Even measured by family size, median incomes still fell

Opinion pieces and speeches by EPI staff and associates.

September 6, 2007

I served on a conference panel today hosted by financial analyst and CNBC host Larry Kudlow. Steve Moore, editorial writer for the Wall Street Journal was also on the panel.

During a debate about recent income trends, I pointed out that the inflation-adjusted incomes are down since 2000 for the typical, or median household. See this document for an analysis of these trends. We find, for example, that the real median household’s income is down 2%, 2000-06.

Kudlow and Moore argued that this negative result would disappear if we were to adjust for family size. That is, they presumably believe that family size has fallen since 2000, and thus size-adjusted incomes have grown more quickly than unadjusted data.

I asserted that even with such an adjustment, real incomes would still be down. The figure below confirms these findings.

The first bar shows a Census family income measure, adjusted for family size, down 1.1% since 2000. The other measures are for real median household incomes, holding household size constant. In every case, income is flat or falling.

(figure)

[POSTED TO VIEWPOINTS ON SEPTEMBER 6, 2007.]