In 1967 55.5% of black households were middle income or high income while in 2019 it was 70.8%

See More charts and commentary on last week’s Census Bureau report on income by Mark Perry.

"The Census Bureau released its annual report last week on “Income and Poverty in the United States: 2019” with lots of new, updated data on household and family incomes, household demographics, and poverty statistics through 2019. I posted two reports on the new Census Bureau report last week on CD here and here. Below are some additional charts with commentary based on the new household income data through 2019.

1. Median Household Income, Average Household Size, and Income per Householder. The chart above shows: a) the percentage increase in median US household income (in constant 2019 dollars) since 1967, b) the average household size in each year from 1967 to 2019 and c) the percentage increase in median household income per household member since 1967.

The size of the average US household has declined steadily over time and fell to an all-time low last year of 2.52 members. That’s a decline of 0.76 household members since 1967 when the average US household size was 3.28 persons. On a percentage basis, that’s more than a 23% decline in the size of the average US household over the last 50 years. Obviously the shrinking size of the average US household distorts a comparison of median household incomes over time in different years that have different average numbers of household members. In economic terms, the ceteris paribus assumption of holding everything constant is violated since household size is not constant over time, but decreasing.

We can adjust for the declining average household size by calculating the real median household income per household member, which almost doubled from $14,615 in 1967 to $27,263 last year. Over that same period, inflation-adjusted median household income increased by 43.3% from $47,938 in 1967 to $68,703 last year. That’s quite a difference — the percent increase in median household income per household member since 1967 of 86.6% is almost exactly twice the percent increase in real median household income over the last half-century of 43.3%.

Bottom Line: Because the average size of a US household has steadily declined over time and reached an all-time low in 2019 of 2.52, the increase in real median household income since 1967 of 43.4% significantly understates the increase in real median household income per household member of 86.6% by a factor of two over the last half-century. The next time you hear politicians’ or the media’s false narratives about economic gloom and doom, declining living standards, and average Americans struggling to survive on stagnant wages, think about the fact that the real median household income per US household member has doubled over the last 50 years.

2. Annual Increases in Median Household Income. The top chart above shows the annual percentage increases in real median US household income from 1968 to 2019. The 6.8% gain in American’s median household income last year to $68,703 was the largest annual increase on record based on Census Bureau data starting in 1967. It was also about 10 times the average annual increase of only 0.72% over the last 52 years. The average annual increase of 3.02% during the 2017-2019 period was the second-largest three-year increase since 1968.

The bottom chart above shows the annual gains in real median income for black households in the US from 1968 to 2019. The nearly 8% increase last year was the largest gain on record for black median household income and was almost nine times the average annual increase of 0.90% over the last half-century.

Keep those remarkable household income gains in mind the next time you hear from politicians or the media about America’s economic gloom and doom, stagnating incomes, rising income inequality, stagnating wages, today’s young people being worse off economically than their parents…..especially for blacks, women, Hispanics, etc.

3. Income Shares for Black Households. The chart above displays the percent shares of black households by total money income for three income categories annually from 1967 to 2019: a) low-income black households earning $25,000 or less, b) middle-income black households earning between $25,000 and $75,000 and c) high-income black households earning $75,000 or more (all in constant inflation-adjusted 2019 dollars).

As I explained last week in reference to the data for all US households, the “black middle-class is disappearing” as we hear all the time, but it’s because middle-income black households in the US are gradually moving up to higher-income groups, and not down into lower-income groups as the mainstream media and leftists (but I repeat myself) would have you believe. In 1967, only 9.1% of black households in the US earned $75,000 or more (in 2019 dollars). In 2019, 29.4% of black households had moved up into that high-income category, a new record high. In other words, over the last half-century, the share of black households earning incomes of $75,000 or more (in 2019 dollars) has more than tripled as that share increased by 3.2 times over the last half-century! At the same time, the share of middle-income black households earning $25,000 to $75,000 (in 2019 dollars) has decreased over time, from 46.4% of black households in 1967 to 41.4% in 2019. Likewise, the share of low-income black households earning $25,000 or less (in 2019 dollars) has decreased from 44.5% of blac households in 1967 to only 28.7% of black households last year, a new record low.

In 1967, there were about five times as many low-income black households (44.5%) as high-income households (9.1%) but by 1993, there were only 2 times as many low-income black households as high-income households, Remarkably last year, due to ongoing increases in prosperity and economic gains for all Americans, there were more high-income black households (29.4%) than low-income households (28.7%) for the first time. Keep those noteworthy, significant income gains and rising prosperity for black Americans the next time you hear about how blacks in America are suffering economically under the Trump administration in a country infected with systemic racism, white privilege, etc."

Lee Jussim Is Right to Be Skeptical about ‘Stereotype Threat’

By Jonathan Church.

