Do You Make More Money Than You Did 6 Years Ago?

Nine days ago we asked a pretty basic question: are you better off than you were 6 years ago?

Our unscientific survey in the comments section revealed quite a few folks with greatly increased net worth.  Our statistic, as well, reflected that the country has gotten richer in aggregate – namely, we went from $68,056,600,000,000 to $70,349,120,000,000 in total net worth.  $70 trillion?  Not too shabby.

Of course, as commenters pointed out, net worth isn’t the whole story.  Today, we take a look at another chapter in the book.

Let’s Talk About Real Disposable Personal Income Per Capita, Baby

The Bureau of Economic Analysis publishes a monthly figure for real disposable income per capita.  Admittedly, there is a lot going on in the number – let’s break it down.

  • ‘Income per capita’ – This is a statistic we all know and love – the mean income of people in the United States.
  • ‘Real’ – This factor simply means that our numbers are adjusted for inflation – this statistic is normalized to the value of a 2005 dollar.
  • ‘Disposable’ – This factor means that a person can either “spend it or save it”.  The BEA calculates personal income and removes taxes, meaning that our statistic is the leftover.

Make sense?  Good.  Here’s the roller coaster ride we’ve seen over the last few years:

Real disposable income per capita

First, the spike – we discussed the temporary spike we saw before tax rates spiked this year.  In December, shifting forward of income led to $34174 in 2005 dollars in disposable income – not too shabby.  We’ve settled down a bit to $32875 in the most recent reading (May).

I pulled this graph from the St. Louis Fed.

Do You Make More Than in 2007?

So, you’ve either got more assets or less debts than you did six years ago – how about in the disposable income department?

If you’re anything like the common (wo)man, you’ve actually lost some income since 2007.  Real disposable income peaked at $34641 back in May of 2008 and hasn’t yet climbed back to that peak.  On the bright side, however, is this fact: real DPI has increases month over month since January of this year.

So, let’s talk about your income over the last few years.  Has it increased?  I’ll go first: I make more money, inflation adjusted, at my job than I did in 2007/2008.  I also, of course make more money from this humble site – it didn’t exist for 11 months after we hit our peak, haha.

How do you compare to 2007/2008?


    • says

      Haha, yeah, a technicality. You’d do worse on this measure, but overall you’d be better off. And, hey, your blog is bigger now – that’s worth something, right? (A bigger soapbox)

  1. krantcents says

    Although I make more mathematically, it is less thanks to inflation. It is one of the shortcomings of teaching. I do not receive merit increases or CPI. The last 3 years, we sustained furlough days on top of it. I am not complaining because I chose this career.

    • says

      Sorry to hear that – although I know that since you’re a successful PF writer you didn’t let that affect your bottom line. Hopefully 2H 2013 and 2014 are stronger!

  2. wealthinformatics says

    Personally, I make a LOT less than what I made in 2007. Less as in it is not even comparable. I made close to six figures, now I am a full time volunteer taking care of special needs kids for free. So yeah.. great improvement financially :)

    But as a household, we are making slightly higher than what we made in 2007 (great planning on my part to marry someone who would make up for my salary lol).

    Disposable income wise, again, we are worse than 2007 due to adding a house and my ~$3000 worth of medical expenses every month.

    • says

      I’d say that volunteering and charity pays a special dividend other industries can’t match! (On another note – I guess that same would apply to retirees.)

      As a household, I now have a wife, haha. With that income we’re definitely doing better than 2007.

      So… the medical expenses will let up now (re: your email 6 days back), or will they continue? I hope it was temporary!

  3. freeby50 says

    Well I got a promotion in 2008 and the past couple years our bonuses have paid a lot better than they did in 2007-2009 so yes my income is up pretty well in real terms since 2007. My base salary is up just a little over inflation since ’07 and thats only due to that promotion. This year our bonuses probably won’t be as good so I expect lower income in ’13 than in ’12 by a little.

    • says

      And still on track to be Free by 50?

      I think my 2013 is shaping up to be a bit smaller on the bonus front as well, but we’re what – only 7/12 done? Got my fingers crossed on the rest of the year (we promote/raise in Q2).

  4. Andy Hough says

    I will definitely make more this year than I did six years ago, even accounting for inflation. Since I was in law school six years ago and am now an attorney it would be kinda bad if I didn’t make more.

  5. The College Investor says

    I definitely make more now than I did in 2007/2008. But it’ relative – I was still getting my MBA, didn’t have a side business, etc… However, I’ve found tons of opportunities since 2007/2008.

    • says

      Blogs may have started in roughly 2000, but since 2007/8 it’s been the golden age for the internet entrepreneur, eh? I don’t mind stamping that label, even with my status as a day-jobber.

  6. says

    Nope. Laid off the job; couldn’t get a new job for love nor money. Couldn’t even get hired to drive the tourist train at the zoo, to say nothing of into a job comparable to what I was doing. Gave up looking. Now am scrabbling by on Social Security and adjunct teaching.

    Adjunct teaching, BTW, pays $2400 per semester…and that’s at a school that pays relatively well. My former associate editor is earning $1200/course “teaching” fake courses for the University of Phoenix.

    • says

      Wait. Actually, I take that back.

      While I was working for the Great Desert University, I earned about $30 an hour — but had excellent, low-cost health insurance. Now I earn about $60 an hour as a contract editor, and also have decent relatively low-cost health coverage (Medicare, which costs approximately 10 times what I paid for comparable coverage through the university). So, on an hourly basis I earn twice as much as I did, but engineering 40 hours of work a week, 52 weeks a year is out of the question. In terms of dollars to put food on the table, I earn a tiny fraction of what I used to bring home.

      • says

        Completely fair, especially since that measure is overall income after taxes (and, well, inflation).

        Not everyone wants to shoehorn themselves into the whole 4-Hour Workweek thing, especially when they don’t make 4-figures an hour. I started to touch on that in the Photography article – there aren’t always enough hours to go around.

        Thanks for sharing – I hope you’re soon able to pick up some more hours at GDU or another school, and grab a full time professorship (and, tenure!).

  7. says

    “Going back to the graph – does it mean that for a family of 5 there is $ 170 K to spend?” – no, not with a labor force participation rate in the lower 60s. You’d be looking for a household income in this case – this would only apply to individual members.

    Hey, equal savings over 6 years isn’t a bad thing if you started at a high enough point!

  8. says

    I make about 2.5 times more than back in 2007 when I started my last corporate job. Thank goodness for passive (and online) income. It was a bit hard to calculate as back then I earned most income in GBP that was $2 and Euro that was around $1.5, now a good chunk is USD.

    Many of my classmates from business school are still making about the same as 6 years ago, although mid 20s to mid 30s should be the time where you have the biggest increase in earnings.

  9. says

    Hard to say. I made $65,000 in 2007 but since then, I have been working less than 50% of the time, with an average salary of about $75,000 a year.

    I do make more money… but only if I actually take contracts and work instead of lazing around all day and traveling 😛

    In comparison to my wage per hour, yes. I made about $33.50/hour in 2007 and now I charge at a minimum $100/hour – $150/hour.

    • says

      In retrospect, perhaps this article would have been smarter adjusting for people who willingly or unwillingly work shorter hours now? A future piece? The gears are turning.