Thursday, December 11, 2014

T or F? US Incomes Have Declined Over the Last 10 Years Even Though Workers Are Working Longer Hours

False.  While it may be true that real US household incomes have declined since the early part of this century, the fact is that US workers are working less hours per week, not more.  Economist Mark Perry explains in his excellent Carpe Diem blogpost on this topic:
In a recent Real Clear Markets op-ed (“The Obvious Reason for the Decline In Median Income”), economist Jeffrey Dorfman points out another very important demographic change that has significantly contributed to the decline in real median household income in the US over the last decade: the average number of hours worked per US household has been declining. So we would naturally and logically expect median and mean household incomes to decrease when average household work hours are falling.