No matter which inflation metric is used, the average worker's income is not keeping up with the cost of living.
Census Bureau data shows the median or typical household has experienced an inflation adjusted decline of -5% in household income since 1999.
During the 1960's and the first half of the 1970's, 77% of consumption in the U.S. was financed by wage and salary income, according to the Commerce Department. Since then, it has drifted down to just 64% in 2010.
Census Bureau data shows the median or typical household has experienced an inflation adjusted decline of -5% in household income since 1999.
During the 1960's and the first half of the 1970's, 77% of consumption in the U.S. was financed by wage and salary income, according to the Commerce Department. Since then, it has drifted down to just 64% in 2010.
Household debt as a percent of GDP soared from 44% in 1982 to 98% in 2007.
The increase in consumption was also funded by a significant increase in government-backed income transfers (unemployment benefits, social security, disability insurance, Medicare, Medicaid, veteran's benefits, etc) from just 8% in 1970 to almost 18% in 2010.
If it wasn't for the almost $1 trillion in government income transfers made possible by increasing federal debt by +$1 trillion since December 2007, disposable income would be -4.6% lower, rather than up +4.0%!
Source: Anchor Capital
The increase in consumption was also funded by a significant increase in government-backed income transfers (unemployment benefits, social security, disability insurance, Medicare, Medicaid, veteran's benefits, etc) from just 8% in 1970 to almost 18% in 2010.
If it wasn't for the almost $1 trillion in government income transfers made possible by increasing federal debt by +$1 trillion since December 2007, disposable income would be -4.6% lower, rather than up +4.0%!
Source: Anchor Capital
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