The Terrible Facts about the Real Earnings of Men

by Wolf Richter, Wolf Street:

The income data from the Census Bureau is here. Men, sit down.

On the surface, the data looks benign, with trends improving. And this is what you will see when you look at the media coverage of the Census Bureau’s Income and Poverty report (PDF) released today:

  • Median household income, adjusted for inflation (via CPI), rose 3.2% between 2015 and 2016 to $59,039, the second year in a row of annual increases.
  • For “family households,” the median income rose 2.7% to $75,062. For “nonfamily households,” it rose 4.5% to $35,761.
  • The official poverty rate (weighted average threshold for a family of four = $24,563) inched down from last year to 12.7%, about the same as in 2007, before the Financial Crisis made a mess of people’s lives. In total, 40.6 million people live in poverty by this definition.
  • The poverty rate for families fell to 9.8%, from 10.4% a year earlier, affecting 8.1 million families.

The survey is based on respondents at 98,000 addresses across the US — so a very large sample. Household income includes the amounts of money that the household received during that year from each of the following sources:

  1. Earnings
  2. Unemployment compensation
  3. Workers’ compensation
  4. Social security
  5. Supplemental security income
  6. Public assistance
  7. Veterans’ payments
  8. Survivor benefits
  9. Disability benefits
  10. Pension or retirement income
  11. Interest
  12. Dividends
  13. Rents, royalties, and estates and trusts
  14. Educational assistance
  15. Alimony
  16. Child support
  17. Financial assistance from outside of the household
  18. Other income

All these sources combined form household income in this survey. Adjusted for inflation via the Consumer Price Index for urban consumers (CPI-U), the median household income, at $59.039, has set a new record, beating the prior record set in 1999 ($58,665).

This was the good news, with median household income finally a tad above where it had been 17 years ago:

US-household-income-2016.png

And that’s what the media focused on, this triumph of 17 years of stagnation, rather than decline. But buried in the data is a bitter reality for men:

44 years of real earnings decline.

For women who were working full-time year-round, median earnings (income obtained only from working) rose 0.7% on an inflation-adjusted basis from a year ago to $48,328, continuing well-deserved increases over the data series going back to 1960. The female-to-male earnings ratio hit a new record of 80.5%, after steady increases, up from the 60%-range, where it had been between 1960 and 1982. And while that may still be inadequate, and while more progress needs to be made for women in the workforce, it was nevertheless the good news.

Men in the workforce haven’t been so lucky. They have experienced the brunt of the wage repression over the past four decades, obtained in part via inflation, where wages inch up, but not quite enough to keep up with the Fed-engineered loss of purchasing power of the dollar.

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