Comments on: Average Income in the United States (1913-2006) http://www.visualizingeconomics.com/2008/05/04/average-income-in-the-united-states-1913-2006/ Making the "Invisible Hand" Visible Wed, 07 Jan 2009 12:21:23 +0000 http://wordpress.org/?v=2.3.3 By: Beginner Basics of Affiliate Marketing - 5 Star Affiliate Blogs http://www.visualizingeconomics.com/2008/05/04/average-income-in-the-united-states-1913-2006/#comment-29161 Beginner Basics of Affiliate Marketing - 5 Star Affiliate Blogs Mon, 15 Dec 2008 15:07:32 +0000 http://www.visualizingeconomics.com/2008/05/04/average-income-in-the-united-states-1913-2006/#comment-29161 [...] at least an average income is very common for the “20″ that do well in AM. A six figure income per year for an [...] […] at least an average income is very common for the “20″ that do well in AM. A six figure income per year for an […]

]]> By: Will http://www.visualizingeconomics.com/2008/05/04/average-income-in-the-united-states-1913-2006/#comment-27186 Will Sun, 09 Nov 2008 08:31:22 +0000 http://www.visualizingeconomics.com/2008/05/04/average-income-in-the-united-states-1913-2006/#comment-27186 This graph has been adjusted for inflation and does look to be a mean distribution. Using any of mean, median, or mode and calling it an average is considered acceptable in statistics. The use of a mode wouldn't be the best for data like this. The use of a median will slightly misrepresent the population as a whole since you cannot get back to GDP with it. And the use of a mean will accurately represent the population as a whole yet will be higher than your perceived expectations due to outliers. If this graph used nominal prices it would be more of a display of inflation rate, rather than one of economic growth which requires the usage of real (real means corrected for inflation) values. Here's a graph showing the difference. http://upload.wikimedia.org/wikipedia/en/f/f4/Historic_gasoline_prices.png Pat, the numbers from the graph correspond very well to the numbers you gave. Using the inflation calculator already provided by another in the comments, "What cost $3000 in 1954 would cost $21016.46 in 2004." I chose '54 because it's an easy line to use and 2004 because it's the last on the graph. The graph average from '54 appears to be $27k-28k. "What cost $7000 in 1963 would cost $43079.77 in 2004." The graph average from '63 looks to be $32k-33k. And you already stated you were making an above average pay. I would say you were doing extremely well right out of college and not just "above average". This graph has been adjusted for inflation and does look to be a mean distribution. Using any of mean, median, or mode and calling it an average is considered acceptable in statistics. The use of a mode wouldn’t be the best for data like this. The use of a median will slightly misrepresent the population as a whole since you cannot get back to GDP with it. And the use of a mean will accurately represent the population as a whole yet will be higher than your perceived expectations due to outliers.

If this graph used nominal prices it would be more of a display of inflation rate, rather than one of economic growth which requires the usage of real (real means corrected for inflation) values. Here’s a graph showing the difference.
http://upload.wikimedia.org/wikipedia/en/f/f4/Historic_gasoline_prices.png

Pat, the numbers from the graph correspond very well to the numbers you gave. Using the inflation calculator already provided by another in the comments,

“What cost $3000 in 1954 would cost $21016.46 in 2004.”
I chose ‘54 because it’s an easy line to use and 2004 because it’s the last on the graph. The graph average from ‘54 appears to be $27k-28k.

“What cost $7000 in 1963 would cost $43079.77 in 2004.”
The graph average from ‘63 looks to be $32k-33k. And you already stated you were making an above average pay. I would say you were doing extremely well right out of college and not just “above average”.

]]> By: Pat Klaus http://www.visualizingeconomics.com/2008/05/04/average-income-in-the-united-states-1913-2006/#comment-27143 Pat Klaus Fri, 07 Nov 2008 18:06:36 +0000 http://www.visualizingeconomics.com/2008/05/04/average-income-in-the-united-states-1913-2006/#comment-27143 I don't know how these figures have been adjusted, but they do not reflect anywhere close to the actual incomes at the time. I was born in 1939. My family was an "average" family as I grew up and their annual income was under $3000 in the 50's for sure. In 1962 I graduated from college with an engineering degree and earned a salary of $7000 a year which was above average. Is there a chart that shows median US income over time, but in raw terms, and inflation adjusted? This chart as presented does not reflect reality for me. I don’t know how these figures have been adjusted, but they do not reflect anywhere close to the actual incomes at the time. I was born in 1939. My family was an “average” family as I grew up and their annual income was under $3000 in the 50’s for sure. In 1962 I graduated from college with an engineering degree and earned a salary of $7000 a year which was above average.

Is there a chart that shows median US income over time, but in raw terms, and inflation adjusted? This chart as presented does not reflect reality for me.

