Regarding family size you need to read the study, not the article. They took the drop in family size from 1979 until now and used that as a factor to show “per person” family income rising.
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JTOSU
Ranger
I can't say I consumed the study with much vigor, but I did skim it. Family size does play a factor, but it absolutely SHOULD play a factor. Adjusting for family size is not a trick to hide stagnation. If the study, or any similar research, did NOT adjust for family size, it would be treating a single-person living in a luxury condo the same as a family of six struggling to buy groceries on the same salary. By adjusting for the fact that families are smaller today, the researchers are acknowledging that disposable income has increased. To ignore this would be to ignore a massive increase in the standard of living for the individuals within those households.
I think an interesting debate is whether "total compensation" is fair for comparison. As this study utilizes the rise of 401K matches along with employee sponsored health insurance. I think that is a better comparison than just pre-tax cash wage comparisons, but can certainly understand the argument against.
The reason this study is intriguing to me is it supports a debate on this forum two months ago. That debate was the definition of a basic standard of living has moved so far up that yesterday’s luxury is, for some, today’s necessity.
Polds4OSU
Marshall
Well I would say that it is posted in the wrong thread then. You made a claim that Talarico was a mini Bernie and used that article as your evidence
It isn't a matter of all-or-none on the effect of family size. It is the fact that they made an adjustment, but did not give any validation of their "family of three" modeling. They did not give the percentages without the modeling so that we can see the impact. We can't know if the modeling is A factor or THE factor.
The other side of the debate is that "luxury" items from 1979 are now cheap, making it appear we are wealthy. My daughter has her own computer, her own flat screen TV, and her own phone. She is about to rent her own apartment for the first time. But I still pay her astronomical insurances.
When I was her age, I had just bought my first TV after saving up for half a year. I had none of the other items. But, I bought my own house and could easily afford my own insurance.
Your last sentence could be "yesterdays luxury is today's necessity but yesterday's staple is today's luxury."
Polds4OSU
Marshall
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JTOSU
Ranger
It is fair to want a stress test of the data. However, other studies, like the one done by Pew Research show the direction remains the same.
The reason they use a family of three model isn't to hide anything; it’s because comparing a 1979 household to a current household without adjusting for size is actually less accurate. If you have two neighbors both making $100k, but one has four kids and the other has none, saying they are in the same economic class doesn't reflect their actual lives. Furthermore, it appears the study does utilize the government's own validated family of three model and the study uses recognized standards for what different family sizes need to survive. It was not arbitrary.
This reflects a real-world change. Americans are choosing to have fewer children and, as a result, have more disposable income per person. That is a form of becoming wealthier, even if it's achieved through household choices rather than just hourly raises.
IMO, the study’s bigger point isn't just about family size. Politicians that wade into class warfare say the middle class is shrinking. But if everyone in the country got 50% richer tomorrow, that definition would show the middle class stayed exactly the same size. This report shows that if you pick a fixed standard of living, way more people have cleared that bar today than they did 45 years ago. Whether you adjust for kids or not, the floor of the American lifestyle has risen.
I’ll admit I stopped reading after the 1st paragraphs and chart.
In 1979 the average US household annual expenditure was less than 50% of annual income. Today that number is around 75%.
In 1979 housing was less than 15%. Today that number is around 25%.
Healthcare 2.5 vs 6.
Food 7.75 vs 10.
We earn more but we spend more. And I chose those 3 bc Maslow.
But you have your own computer, cellphone and multiple TV's!!1!!1!1
That is pretty much the "let them eat cake" of the 21st century. People are angry because the necessities of life, the things we need to survive are unaffordable. Iphones are cool, but they are not edible. TV is nice, but if you are rent trapped due to algorithmic pricing and blackrock buying every 4th house on the market, you are not "thriving". If you are one of the 600k people that go bankrupt due to medical bills this year, some anecdote and doctored data on how you are so much better off than someone in 1970 is going to ring hollow.
The irony of this situation is that the people that try to deny these realities are the same people that are going to make it worse and deeper.
