Today’s media pick is from the NYT. For the first time since 2000, the average income actually rose in the US, according to IRS data. I don’t think we need to worry about a wage related inflationary spiral, though.
"Americans enjoyed higher average income in 2006 for the first time since 2000, when the last economic expansion ended, the latest tax data show.
Adjusted gross income reported on tax returns in 2006 averaged $58,029. In 2006 dollars that was an increase of $739, or 1.2 percent, from the $57,289 average in 2000, analysis of Internal Revenue Service data showed.
Total income increased by $619.2 billion or 8.3 percent, all of which went to those making more than $75,000, and 42 percent of which went to the roughly one in 400 taxpayers who made more than $1 million in 2006.
Average income fell sharply in 2001 and in 2002, when it dropped to $51,870, off nearly 10 percent from 2000, tax data show. The average grew slightly in 2003.
Average income grew significantly in 2004, rising $2,291, and again in 2005, when the average increased by $2,210. Income growth continued in 2006, but at a much slower pace, increasing by $1,369 over the 2005 average once inflation is taken into account.
Salaries and wages, by far the largest source of income, nearly returned to the 2000 average in 2006. However, among the highest-paid workers, both total and average wages fell, an indication of how the Internet bubble had concentrated gains among a relatively few workers. The average wage in 2006 was $46,996, down $101, or a fraction of 1 percent, from $47,097 in 2000. Average wages in this decade hit a low of $45,956 in 2003, the I.R.S. data show."
Fascinating period of time — six years of zero wage gains, while goods and services skyrocketed in price. Ouch!
UPDATE: August 27, 2008 6:49am
Three things to note:
1) This is old data, only updated as of 2006;
2) It is, a comment pointed out, average, not median — a longstanding peeve of ours.
3) The IRS measure is rather different than what we see out of BEA or BLS. The Fed’s numbers on family income seem to be the most cleareyed.
Average U.S. Income Showed First Rise Over 2000
DAVID CAY JOHNSTON
NYT, August 25, 2008