]]> By: jacob da bomb http://www.visualizingeconomics.com/2008/05/04/average-income-in-the-united-states-1913-2006/#comment-26905 jacob da bomb Wed, 29 Oct 2008 18:45:38 +0000 http://www.visualizingeconomics.com/2008/05/04/average-income-in-the-united-states-1913-2006/#comment-26905 jacob owns this page sarah and hanah are dummies jacob owns this page sarah and hanah are dummies

]]> By: Redistributing the Wealth http://www.visualizingeconomics.com/2008/05/04/average-income-in-the-united-states-1913-2006/#comment-26413 Redistributing the Wealth Sun, 19 Oct 2008 16:09:57 +0000 http://www.visualizingeconomics.com/2008/05/04/average-income-in-the-united-states-1913-2006/#comment-26413 [...] you consider the entire United States, the average income appears to be well below the $250,000 cut-off that Barack Obama has proposed.  A whopping ninety-eight percent of American [...] […] you consider the entire United States, the average income appears to be well below the $250,000 cut-off that Barack Obama has proposed.  A whopping ninety-eight percent of American […]

]]> By: tourist information http://www.visualizingeconomics.com/2008/05/04/average-income-in-the-united-states-1913-2006/#comment-26234 tourist information Thu, 16 Oct 2008 06:58:40 +0000 http://www.visualizingeconomics.com/2008/05/04/average-income-in-the-united-states-1913-2006/#comment-26234 <strong>tourist information...</strong> I’ ll make a deposit in that Swiss Bank account, Nyte. Do you prefer US Dollars, or gold bullion in case the stockmarket crashes?... tourist information…

I’ ll make a deposit in that Swiss Bank account, Nyte. Do you prefer US Dollars, or gold bullion in case the stockmarket crashes?…

]]> By: Obama to plumber: My plan will 'Spread the wealth around' - Page 6 - IH8MUD™ Forums http://www.visualizingeconomics.com/2008/05/04/average-income-in-the-united-states-1913-2006/#comment-26165 Obama to plumber: My plan will 'Spread the wealth around' - Page 6 - IH8MUD™ Forums Tue, 14 Oct 2008 18:06:08 +0000 http://www.visualizingeconomics.com/2008/05/04/average-income-in-the-united-states-1913-2006/#comment-26165 [...] This is such a deceiving chart. If we had a proper money supply it'd actually be worth something. Average Income in the United States (1913-2006) at Visualizing Economics [...] […] This is such a deceiving chart. If we had a proper money supply it’d actually be worth something. Average Income in the United States (1913-2006) at Visualizing Economics […]

]]> By: Richard http://www.visualizingeconomics.com/2008/05/04/average-income-in-the-united-states-1913-2006/#comment-25511 Richard Tue, 07 Oct 2008 16:37:06 +0000 http://www.visualizingeconomics.com/2008/05/04/average-income-in-the-united-states-1913-2006/#comment-25511 It is disturbing to me, having been Googling for "average household income" that <i>median</i> incomes are routinely presented as averages. It seems to me that income data would be heavily skewed towards the low end of the scale ...a Poisson Distribution. This suggests that the average income would be much lower than the median income. I think the use of median incomes misrepresents incomes as being comfortingly high. I agree with several commenters, that the information in the otherwise excellent graph would be more useful if presented a) as a function of purchasing power and, separately, b) in constant dollars. It is disturbing to me, having been Googling for “average household income” that median incomes are routinely presented as averages. It seems to me that income data would be heavily skewed towards the low end of the scale …a Poisson Distribution. This suggests that the average income would be much lower than the median income. I think the use of median incomes misrepresents incomes as being comfortingly high.

I agree with several commenters, that the information in the otherwise excellent graph would be more useful if presented a) as a function of purchasing power and, separately, b) in constant dollars.

]]> By: Grote economische grafieken verzamelpost - Sargasso http://www.visualizingeconomics.com/2008/05/04/average-income-in-the-united-states-1913-2006/#comment-25395 Grote economische grafieken verzamelpost - Sargasso Sun, 05 Oct 2008 11:56:54 +0000 http://www.visualizingeconomics.com/2008/05/04/average-income-in-the-united-states-1913-2006/#comment-25395 [...] Gemiddelde inkomen van Amerikanen in de periode 1913-2006. Van de altijd zeer interessante site Visualising Economics. [...] […] Gemiddelde inkomen van Amerikanen in de periode 1913-2006. Van de altijd zeer interessante site Visualising Economics. […]

]]> By: Ronald Hietala http://www.visualizingeconomics.com/2008/05/04/average-income-in-the-united-states-1913-2006/#comment-24171 Ronald Hietala Sat, 06 Sep 2008 00:50:10 +0000 http://www.visualizingeconomics.com/2008/05/04/average-income-in-the-united-states-1913-2006/#comment-24171 Dear John, Someone who made $100 to $125 a week in 1913 was quite wealthy. In the day of the $500 car, that would have been enough to buy a new Ford every month. Buying a new Ford every month today would cost about $200,000 a year. Are you sure it wasn't $100 to $125 a month? That would have been more typical. Also, I am pretty sure the graph is in constant dollars. When I got out of college in 1967, starting pay for a college graduate was around $5000 a year. The graph shows around $40,000 a year in 1967. Dear John, Someone who made $100 to $125 a week in 1913 was quite wealthy. In the day of the $500 car, that would have been enough to buy a new Ford every month. Buying a new Ford every month today would cost about $200,000 a year. Are you sure it wasn’t $100 to $125 a month? That would have been more typical.
Also, I am pretty sure the graph is in constant dollars. When I got out of college in 1967, starting pay for a college graduate was around $5000 a year. The graph shows around $40,000 a year in 1967.

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