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:
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?