A thought about median income

Mitt Romney may mislead the public by citing a statistic that many people will misinterpret. He is mentioning the decrease in median household income during the Obama administration.

Source: CATHERINE RAMPELL in Economix Blog

Apparently Mitt Romney has been commenting on the lower median household income in the United States following Obama's assuming office. The data are shown above. Actually the budget for the first year in office of any president is determined by the Congress acting on the budget proposals of his predecessor. The graph shows that median income has in fact being increasing modestly since the Obama programs to mitigate the recession took hold.

Source: Work Exposed The Blog

The second graph, which only tracks employment to 2010, shows that there was a significant drop in employment in the Great Recession, with unemployment beginning to top out in 2010. Unemployment rates of course have been dropping since 2011.

When people lose their jobs, their household income goes down. Thus some households find their income, which had been above the median, falling below that median due to a job loss. Remember, the median is the point in which half of households have more and half have less than the median income. Thus, a household falling below the median means that the median also falls by a tiny amount. Seven million jobs lost means a lot of households falling from above to below the 2007 median, and thus a significant drop in the median household income. Of course, there may have been a drop in the pay received by the folk who kept their jobs, but I would guess that the drop in median household income is mainly due to the high level of unemployment -- a problem that we are slowly overcoming.

Source: Center on Budget and Policy Priorities

This third graph shows that there has been very little increase in the family incomes for the poor since the Reagan revolution (started when Ronald Reagan took office in 1981), and indeed, not much increase for the lower middle class. Republican policies have economically benefited mostly the top few percent of the population. Of course, Romney is not going to be showing how bad Republican policies have been for the majority of American voters.