A few months ago I linked to a widely-cited report saying that renters’ incomes have increased by only 5% since 1960. This seemed unlikely since every single income group has recorded far higher growth rates during this period. It also wasn’t clear to me how the report calculated “renters’ incomes” in the first place.
But today is our lucky day! This kind of data is (I assume) available via an analysis of census microdata, but that’s well above my pay grade. However, while poking around the Consumer Expenditure Survey I discovered that every year they report incomes of renters and homeowners. They report only means, not medians, but I estimated medians based on normal census income figures. This probably understates the actual median income, but that’s OK since we’re mostly interested in growth. Here’s the chart:
This only goes back to 1985, but it shows that median renter income has increased about 16 percent since then, though there was a very long period of flatness in there. Renter income increased about 5 percentage points from 1985-2011, and about 11 points since 2014.
Now, this doesn’t tell us anything about the increase since 1960, but it’s hardly possible that it’s lower. The ’60s were a period of strong income growth: even the lowest income groups—which correlate very well with renters’ income—saw increases of 45 percent from 1960-73 and then a decline of 5 percent between 1973-82. With these numbers in hand, here’s my best estimate of the growth of renters’ incomes since 1960:
From 1973 through 2011 growth was basically zero. But the ’60s showed strong growth and so have the past few years. Put it all together, and renters’ incomes have grown somewhere in the neighborhood of 63 percent, maybe more. It’s certainly a far cry from 5 percent.
