Are you better off than you were three decades ago?
Based on:
Median
Income for 4-Person Families (US Average)
and
Consumer
Price Index (year to year average)
I spent an afternoon and calculated an Inflation Adjusted Median Income
for 4-Person Families and the year to year percentage change in the
value. Positive change is shown in black, negative change in red..
Inflation
Adjusted Median Income for 4-Person Families
| Year |
Adj. Income
|
% Change |
| 1974 |
$13,286 |
|
| 1975 |
$13,087 |
-1.50% |
| 1976 |
$13,514 |
3.27% |
| 1977 |
$13,721 |
1.53% |
| 1978 |
$13,913 |
1.40% |
| 1979 |
$13,704 |
-1.50% |
| 1980 |
$13,119 |
-4.27% |
| 1981 |
$12,843 |
-2.10% |
| 1982 |
$12,712 |
-1.02% |
| 1983 |
$13,016 |
2.39% |
| 1984 |
$13,297 |
2.16% |
| 1985 |
$13,529 |
1.74% |
| 1986 |
$14,062 |
3.94% |
| 1987 |
$14,393 |
2.35% |
| 1988 |
$14,667 |
1.90% |
| 1989 |
$14,609 |
-0.40% |
| 1990 |
$14,094 |
-3.52% |
| 1991 |
$14,050 |
-0.31% |
| 1992 |
$14,019 |
-0.22% |
| 1993 |
$13,891 |
-0.92% |
| 1994 |
$14,094 |
1.46% |
| 1995 |
$14,490 |
2.81% |
| 1996 |
$14,586 |
0.67% |
| 1997 |
$14,765 |
1.23% |
| 1998 |
$15,271 |
3.43% |
| 1999 |
$15,987 |
4.69% |
| 2000 |
$16,041 |
0.33% |
| 2001 |
$15,867 |
-1.08% |
| 2002 |
$15,483 |
-2.42% |
| 2003 |
$15,704 |
1.43% |
It is interesting to pull some feedback from these values.
First, the effects of the business cycle on families is visible in the
waves of black and red. Most recessions only last a couple of years,
but the effects on family incomes often lasts four or five years.
Employment tends to be a lagging economic indicator. Also, the drop in
family incomes in 2001 - 2002 was relatively mild compared to the
larger dips in 1989 - 1993 and 19790-01982.
You can also correlate these figures with presidential elections. In
1984, 1988, and 1966 the incumbent party was reelected when after a
couple of years of increases in family incomes. In 1980 and 1992 the
incumbent party was defeated after a couple of years of reductions in
family incomes. 1976 and 200 stand out because in those years family
incomes increased, but the incumbent party lost the presidency.
However, in both these elections the party in power had been involved
in widely publicized scandals, and these scandals could have trumped
the effects of the economy.
Overall, the Inflation Adjusted Median Income for 4-Person Families has
increased by about 18% between 1974 and 2003, an increase of less than
1% per year. Also, the definition of the family has changed over that
time. There are more 2 earner families in 2004 than there were in 1974.
Also, average family size is shrinking, so the 4-person family is less
representative in 2003 than it was in 1974. It would take more detailed
data and analysis to more completely represent the full status of
families. I suspect the answer is that families are working harder and
have less time together, but have a bit more income available,
particularly on a per person basis.
Posted by georgegmacdonald at April 24, 2005 07:05 PM