I, too, have perused this report. It inspires me to do a mental experiment – an experiment related to one we’ve done before here at the Café .
Figure 1 on page 4 of the Census Bureau report shows the trend in real median household income from 1967 to 2004. It reveals that real median household income has increased, with the expected blips and surges, over the past 38 years. But being 31 percent higher today than it was in 1967 is not very impressive. This fact means that real household income grew at an average annual rate since 1967 of much less than one percent.
But I ask: would you prefer to live in 1967 with today’s real median household income ($46,326) or live today with 1967’s real median household income ($35,379)? (These figures are expressed in 2005 dollars, by the way.)
Given these two options, I’d choose to live today with only 1967’s real median household income. The reason is that the economy today offers so very many more options than did the economy in 1967 – or even the economy of that halcyon year, 1973. Today I can buy cell-phone service; today I can buy cable television with hundreds of channels, including ones that specialize in sports, cooking, history, and science; today even the cheapest automobiles are safer and more reliable than were the finest cars for sale in 1967; today I can buy telephone answering machines (with caller-ID), microwave ovens, CDs, personal computers, Internet service, and MP3 players. Today I can watch movies in my own home – in color – whenever I want without having to wait for one of the three or four available television stations to telecast a movie for viewing on a black-and-white television.
Today I can use GPS.
Today’s coffee is indescribably superior to the coffee Americans regularly drank just a few years ago; the variety and quality of teas is much higher; a huge selection of books is available at the neighborhood Barnes & Noble or Borders – or through on-line retailers such as Amazon.com. The variety of foods available in supermarkets and at restaurants is much greater and, hence, more interesting. And much of this food is low-fat. (One-percent and two-percent milk were not available to the typical American back in the day.)
The average number of items offered for sale by today’s typical supermarket  is 45,000 (up from what I believe was about 5,000 in the late 1960s).
Today I can buy an inexpensive quartz wristwatch that keeps time with remarkable accuracy.
Today, because of sites such as eBay, I have access to a thicker market for selling my junk.
Today I can buy – or get in a cereal box – a powerful electronic calculator. Today I can take digital photographs and digital videos and send them by e-mail, instantaneously, to family and friends around the world.
Today I can pay even for small purchases with a credit card – or if I prefer to pay with cash, I can get that cash from an ATM.
Today I can have packages delivered overnight.
Today, anesthesia is much better. (Those of us who had teeth filled in the 1970s and again much more recently can attest to the enormous improvement.) Many medicines available today were unavailable back then. Today I can wear not only soft contact lenses, but disposable ones that are cleaner and more convenient than standard lenses. And if I choose, I can have my vision restored to 20/20 through Lasik surgery.
Today life-expectancy is longer .
Americans today spend fewer hours per day on the job, on average, then they did just a few decades ago. In 1960 the average length of the American work week was 38.6 hours; in 1973 it was 36.9 hours; in 1996 (the latest year for which I have data), this figure was down to 34.4 hours. (Note that from 1870 to 1996 the trend in the length of the work week has been steadily downward; no reason to think that this trend has reversed itself in the last ten years.) And because the average number of days worked per year has also fallen, the average American worker in 1996 spent nearly 200 fewer hours annually on the job than did his counterpart in 1973. (These data are from W. Michael Cox and Richard Alm, Myths of Rich & Poor  (1999), Table 3.1, page 55.)
Today, diapers are disposable.
Today I can google.
Sure, I’m happy that I live today with today’s income – but, again, if forced to choose between living in 1967 (or 1973) with today’s higher income and living today with 1967’s (or 1973’s) lower income, I wouldn’t hesitate for as much as a nano-second to choose living today with the lower income from the past.
And I suspect that most people who reflect on this choice objectively would choose as I would choose. If I’m correct, then the growth in real dollar income between 1967 (or 1973) and today underestimates the improvements to everyday life brought to us by economic growth during the past 30 or 40 years.