000 in 2007, and was a perfect straight line graph in between connecting those two points. This line would have a slope of $574 per year.

Many laypeople would look at that graph and think the improvement in median income has been steady. It hasn't gotten worse over time. But the rate of improvement, the percentage rate, has gotten far worse over time. When you have a $25,000 median income in 1947, an addition of $547 is an improvement of $547/$25,000 = 2.2%. But in 2007 when the median income is $60,000, then the improvement rate is just $547/$60,000 = 1.0%, less than half the growth rate of 1947.

In the graph you do use, it's important to note that over the first 30.5 year period, 1947-1977.5, a very Democratic period, with big government, very affordable college, crap like that, real median family income doubled, from just under $25,000 to just under $50,000. In the second 30.5 year period, 1977.5-2007, the period of Republican dominance, median family income went from just under $50,000 to just under $60,000, an increase of only about 20%, versus 100% during the Democratic period and that's not even counting the close call Depression were currently in.

Posted by: RichardHSerlin | October 21, 2009 3:39 AM | Report abuse

Two things I should add:

1) Not only did real median family income rise far slower in the Republican era than the Democratic one, the risk around that income skyrocketed under the Republicans (see Yale's Jacob Hacker's book, "The Great Risk Shift"). It's far better to have a steady $60,000 per year income, or a steadily rising one, than it is to have a $60,000 per year average income that is $80,000 for a while and then suddenly plummets to $40,000. Once you and your family have grown accustomed to $80,000 per year, a drop to $40,000 is devastating. That's human nature; position/context/perceived prestige are extremely important to human happiness, or utility to use the economics term. And it's not just far greater risk from income loss in the Republican period, it's also far greater risk from losing your health insurance, or being devastated from illness costs even with health insurance, as is the case in most medical bankruptcies.

2) Families have far more debt in the Republican era than the Democratic one. $60,000 per year with very high debt is far less comfortable and far more stressful than it is with little or no debt.

Posted by: RichardHSerlin | October 21, 2009 4:59 AM | Report abuse

Excellent points all, RichardHSerlin.

Posted by: bmull | October 21, 2009 5:39 AM | Report abuse

Just to add to Richard's points:

Heres a graph of the growth of the income of the top 1% over the past about 30 years.

http://lanekenworthy.net/2008/03/09/the-best-inequality-graph/

So while the real median is up 20% over that 30 yr time period, it looks like the top 1% enjoyed about a 250-300% increase.

Posted by: luko | October 21, 2009 9:01 AM | Report abuse

Chris Christie better have this election in the bag. Because if you come at the King, you best not miss.

Posted by: MattMilholland | October 21, 2009 7:37 PM | Report abuse

The comments to this entry are closed.

 
 
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