Sep 15, 2011 at 8:16 am
Regarding my post about the lost decade in middle-class incomes, a number have commenters have raised questions about changes in family size and work effort. A quick response:
Size-adjusting doesn’t change much at all: the trends are the same…the decade of the 2000s remains a bust. Census provides a useful figure that adjusts for size by dividing family income by the poverty line for that sized family (e.g., the income of a family of four is divided by the poverty line for a family of four, about $22,000). They provide the data by income fifth–I’ve plotted the middle-fifth, the average income of families between the 40th and 60th percentile.
The figure, as you see, tracks that of the median household income here.
Source: Census Bureau, Table f-21, middle-fifth
As for family work effort, as some folks noted, the weakness in the long-term income trends is in that sense understated, since, as I show in figure 3 and table 1 here, families are generally spending more hours in the paid labor force. Yet, despite greater work effort, sluggish real wage trends, especially for men, have diminished the growth impact of that extra work.
Also, note that the “extra-hours-of-work” strategy broke down to some extent in the 2000s—an issue I discuss in the link above.
At any rate, dynamics in family size or work effort don’t change the story.
Thank you for joining the conversation. Comments are limited to 1,500 characters and are subject to approval and moderation. We reserve the right to remove comments that: