Updated with 2006 data: Average Income in the United States (1913-2006)
Here is a graph of average income (1913-2004) that I have been working on for a while. I am trying to incorporate into the graph economic and world events that would have affected the U.S. economy, making the assumption that the avg income is also affected by these events. The graph shows income that includes capital gain and income that does not include capital gains. After you finish looking at historical average income you should check out my series of graphs on Income Distribution to understand why average income doesn’t tell the whole story.
{Click on the graph to take a closer look}
Data from Emmanuel Saez’s web site
Addendum:
8/29/2006 Added Visualizing Economics logo to the graph; Reformatted some of the labels and legend
Also I have turned on the comments for this post so if you see a problem with the graph you can let me know. I will be updating it, as needed.
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It would be really interesting to see this plot juxtaposed with the US oil consumption figures — the shape of the plot reminded me a lot of the ASPO chart of world oil supply (see oilposter.org to view that) and I got to wondering about the connection.
Great site! Fascinating.
Average income is not particularly salient. Modal figures are more useful.
Interesting to see what major wars do to the graph….
This graph is nice and its cool to juxtapose with certain economic milestones and presidential administrations. But just looking at average incomes is sloppy economic analysis.
What is a better indicator of tracking a worker incentives over time is the real wage. Real wages refers to wages that have been adjusted for inflation. Growth in real wages correlate with inflation, growth in productivity, and government spending.
As you can see in the link below from http://www.laborresearch.org/charts.php?id=8. Real Wages and working benefits are down 8.25% in the period of 1964 to 2004 for private nonfarm workers.
http://www.workinglife.org/wiki/Wages and Benefits: Real Wages (1964-2004)
What this means is that less of workers wages benefits are staying in the workers household.
The sad part is this would be great if these figures were representing income distribution at the higher income stratifications. But I fear if you were to add the change of real wages over time to income stratifications, that the lower income boundaries would have a steeper downward curve than that of workers in higher income boundaries.
Economic growth should benefit the population as a whole, either by direct income or by benefits such as health care. The US GDP has been growing at an annual rate of 4% or thereabouts. Furthermore, calculating wages without taking account of inflation has no meaning at all. I found that US statistical methods tend to cloud the issue and I am surprised that you are left to gather these highly relevant statistics yourself instead of getting them from an easily accessible public base. In Europe we use Eurostat and the OECD factbook, for Norway it’s ssb.no, Norway Statistics.
On poverty in Norway: Statistics show that the bulk of poor are either students or widows wthout personal accumulated pension rights, thus few are poor throughout life. By EU measure, setting poverty at 60% of average income, 11% of Norwegians are considered poor. By OECD measure, using a 50% level, the poverty rate is 4%. Due to the high average income, the poverty level in Norway is 50% higher than the EU average. The richest 10% shared 33% of all income 2006. Every 89th Norwegian is a dollar millionaire while the average net fortune of the entire population averages one million NOK. In the US the richer 1% share more than 21% of income (365 000 USD annual income each) while the poorer 50% share 12.8%. (US source: IRS). US authorities have fixed the poverty level at incomes below USD 19 400. Using the EU measure setting the national average at USD 63 000, 40% of Americans are poor.
I would love to see the figures depicting real income, divided by income class, using percentiles.
Hi,
Really nice. I am working on showing GDP in terms of “constant gold standard dollars”, basically, showing the charts as if the dollar was still under the gold standard. Take a look at: http://services.thebankruptcynews.com/blog/?p=110. I will check out how the income graph looks when using standard dollars and let you know.
1) Income without adjustment fro inflation is meaningless
2) anybody who is using government supplied inflation data obviously does not understand what he/she is doing
3) for a more detailed look at how US government mis-informs about inflation - check out
http://www.shadowstats.com
4) RE: Erik Khost comments :
a) Erik, you wrote : “Due to the high average income, the poverty level in Norway is 50% higher than the EU average.” - I suggest you re-read this sentence a few times and ask yourself what it means
b) you imply that equality of income is a good thing - maybe in a Russian Gulag - among free people, we
are happy with equality of opportunity
c) any economic analysis of Norway should have a big asterisk - Norway results can only be compared to other small countries sitting on large oil reserves -
Wait until Norway runs out of oil, give the population 20 years to eat the accumulated reserves,
then we can run comparisons with other countries
How about median income–not average? Average income is affected by the extreme rich. Median income would be more helpful and indicative of the state of earning in the US.
Great site, and very interesting info. I linked to you from our site, and just wanted to say thanks. Keep up the good work. I will check back often.
I think it would be interesting to see your poverty map and income inequality maps juxtaposed together.
Hi.
Good design, who make it?
I’m sorry if this is off-topic, but I need some feedback. Do you think extended auto warranties a good deal?
Thanks in advance for your input.
1957 to 2007 simple daily costs and where US Federal Minimum Wage would be today at same growth rate:
postage stamp .03 to .41 = 5.241% = $13.66
gasoline .24 to $3 = 5.062% = $12.50
bread .19 to $2.50 = 5.165% = $13.16
avg income $4,494 @ 5.156% avg = $58,863
I would like to ask for more information about the graph and what you came up with because I had planned on using this graph for a basis to wright a paper for class, and the information just isnt jumping at me. i understand the graph just fine and it does have good information but the paragraph doesnt really tell you anything.
Really nice graph! I liked that you priced it in nominal dollars, although gold-PPP dollars, real dollars, and Joules-PPP I also find interesting (Joules-PPP being based on average residential power costs. I plotted this once; it showed energy recesssions quite clearly. Perhaps due to being a scientist, I find treating a person’s income in Joules more meaningful than using meaningless units such as dollars.)