Just last week, the Census Bureau released its annual study of household incomes, poverty and health insurance -- often called the nation's "economic report card." Its hard numbers seemed to confirm how many Americans feel. Sure, we're prosperous, but prosperity is fraying. Except for the rich, living standards are stagnant. Poverty is up; health insurance coverage is down. Naturally, both Barack Obama and John McCain seized upon the report to claim that their policies would restore progress.
Superficially, the conventional wisdom seems convincing. The Census Bureau found that median household income in 2007 was $50,233. Though up 1.3% from 2006, that was still less than the peak of $50,641 in 1999. But Census counts only money income -- wages, salaries, dividends, interest payments - and compensation growth is increasingly channeled into fringes.
MP: As the chart above shows, real compensation per hour (BLS data here) for the business sector, although flat recently, has increased by almost 9% since 2000. In other words, after taking into account fringe benefits, the average worker is 9% better off today in real terms than in 2000, even though the Census data shows a slight decline in real median household income since 2000.