That is pretty much the "let them eat cake" of the 21st century. People are angry because the necessities of life, the things we need to survive are unaffordable. Iphones are cool, but they are not edible. TV is nice, but if you are rent trapped due to algorithmic pricing and blackrock buying every 4th house on the market, you are not "thriving". If you are one of the 600k people that go bankrupt due to medical bills this year, some anecdote and doctored data on how you are so much better off than someone in 1970 is going to ring hollow.
The irony of this situation is that the people that try to deny these realities are the same people that are going to make it worse and deeper.
Housing, education, and healthcare are the big three that have squeezed the lower class for a couple decades now. I don't think it's a coincidence that these are the most heavily regulated. The politician who actually gets serious about tackling the affordability of these will have my support. But everyone, including Bernie and AOC, have been all talk.
Also, I have to push back on the bolded part. This is a false narrative. First of all it's Blackstone that buys properties. Secondly, the institutional owners of single family units are now net sellers and never owned more than around 6% of supply. The report that came out a few months ago saying something like "one group has purchased 25% of all single family homes" was talking about people who own 1 to 10 units. Mom and pop landlords.
JTOSU
Ranger
To be clear,
* Institutional investors account for about 1% of the home buyer market https://www.realtor.com/research/corporate-investors-march-2026
* Medical expense related bankruptcy: This has actually dropped significantly over the last 20 years. It has dropped from over .35% of the population to .11% of the population in 2023.
Not saying those are not issues. Because they certainly are for people with large medical bills or for those that live in an area with more concentrated institutional purchases. But as a rebuttal of anecdotal evidence to push back against the AEI study, I don't see they are very impactful.
They did not give the unadjusted data. How can you possibly know the reason? How can you possibly know which is more accurate without seeing the unadjusted data and the validation of the method of adjustment?
JTOSU
Ranger
I do think it is fair to wonder about the data, so I did a little more than skim the study and the data than I had previously. The study does utilize the US Census Bureau's CPS data for their data. Looking at the unadjusted median household income from the Census, it has risen from about $58K in 1979 to about $75K today (inflation adjusted). So, even without the family of three math, the middle class still grew income-level vs inflation. The AEI’s adjustment just takes that $17k gain and boosts it further because that money is being shared by fewer people. It's not creating growth out of thin air; it's magnifying growth that is already there in the raw Census.
The debate isn't whether people are getting richer—the raw data confirms they are. The debate is just how much richer. Is your skepticism that they are getting richer at all, or just that the AEI is overstating the speed of that climb by using the family-size adjustment?
US Federal revenues for 1979 were around $450B.
US Federal revenues for 2025 were north of $5T.
Wow!!! We are so much better off. Look how rich our govt is.
We absolutely have an economic system that advantages high net worth individuals and corporations. Wonder why they fight so hard to not just keep those advantages but to expand them?
If you spend more money to keep these advantages than you pay in taxes or are benevolent with then we have a broken system.
I disagree that Bernie and AOC are all talk, its that the majority of congress is all talk (some don't even give us that). A couple senators and house reps are not going to move the ball forward in an appreciable way. To think otherwise really isn't grappling with how our system has previously been structured or currently is comprised. We have the weakest legislature in US history combined with the strongest executive branch. That isn't a setup where a couple members of that legislature can make a difference, especially when they aren't even in leadership positions of that branch.
That is fair to call out the blackrock/blackstone piece. The purchase patterns are still problematic thought, and while it is *better* that it is people with less than 11 properties or less comprising the majority of the purchases over hedge funds, it is still a major problem due to these buyers denying others the chance to own a home.
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Polds4OSU
Marshall
What does the median tell you about the distribution?
My skepticism is in the fact that this does not match what we see and feel. Why? When numbers don't match the expected, you look for placs that the numbers can be fudged/errored. Sure, it is possible that the perception is wrong, but that is less likely typcially. Like when you see a study that shows "Beer is a great pre-workout drink." Mostl likely there is a statistical flaw, but maybe there could be truth.
If we are wealthier and everything is less expensive relative to then why are there so many struggling? I don't remember tent cities of homeless people. I remember TV shows about the waitress or the 9 to 5 worker just getting by. Not the waitress or 9 to 5 worker needing to Uber and DoorDash on the side to get by.
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