Good News on Income – Econlib

The Bureau of Labor Statistics released updated figures on household and individual income.  The news is quite positive:

Real median household income in 2024 was a record $83,730, reversing a downward trend that began in 2020 with the pandemic.  Real median individual income also reached a new high at $45,140 in 2024.[1]  Both of these figures continue a general rising trend that has been going on since the 80s.[2]  What’s interesting to note is that, contrary to the stories told by the Left and the MAGA Right, American incomes are not stagnating.  Real median household income is up 38.6% since 1984, and real individual median income is up 57.1% since 1974.

In order for real income to be generally rising, the economy needs to be generally growing.  Looking at the data, stagnation happens when we are in recessionary periods.  It grows where we are generally growing.  Some, like E.J. Antoni, argue we’ve been in a recession since 2022.  The data do not support that contention.[3]

In the short run, there certainly are concerns about the US economy: tariffs, weak employment, stubbornly high inflation, and increasing economic isolationism.  But, in the long run, the US economy still has legs.  To defeat defeatism, we must look at the data and take heart in the optimistic signals it sends.

——[1] To head off any objections: “real” means “inflation-adjusted” and “median” is the point where half of households are above and half below that value, so outliers like the super wealthy and super poor will not influence the number.  These results are not being driven by inflation or gains in just the super wealthy.

[2] Real median household income data go back to 1984 while individual income goes back to 1974.  Given that household income generally tracks individual income, it’s probable that household income likely was rising earlier than 1984, too.

[3] There are other empirical and theoretical issues with the argument that the United States has been in a recession since 2022.  See, for example, America in Recession Since 2022?  A Critique of Antoni-St. Onge by UW-Madison economist Menzie Chinn.