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Explaining the Rise in Median Wages


Explaining the Rise in Median Wages

Chuck Collins

Good news can be elusive when reporting on the steady rise of inequality. So its heartening to see that median household incomes in the past year jumped more than 5 percent in the past year, now up to $56,500 according to a just released Census report.

The income boosts were felt across economic spectrum, a sharing of gains rarely seen since the shared prosperity decades between 1947 and 1977.


"Restoring progressive income tax rates and closing estate tax loopholes would generate revenue that could be invested in public infrastructure and accessible higher education."

Higher taxes on the one percent could also fund sharp increases in the Earned Income Tax Credit to move many more families out of poverty and despair. President Clinton boosted the EITC in 1993 to very good effect.


In 2018 those increased wages will be further decreased when Obama's ACA requires the ENTIRE value of employer sponsored medical insurance become fully taxable.

To date the employer cost and employee contribution are income tax free. When both start being taxed some workers will have a taxable income higher than the sum of their earnings for each year (when the employer cost is added to the tax bill).


I thought the census was every 10 years. Do they do a smaller one every single year?

Also, people have pointed out that family income increases does not mean individual income increases (it could result from family members working who were previously not); income increase does not mean wage increase (it could be from an increase in hours worked), and median income increase does not necessarily mean increases at every decile. Do we have this information?


Nothing has changed, folks. Don't let a smidgen of good news fool you. We've seen this before. The U. S. is in the latter stages of the growth period of the business cycle, which is now 7 years old. So in the last phase of the growth cycle, it's not surprising to see some positive signs for the bottom 99% that have scarcely been evident since the last phase of the previous growth period. The next recession is not far away -- certainly during the next President's term -- and all these modest gains will be lost, and more.



Changing your adjusted gross income (by eliminating deductions) does not affect your gross income, it only makes your tax bill higher; i.e., your taxes go up even though you don't get an increase in your income. The reason that IRA's are good for workers is that taxes are deferred on contributions to IRA's. You only pay taxes on the income from the IRA when you start to collect that income.

At present, fringe benefits like health insurance are not taxable income. But even people who are self-employed can use health insurance premiums as a deduction for medical expenses.

Many economists think that the mortgage interest deduction should be eliminated. But the builders and the banks are opposed to this because many people will take out mortgages to build houses because they think this will decrease their taxes (the more people who take out loans to buy houses, the more money the capitalists make). They are fools becuase the tax savings are not nearly the same as the expenses of paying off the mortgage and building the house. The same reasoning is used to tax employer-provided health insurance as income.


The census bureau does a variety of surveys but only one decennial census. The most important regular survey they do is the American Community Survey. It gathers the same kind of information that used to be on the so-called "long-form" of the regular census. The ACS samples about 1% of the whole population every year (that's about three and a half million people!). Because it is conducted by the census bureau it gets a very high response rate - It is an extremely important survey for public policy planning.


That isn't true. I'm pretty sure the ACA only taxes the so-called "cadillac plans"starting in 2018. (e.g. they only tax the part valued over $27,500 for a family plan - and that amount will go up with inflation). Only about quarter of employees plans will be taxed at all and the vast majority of those will be taxed only a few bucks because most of the plans above the limits are just a little above it. Further this is an excise tax not an income tax and it is to be paid by the insurance companies.


Thanks to policies attached to Clinton's repeal of welfare, we really don't know how many Americans are in deep poverty. There is no way to count them, other than jail and morgue statistics. In the past, we relied on welfare and UI statistics to estimate poverty rates in the US. There is no method in use today for calculating the number who have been pushed out of the job market.

We do know that not everyone can work (health, etc.), and that there aren't jobs for all. The US shipped out a huge number of jobs since the 1980s, ended actual welfare in the 1990s, and it defies all logic to claim that there are no consequences. The last I heard, there are 7 jobs for every 10 jobless people who still have the means to pursue one (home address, phone, etc.) We have no idea of how many are even worse off.

To say that "income boosts were felt across the economic spectrum" applies ONLY if you exclude the truly poor.The longer we've ignored poverty, the wider and deeper it has grown.


How are the census forms delivered to people? Mail, correct? How would they reach the homeless?


On a point that you make, "some positive signs for the bottom 99%," note that the US is not "the 1% vs. the 99%." We're rich vs. middle class vs. poor. (Nope, ignoring our poverty crisis didn't make it go away.) The closest thing there would be to "positive signs" for those at the bottom, would be a better quality of thrown-away food. A chunk of the country is living in the Great Depression. There simply aren't jobs available for all. Most low-wage workers are one job loss from losing everything, with no way back up. Once you no longer have a home address, phone, etc. -- you're out. You can't get a job if any come along.


According to the charts put out by the census bureau, the median household income in 2015 = 56,516, while the median household income in 1999 = 57,909. In other words, despite the "amazing growth" in household income in 2015, household income by 2015 still wasn't as high as it was 16 years before that. What the heck is there to celebrate about that?

Remember, this is household income, not individual income. So the entire household, which may include several wage-earners, is getting by on an income level that is actually lower than it was in 1999, while basic expenses (food, housing, healthcare, etc.) has continually increased over the years. One third of people aged 21 - 34 still live with their parents; a level never before seen in this country, even during the Great Depression of the 1930's. They may be working some sort of job, but can't afford to live on their own. So, yeah, that would increase household income.

Also, the census bureau changed the way they worded their questions to create their reports for this period, and even included a disclaimer (that the media didn't bother to read) that this report might not be accurate.

See this for an accurate deconstruction of the report: http://www.declineoftheempire.com/2016/09/deconstructing-median-income-bullshit.html#more


The Census bureau works really hard to reach everyone and lots of people are tough to reach - young people who move frequently, homeless people, people with little trust in government and wound tend to refuse. They have special strategies for each type of hard to reach citizens. for the homeless in particular they have an extensive system that works with shelters, food banks, soup kitchens, and others that provide services to the homeless.