Americans' Earnings Are on the Rise ... Sort Of

Americans' Earnings Are on the Rise ... Sort Of

In the last three years, median household income has jumped 3.8%—reaching $53,981 this June.

That's cause for celebration, right? After all, Americans seem to be bringing home (slightly) bigger paychecks.

Well, not quite. Though a new report by Sentier Research does find that household earnings have made some progress in recent years, there's a catch.


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The reality is that, when you adjust for inflation, middle-income Americans are actually making less than they did back when the economic recovery first started: In June 2009, median household earning was as much as $55,589 in inflation-adjusted dollars—close to $2,000 more than it is today.

As Neil Irwin writes in the New York Times, this means that the purchasing power of the average American family is now 3.1% less than it was five years ago. So it's no shocker that many middle-class Americans are still feeling pretty pessimistic about the economy.

There's another reason why reality isn't quite meshing with happy headlines about the economy on the mend: Many celebratory stats—like total household net worth hitting record highs this year—can be misleading. That's because while total numbers have grown over the last few years, these stats can often obscure the fact that the bulk of economic gains have gone to upper-income Americans.

Bottom line? We probably still have a ways to go before the typical family feels like we've reached recovery.

Feeling pinched by your own paycheck? Learn how to budget smartly with LearnVest's one-number strategy.


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