How Media Misuse Income Data
Far from using their intellectual skills to clarify the distinction between statistical categories and flesh-and-blood human beings, the intelligentsia have instead used their verbal virtuosity to equate the changing numerical relationship between statistical categories over time with a changing relationship between flesh-and-blood human beings ("the rich" and "the poor") over time, even though data that follow individual income-earners over time tell a diametrically opposite story from that of data which follow the statistical categories which people are moving into and out of over time.
The confusion between statistical categories and human beings has led to many claims in the media and in academia that Americans' incomes have stagnated or grown only very slowly over the years.
For example, over the entire period from 1967 to 2005, median real household income — that is, money income adjusted for inflation — rose by 31%. For selected periods within that long span, real household incomes rose even less, and those selected periods have often been cited by the intelligentsia to claim that income and living standards have "stagnated." Meanwhile, real per capita income rose by 122% over that same span, from 1967 to 2005. When a more than doubling of income is called "stagnation," that is one of the many feats of verbal virtuosity.
The reason for the large discrepancy between growth rate trends in household income and growth rate trends in individual income is very straightforward: The number of persons per household has been declining over the years (see charts above).
Despite such obvious and mundane facts, household or family income statistics continue to be widely cited in the media and in academia — and per capita income statistics widely ignored, despite the fact that households are variable in size, while per capita income always refers to the income of one person. However, the statistics that the intelligentsia keep citing are much more consistent with their vision of America than the statistics they keep ignoring."
MP: The charts above illustrate Dr. Sowell's argument, and show that once adjusted for the fact that average housesold size has been decreasing over time, real median income per household member (per capita) reached an all-time high in 2007.