I remember 1999. It was the year I could finally grow a decent set of sideburns, accomplishing a goal I set the first time I saw Jason Priestly and Luke Perry on Beverly Hills, 90210. I also defied my own expectations and graduated high school (though it was a close call).
So, 1999 was pretty good to me.
What I don't remember is that 1999 set a record for median household income in the United States. That year the average family took home $58,665. Since then household income has stagnated or declined, with the decline accelerating during the Great Recession.
However, the record for median household income has finally been broken--17 years later.
According to the Census Bureau, in 2016 median household income was $59,039, a 3.2% increase from the prior year.
So, the return of the 90s isn't just about the comeback of high-waisted jeans and midriff shirts. Economically speaking, we are also back in the good old days, right?
I might remember 1999, but I am 36 and not old enough to have managed a whole household of income at the peak of the 1990s boom.
Here's what I do know, though:
In 1999 a $699-$999 handheld computer/phone wasn't a thing everybody needed to have.
(Mostly because it didn't exist--and yet, strangely enough, civilization thrived.)
Healthcare? The cost is up 213% since 1999.
College tuition? As a 36-year-old parent with an 18-year-old daughter who will be a freshman next year, I have a unique perspective on this. Had I attended the University of Missouri-St. Louis (the school my daughter will likely attend as a freshman) after I graduated from high school in 1999, I would have paid $4,796 for in-state tuition. In 2018 her tuition will cost roughly $11,000--a rate of increase that surpasses even healthcare.
In 1999 my parents purchased a new two-door Jeep Wrangler. The MSRP (Manufacturer's Suggested Retail Price) was $17,905. The MSRP on a similar 2017 Jeep Wrangler is $31,475.
Before any politicians pop the cork and celebrate, they need to remember two things:
- Severely unequal income distribution means that the median household income is not the typically household income, particularly when you account for the fact that the rise in income last year was higher in specific geographic locations (looking at you, California).
- It costs a lot more to live in 2017 than it did in 1999.
That isn't news to full-time wage earners (aka people who work for a living). Their wages continued to be flat in 2016--meaning that the household income increase may be further evidence that the rich continue to get richer.
An increase in median household income is certainly better than a decrease in household income.
However, it isn't proof that the average American worker has regained the ground he or she lost over the past 18 years. The economy may be headed in the right direction for some households--and even some wage earners in specific geographic locations--but there are a lot of people still not partying like it's 1999.