Why People Disagree on Whether Real Income is Increasing

I am always sort of amazed when blogsphere debates erupt around issues of fact.  Specifically, people have been debating whether real income is increasing for the average person.  This seems a bizarre debate - lets just look at the table and see.  However, real vs. nominal numbers, cherry-picking end points, and the like, allow folks to come up with opposite conclusions.

Russell Roberts at Cafe Hayek
points to another reason we can debate:  Much of the real income growth over the last five years has been from non-cash benefits, like medical and pension contributions.



  1. Mesa EconoGuy:

    No. There is no debate.

    Seriously. [Russ actually put it that way to me in grad school Micro, and he was right].

    We are far economically better off right now than 8 years ago. There is no cogent counterargument here – every single economic prosperity measurement has increased: total income, net income, corporate earnings, number of shareholders, number of investors, market index levels, international trade, etc. etc. etc.

  2. Methinks:

    I keep telling "the poor" all this but they manage to pull the burger out of their mouths, yank the Ipod out of their ears and look up from their Gameboy only long enough to lecture me on the shrinking middle class and how the rich are stealing the wealth of the poor. Pretty much, the conversation ends there because they usually have to rush off to collect their welfare check and cash it pronto. Word on the street is that the local Circuit City has Playstation 3 in stock and they want to make sure they're able to purchase one while supplies last and before their buddies beat them to it.