from Cafe Hayek, Don Boudreaux writes More Evidence of Evidence

excerpts:

Notice that, in one sense, the American middle-class is disappearing – at least as this class was defined, household-income-wise, in the mid-1970s. But it’s disappearing by becoming richer, even when measured in strictly real monetary incomes.  The percentage of American households with what might commonly be regarded to be middle-class incomes is indeed falling – but so, too, is the percentage of American households with what are surely “poor” incomes.  So once-middle-class Americans are not becoming poor.  Instead, they’re becoming rich; their real monetary incomes are rising.  The percentage of American households earning high incomes ($100,000 annually and above) is on the rise – and impressively so.  Let me emphasize: A much greater percentage of households today (compared to 1975) have annual incomes of $100,000 or more (in 2013 dollars).

Here are a few other things to note:

(1) the average number of persons per American household today (2013) is 13.6 percent fewer than in 1975, so each real dollar of household income is today shared by fewer people than in 1975 – meaning that the increase in “per-person-in-household” annual real incomes is even more impressive than these data show;

(2) these data are pre-tax yet post-cash transfers (such as Social Security payments);*

(3) these data include neither fringe benefits (which are a larger portion of the typical American worker’s income than was true in 1975) nor non-cash transfers such as food stamps and energy assistance;*

HKO

Income inequality is harder to quantify that most think.  But the preferred or accepted narrative is constrained by impatient media and its consumers.  What we have is a lazy incomplete picture that is accepted because it fits what we want to hear.

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