Rutgers University professor and social psychologist Lee Jussim recently posted a link on Twitter to a study that found “neither an overall effect of stereotype threat on math performance, nor any moderated stereotype effects”:

He did so in response to a Harvard University graduate student expressing surprise that there are people who think “stereotype threat” doesn’t exist:

Dr. Robin DiAngelo would also be quite surprised to hear such doubts. In her book, What Does It Mean to Be White? Developing White Racial Illiteracy, DiAngelo defines “internalized oppression” as “[t]he result of socialization in which members of a minoritized group are conditioned into their roles,” which “causes them to see themselves as naturally inferior to the relationally dominant group and less deserving of the resources of society.”

She cites the research of Claude Steele on stereotype threat. “Claude Steele’s work in stereotype threat,” DiAngelo writes, “demonstrates internalized oppression in action.” The idea is “that a person’s social identity as defined by group membership—age, gender, religion, and race—has significance in situations in which attention is drawn to that identity.” If this identity has negative stereotypes attached to it, then the person with that identity “will tend to underperform” because anxiety about that stereotype causes the person to “confirm the stereotype.” DiAngelo cites “a study in which black students were asked to identify their race before taking a standardized test.” In this study, the black students “consistently scored lower than black students who were not asked to identify their race before the test.” The scores “did not correspond with their previously identified abilities.”

“These results,” she writes, “have been consistent in many other studies Steele and his colleagues have conducted.” She then translates stereotype threat into social justice terms by calling it “internalized oppression”, a state “in which a person believes the negative information about their group and acts on it, fulfilling society’s expectations.” We are asked to “consider the beliefs many teachers hold about children of color and the role these beliefs play in children’s school performances.” The “[c]onstant focus on what is termed the achievement gap and pressure to perform on high-stakes standardized tests—or else!—surround these students and create a vicious circle.”

As is typical of her work, however, DiAngelo only considers the research that supports her theory. University of Chicago economist John List, on the other hand, found the theory eminently plausible but decided to test it anyway. In an interview with the Federal Reserve Bank of Richmond, he elaborates:

I believe in priming. Psychologists have shown us the power of priming, and stereotype threat is an interesting type of priming. Claude Steele, a psychologist at Stanford, popularized the term stereotype threat. He had people taking a math exam, for example, jot down whether they were male or female on top of their exams, and he found that when you wrote down that you were female, you performed less well than if you did not write down that you were female. They call this the stereotype threat. My first instinct was that effect probably does happen, but you could use incentives to make it go away. And what I mean by that is, if the test is important enough or if you overlaid monetary incentives on that test, then the stereotype threat would largely disappear, or become economically irrelevant.

List says that he and his team designed an experiment to test this theory, and found that they could not induce stereotype threat, no matter how hard they tried. His team would tell the test takers, “Women do not perform as well as men on this test and we want you now to put your gender on the top of the test.” List notes that “other social scientists would say, that’s crazy—if you do that, you will get stereotype threat every time.” But, contrary to expectations, it did not materialize. List maintains that priming works, but has concluded that “stereotype threat has a lot of important boundaries that severely limit its generalizability.”

So what explains the popularization of a theory this resistant to replication? “I think,” List says, “what has happened is, a few people found this result early on and now there’s publication bias.” He continues:

…when you talk behind the scenes to people in the profession, they have a hard time finding it. So what do they do in that case? A lot of people just shelve that experiment; they say it must be wrong because there are 10 papers in the literature that find it. Well, if there have been 200 studies that try to find it, 10 should find it, right? This is a Type II error but people still believe in the theory of stereotype threat. I think that there are a lot of reasons why it does not occur. So while I believe in priming, I am not convinced that stereotype threat is important.

Thoughtful consideration of type I and type II errors (also known as false positives and false negatives, respectively) is not something you are going to find much of in radical contemporary theorizing about race. As I have written here and here, this kind of thinking falls prey to the pitfalls of any hypothesis that disdains statistical analysis. “[M]any critical race scholars,” the authors of one paper note, “are fundamentally skeptical of (if not simply opposed to) quantitative data and techniques to begin with.” Of course, this doesn’t mean that statistics provide a highway to truth. But statistics do offer robust tools with which we can test whether or not claims hold up against evidence. As I have stated before, “one of the strengths of the scientific method is that its emphasis on methodological rigor is a robust defense against any presumption of infallibility.”

None of this is to say whether one side or the other is definitively right, of course. But Professor Jussim is surely right to be skeptical about stereotype threat. As a review of the literature notes, “Two decades of research have demonstrated the harmful effects that stereotype threat can exert on a wide range of populations in a broad array of performance domains. However, findings with regards to the mediators that underpin these effects are equivocal.” In other words, even if there is correlation between stereotype threat and measures of performance, the causal relationship is far from being well understood, and may simply not be there.

Di Angelo’s writing about stereotype threat, white fragility, structural oppression and so on, on the other hand, is more like dogma than scientific theory. So it is not surprising that she considers only the evidence that confirms her a priori view of how racism works, rather than conflicting evidence that might give her pause for further reflection. If the popularity of the concept of “stereotype threat” is simply a product of publication bias, it may not be clear evidence—or indeed any evidence at all—of “internalized oppression.”

 Jonathan Church is a government economist, CFA charter holder, and writer whose work has appeared in Areo, Arc Digital, Merion, Agonist Journal, Good Men Project, and other places."