NYT: You Can’t Feed a Family With G.D.P. [View all]

[Scuba]

http://mobile.nytimes.com/2014/09/17/upshot/you-cant-feed-a-family-with-gdp.html?referrer=&_r=1

The census numbers on what American families made last year are as mediocre as they are predictable. We now know that if your household brought in $51,939 in income last year, you were right at the 50th percentile, with half of households doing better and half doing worse. In inflation-adjusted terms, that is up a mere 0.3 percent from 2012. If you’re counting, that’s an extra $180 in annual real income for a middle-income American family. Don’t spend your extra $3.46 a week all in one place.

Going back a little further, the numbers are even gloomier. The 2013 median income remained a whopping 8 percent — about $4,500 per year — below where it was in 2007. The 2008 recession depressed wages for middle-income Americans, and they haven’t recovered in any meaningful way. And 2007 household incomes were actually below the 1999 peak.

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This simple fact may be the most important thing to understand about today’s economy: Around 1999, growth in the United States economy stopped translating to growth in middle-class incomes. In the last 15 years, median income has been more or less flat while there was far sharper growth in, for example, per capita gross domestic product.

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The rubber-meets-road measure of whether the economy is working for the mass of Americans is median real income and related measures of how much money is making its way into their pockets and what they can buy with that money. And the newest census numbers show that the nation experienced virtually no progress on that frontier in 2013, and remains far behind where we were seven years ago. Americans feel disappointed by the economy; the new data show that they have good reason.