The U.S. Census Bureau reports that median household
income stagnated from 1976 to 2006, growing by only 18 percent. In
contrast, data from the Bureau of Economic Analysis indicate that
income per person was up 80 percent.
Three data issues adversely impact reported median household income gains: the choice of price index, a change in the mix of household types and the measure of income used.
After adjusting the Census data for these three issues, inflation-adjusted median household income for most household types is seen to have increased by 44 percent to 62 percent from 1976 to 2006.
That’s from Terry Fitzgerald at the Minneapolis Fed. I am not sure if he is asserting that his alternatives measures are just that — alternative measures — or if they are the true and correct measures in the sense of being better than the alternatives. In any case this is the latest look at a long-contentious issue. I thank Don Boudreaux for the pointer.