The Family Income Conundrum

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Paradoxically, real median family income is rising while real median weekly earnings are falling.

Last fall, the Census Bureau announced that real median family income had increased in 1995 for the second time in a row.

At the same time, the Bureau of Labor Statistics reported that the real median weekly earnings of full-time workers continued to decline. On its face, this apparent paradox is puzzling. How can wages be falling while income is rising?

The answer lies in the press-release details that often go unreported. In fact, the fine points of the family income report show that, while some American families are making gains, many others are losing ground. Economists posit that only increases in the labor force participation of women, income from other sources, and the number of full-time workers working at a second job have helped to keep the level of family income from falling across the board.

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