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I don't believe that chart either. In 2003, I bet the average household income was about $30,000 to $40,000, while today, I think it's true that it's about $60,000, but the value of the dollar is no where near as strong as it was 20 years ago thanks to the rising cost of housing and food.
In that time period, my actual income slightly more than doubled. So maybe 110% increase.
But the graph is Real household income, in inflation -adjusted dollars. A 2003 dollar is $1.67 today. Factoring in inflation, my salary only went up 23%. But I went from Research Scientist to Director, from zero direct reports to 15. Much more responsibility.
I was really kind of shocked when I did this calculation.
I don't believe that chart either. In 2003, I bet the average household income was about $30,000 to $40,000, while today, I think it's true that it's about $60,000, but the value of the dollar is no where near as strong as it was 20 years ago thanks to the rising cost of housing and food.
What you say sounds more realistic. The footnotes of the graph say:
"The Census Bureau has changed the methodology for computing median income over time.......
Thus, use caution when comparing median incomes above $12,000 for people or $18,000 for families and households for different years..."
The problem with using annual median household wages is it ignores that it gets weighted down by immigration and larger younger generations.
It ignores that individual households tend to beat the median averages over time.
1 - it ALWAYS gets weighted down by less educated and youth. The way to fix that would be to kill everyone under 50.
2 - it doesn't ignore household that "beat" the median. It's median. There is an equal number of households that make more than that than make less than that. It's not mean.
2a - What you seem to be advocating for is mean household income, that more "accurately" takes into account super earners. 2022 MEAN household income is $106,400, 2022 MEDIAN household income is $74,580. n=125,736,353. 62,838,176 households make less than $74,580, 62,383,176 make more than $74,580.
Why is the MEAN over $30,000 more than MEDIAN - because the top earners earn SO MUCH MORE than everyone else. If n=100, and 99 make zero and 1 makes $10,640,000, the MEAN household income would be $106,400 whereas the MEDIAN would be zero. If 99 made $10,000 and 1 makes 9,640,000 the MEAN household income would be 106,300 but MEDIAN would be $10,000.
At least in 2021 an equal number of households earned less than $25k (18%) that earned over $150k per year (18%)
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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1980 was the year our oldest was born, and at that time our combined income was about $50 with my wife working only part time. Today we are at close to 5 times that. Twenty years ago was 2004, and I had a small business then, and we were at about $100k. With several promotions and annual raises I'm making over 3 times what I made starting this job 15 years ago. Note: in the 2008 recession the business failed after 16 years, we made less than in 1980 and were in pre-foreclosure before I got the new job in 2009.
20 years ago was just before I retired. Earned income then was $183,500.
Was mortgage-free and debt-free then, as now.
Retirement income is now $145,000. Would be more except ( a ) I am pulling the minimal RMD from my IRA and ( b ) I can live quite comfortably on about a third of my current income. So my savings are increasing and therefore my interest income is increasing. Will have to see what the impact will be from inflation and changing interest rates.
1984 it was less than $12,000 a year with a lot of overtime. income tax last week it was $65,000 for 2023
I usually bring home about $3000 a month, the last six month because of biden its been about $1200. there just no work out there the last six month, 20 hours a week no cutting it
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