Dylan Matthews had an article out today attempting to debunk a claim that Obama made in his economic address yesterday:
During his big economic speech Wednesday, President Obama declared, “The link between higher productivity and people’s wages and salaries was severed – the income of the top 1 percent nearly quadrupled from 1979 to 2007, while the typical family’s barely budged.”
The problem, as James Pethokoukis pointed out, is the latter statement is not true. Admittedly, “barely budged” is a pretty vague term, but according to the Current Population Survey’s Annual Social Economic Supplements (ASEC) — a Census Bureau publication tracking income, health coverage, and poverty — the real median American family income increased by 17.7 percent between 1979 and 2007, and the real median household income (which includes people living alone and unrelated roommates) grew by 14.7 percent.
Matthews then goes through a number of alternative ways of calculating median household income, including looking at the value of median income after taxes, transfers, and non-cash benefits. Matthews concludes with:
But real median household incomes in America are growing, and it’s inaccurate of Obama to suggest otherwise.
Ok, admittedly, Obama’s language wasn’t very precise here, and he was cherry-picking his date to inflate the increase in the top 1% income (2007, right before the crash), but Matthews’ reporting was incomplete and it is completely false to say that median incomes have been growing. Via Felix Salmon:
Between 1979 and 2001, median household income grew around 17% from roughly $47,000/year to roughly $55,000 per year. However, household income flatlined between 2001 and 2007, and then fell 10% from 2007 to 2011. So, even measuring using Obama’s chosen dates, its inaccurate to say that median household incomes have been growing, because they were flat from 01 to 07. Assuming Obama was a little loose with his language, median household incomes are only up about 5% from 1979 through 2011, and, more importantly, they have been falling over the last decade. Keep in mind, this is over a period of time where real GDP/capita in the US grew 64%.