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| Source: Unintended Consequences by Edward Conard, Published by Penguin Portfolio, 2012. |
The chart is another example of how a single summary statistic, real median income, can hide underlying positive trends. In this case, white and non-white, male and female, full-time and part-time workers have seen substantial real median income growth from 15 to 75 percent, before including the value of benefits, over the 25 years from 1980 to 2005, while the overall real median income growth for the entire combined group was only 3 percent over the same time frame.
A free excerpt of the book is available here, including the page with the mentioned figure.
The book is also available for purchase from Amazon:Unintended Consequences: Why Everything You've Been Told About the Economy Is Wrong
I am midway through Conard's book, and the chart you linked to is confusing.
ReplyDeleteThere seem to be some typos in the chart, and it is hard to recreate his numbers.
He states, right before the chart, "Median incomes have increased 30%, on average, across all demographics". His source is the Census Bureau (CB).
CB's Table P-4 shows 2005 Median Income for everyone to be $27,167 and 1980's to be $20,013 (both in 2010 dollars). That is a 36% increase. This isn't a big deal, both numbers show 30%+ increase.
But, it is 30%+ not 3%.
It isn't correct, I don't think and am happy to be corrected, to say as you do, "the overall real median income growth for the entire combined group was only 3 percent over the same time frame".
I've attempted to recreate his chart, using his numbers, without much success.
So, I feel there may be something obvious that I am overlooking.
Any help appreciated!
This comment has been removed by the author.
DeleteThe chart in the post above is a screen image of the exact chart in the online excerpt of Conard's book referenced by Greg Mankiw. The 3 percent increase derives from the numbers in the chart for the constant 2005 dollars for median income in 1980, $25,000, and 2005, $25,700. (Actually a 2.8 percent change rounded up to 3 percent.) I did not verify the data in the chart. You will have to contact Conard if you think his data is incorrect.
DeleteYes, I've read the book and am familiar with Figure 1-6. I wasn't holding you responsible for Conard's numbers.
ReplyDeleteMy assumption is I do not understand the Figure (folks smarter then I, i.e Mankiw, Landsburg, and yourself, have all highlighted the Figure). So, I'm just looking for help/clarity.
Do you believe Real Median Income for all workers has increased 3% from 1980 to 2005?