US Median Income

But the same is true for the pre-1980 growth. So this number does NOT understate that growth of median income has declined after mid-1970s.

Over the 1980-2014 period CPI probably does not fully account for quality improvements or for the value of new goods (e.g., the smartphone.)
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I think it's more likely than not given secular improvements in healthcare, longevity, technology, and air quality.

There are gains in health etc. not measured in earnings but also psychological costs of growing inequality and a sense of disappointment.

Have to factor in changes in transfers, changes in household size, changes in labor force participation and CPI bias.

Likely true, but it not hard to construct arguments that contradict it. For many groups, health is getting worse.

Other relevant factors would be: time spent commuting, increase in % of 25-53 employed, hours worked, hours connected to work email at home

"Understates" yes, "substantially" I revert to uncertain.

so much of our day is spent doing things that didn't exist back then that it's hard to believe the #s fully account for new products

CPI bias is important even w that in mind, 9% seems a small gain over 35 years & i THINK median family is working many more hours

Lots of real growth in the top deciles and the bottom deciles. Not so clear at the median.

Iphones weren't available then suggesting understatement. But both partners often work, which is stressful. This suggests overstatement.

Depends how "better off" defined. Technology (eg smartphones), medical services, lower crime, etc have increased quality of life broadly.

No one I know would rather face the 1980 bundle of goods (at 1980 prices) than current bundle, at anywhere near the same incomes.

The rise in life expectancy alone is worth on the order of 1% per year.
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Difficult question, but life expectancy is up from 74 to 79 years - seems like a substantial gain not reflected in real median income.

Due to measurement issues e.g. prices, family composition, measures of income, prob understates by >1% py. Add to that price quality bias.
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Yes, because it misses many innovations, but at the same time the upper end of the income distribution is extraordinarily better off.

Burkhauser et al. (2011) show faster growth in median post-tax, post-transfer size-adjusted household income including health ins. benefits.

The official indices and deflators undervalue quality change and new goods. A small annual bias makes a big difference over 30+ years.

CPI has improved but is imperfect. Capital income matters, especially for retirees. Mean household size has shrunk from around 3.3 to 2.6.

Define substantial. Agree that CPI overstates inflation.

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