>>This statement reminds me of baseline budgeting where not increasing as much as previously budgeted is considered a cut. Here you claim that even though the income of the lower half rose, because it rose less than the upper half that they went backwards. For the 20 percent of the population with the lowest income, average real after-tax household income was about 18 percent higher in 2007 than it had been in 1979.
>
>I am pretty sure that this was not corrected for inflation (which is seems to be one of the norms of gov statistics<g>),
>which on SWAG estimate would put it into the zero to minuscle minus category on buying power,
>which IMHO is the real target to focus on. OTOH you have to subtract the inflationary influences from capital gains on base capital if you define actual "buying power [gain]" as the target statistic, which eliminates some of the skewness, but not all. Remember Churchill on statistics ;-)
>
>regards
>
>thomas

From the Notes and Definitions
Income is adjusted for inflation using the Bureau of Labor Statistics’ research series of the consumer price index for all urban consumers (CPI-U-RS).

http://cbo.gov/ftpdocs/124xx/doc12485/10-25-HouseholdIncome.pdf