U.S. Incomes Are Falling ... Nope, They're Not

In US News & World Report, James Pethokoukis writes:

“More Americans making ends meet with less money,” was the headline atop a Boston Globe story Tuesday morning. The newspaper went on to tell its readers that Americans in 2005 earned a smaller average income, when adjusted for inflation, than in 2000, $55,238 vs. $55, 714.

What the story notably failed to tell readers is that incomes have been on the rise since 2002, a fact I gleaned from a different version of the story on the New York Times website. (The original version of the Times story had a misleading headline “Average Incomes Fell for Most in 2000-05,” but it was later changed to “2005 Incomes, on Average, Still Below 2000 Peak.” The Globe story also said that Americans’ total income in 2005 was $7.43 billion. I’m pretty sure it’s “trillion,” not “billion.”)

It might have also been nice had either story mentioned the great likelihood that the Internal Revenue Service data the newspapers relied on will show further income gains for 2006 and 2007, given the state of the economy and the continuing rise in real wages. I would have also liked to have the seen the two stories give a nod to the fact that government numbers tend to overstate inflation, and thus real incomes probably did even better than the official numbers show. How about this for a fair headline: “Incomes Grow for Third Straight Year, Though Still Below 2000 Peak”?

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