Wednesday, October 26, 2011

Median Family Income

This chart of median household income (adjusted for inflation) tells you a lot about the past decade in America. Note that the top line, for pre-tax income, has not gone up at all. The bottom line has gone up a little, because of the Bush tax cuts and the Obama stimulus tax cuts. Of course, these tax cuts have caused the deficit to balloon to a level most people think is unsustainable. But in an environment of wage stagnation, people are justifiably upset about the prospect of their taxes going up.

Yes, this chart does show that median household income has risen since the 70s, but that is entirely because we work more (more women in the workforce, mainly). The average job pays less now. But we really have seen a whole decade of income stagnation for most Americans, while the rich keep getting richer. This basic economic fact feeds the anger in America on both the left and the right, and to get our country back together we need to get that line rising. The modern social contract depends on things getting better for most people.

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