from Cafe Hayek, Don Boudreaux writes More Evidence of Evidence [1]
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 [2], 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.