The average American family must earn nearly twice as much this year as it did in 1970 to maintain the same standard of living, according to the Conference Board, a business research organization.
"Americans' budgets have been squeezed by rising Social Security payments and the higher federal income tax brackets that come with rising earnings," the board said. "Inflation had added heavily to the toll, with $1 required in 1979 to purchase what 55 cents bought in 1970."
The result, shown on one of the board's charts, is that real income after federal taxes will be lower this year than in 1972 for a family with actual money income of $18,800. That is the board's estimate for the median family income in 1979. At the median, or mid-point, half of all family incomes would be higher and half lower.
The board's basic points are not disputed by most economists. Real incomes are rising far less rapidly than the current dollar numbers would imply. Total federal tax burdens have risen since 1960.
But the board's numbers and charts, contained in one of their widely distributed "Economic Road Maps," do not tell the whole story.
First, the statistics are not adjusted for changes in family size and other demographic shifts. Since 1960, the size of the average family has dropped by 8 percent. Thus, when the board makes its assertion about "same standard of living" it implies the same family, which it is not.
Second, the income figures do not include all income. The value of fringe benefits, which was risen considerably since 1960 even after an adjustment for inflation, are not counted. Nor are "in-kind" income, such as food stamps or the subsidy in publicly assisted housing.
Third, since 1960 there have been relatively large increases in families whose "worker" is retired, and in the number of families with young earners whose wages are not high. Bothtend to drag down the median.
On the other hand, there also has been a large increase in the number of families with more than one worker. That would tend to boost total insomes and raise the median. Thus, if the median has not risen, then that "same" standard of living may be maintained only at the cost of more work.
Finally, compilations of this sort imply that those federal income and Social Security taxes have not relieved families of any expenses that they otherwise would have to pay. That's far from true for many families, however.
Social Security taxes have risen so rapidly because its retirement, medical and disability benefits have risen, and more groups are eligible for them.
Welcome to the pitfalls of statistics. CAPTION: Graph, no caption, The Washington Post