Sept. 10, 2019 — Median real household income is the most useful single measure of the extent to which the typical American family has shared in GDP gains. The latest annual number, released today by the Census Bureau, confirms the answer that many had suspected: the typical family has not experienced a statistically significant rise in income. The gains have, rather, gone to those at the top of the income distribution. Median household income did rise during 1993-2000 (during the boom of the Clinton years) and again during 2012-2017 (as the recovery from the global financial crisis started to spread more widely). But its level last year was statistically the same as in 2017 (despite respectable growth in total national income). It was also virtually the same as in 2000, indicating that median income has been essentially flat since the turn of the century.
Why has the median American been left behind? I gave my view of the causes (and some suggested policy responses) in a talk titled “Inequality in America: Achieving An Economy That Works for All.”