Tuesday, August 21, 2007

Would someone tell Larry Kudlow that most people don't appreciate the so-called "Bush Boom", because for most Americans, there's no such thing.
Americans earned a smaller average income in 2005 than in 2000, the fifth consecutive year that they had to make ends meet with less money than at the peak of the last economic expansion, new government data shows.

While incomes have been on the rise since 2002, the average income in 2005 was $55,238, still nearly 1 percent less than the $55,714 in 2000, after adjusting for inflation, analysis of new tax statistics show...

Total income listed on tax returns grew every year after World War II, with a single one-year exception, until 2001, making the five-year period of lower average incomes and four years of lower total incomes a new experience for the majority of Americans born since 1945.
Luckily, the rich are still getting richer, as thinking people predicted would happen in Bush's economy, but the White House says Nothing to see here, move along.
Mr. Fratto said the fact that nearly all of the growth in incomes was among those in the upper reaches of the income ladder and that the majority of investment tax breaks went to those making more than $1 million “is not a very interesting story.”
As a middle class guy, I can assure you this story is quite interesting to me, especially when you consider that, according to the Bureau of Labor Statistics' inflation calculator tells me that the $55,714.00 the average American made in 2000 equated to $63,187.83 in 2005, a rise of 13 percent. (I missed that the figures were inflation adjusted. My bad.)

4 Comments:

Anonymous kurzleg said...

But if average wages rise, then we'll have inflation!!! See, it's okay for very rich people to get even richer because that doesn't increase the rate of inflation. But if rank and file workers earn more, then run for the hills!

I'd love to see a serious analysis of the impact wealth consolidation (or I guess more correctly the consolidation of the share of GDP) has on the economy. We only hear about inflation, but that's not the only factor worth considering.

6:24 AM  
Anonymous Anonymous said...

Re: especially when you consider that, according to the Bureau of Labor Statistics' inflation calculator tells me that the $55,714.00 the average American made in 2000 equated to $63,187.83 in 2005, a rise of 13 percent.

Although Johnston did not tell us the source of his numbers (other than they are from a "new government study") he does refer to an inflation adjustment:

While incomes have been on the rise since 2002, the average income in 2005 was $55,238, still nearly 1 percent less than the $55,714 in 2000, after adjusting for inflation, analysis of new tax statistics show.

That said, I have a strong suspicion he is referring to household income, not individual income, and that median household income fell by *more* than the mean income he *seems* to be reporting here - in other words, a more reasonable set of statistics would tell an even grimmer story.

This is journalism?

Tom Maguire

6:54 AM  
Blogger Nitpicker said...

My bad, Tom.

9:48 AM  
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2:37 AM  

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