I’ve often heard it claimed that average incomes in the country have made little progress this century, essentially moving sideways since 2000. Is this an accurate description of what has happened?
- using the conventional measures, yes
- average household income – adjusted for inflation, trended upward from 2000- 2007
- then gave it all back during the Great Recession, and only up slightly since then
- same if adjust for household size
- but if use another inflation measure – that economists say is more accurate because it rapidly adjusts for changes in purchases, then up 6% since 2000
- even more improvement if measure after taxes and after transfers – up 18%
- so, makes a difference based on what is being measured