Middle Class Incomes Rise : Inflation/Unemployment/Cynicism Rising To?

This is good news. The problem that I have though with this analysis is the cost of living doesn't seem to be reflected in the new norm of food and energy which isn't included when factoring the rate of inflation. And who is hurt the most by inflation, the middle class and the poor.

It is good news that there is an increase in income for the middle class as compared  to how the fared in the last decades, but so many things have changed that effect the potential for prosperity in our country.

Also, and let's not forget how the federal reserve is controlling the stock market with the injection of $85 billion dollars every month making those that have stocks richer and those that don't tread water.

The division grows larger between the classes as more and more money is poured into the control of big banks that are not spreading the wealth around and companies that are reducing their  foot print in this country by not hiring, all the while the federal government is spending huge amounts of tax dollars, that we have to borrow or print, to support programs designed to actually cripple the middle and lower class by making them dependent on federal sources for survival, i.e. ObamaCare.

So just how much has the middle class improved over the last 5 years? A better question may be how much has the middle class lost over the last 5 years?

Poor and Middle Class Incomes Have Increased Significantly
Source: Scott Winship, "Poor and Middle Class Incomes Have Increased Significantly," Economic Policies for the 21st Century, November 13, 2013.
November 26, 2013

Public discussion of the economy is wondering why it is that since the 1970s poor and middle class households have seen practically no improvement in living standards, says Scott Winship, the Walter B. Wriston Fellow at the Manhattan Institute.
A widely-cited Economic Policy Institute study, for instance, says median household income was just 5 percent higher in 2012 than in 1979 and that the poverty rate rose from 11.7 percent to 15.0 percent.
But these worrying conclusions flow from problematic analyses.

• Contrary to conventional wisdom, poor and middle class households are at least 30 percent richer today than their counterparts from 35 years ago.
• Most analysts of income trends simply accept that the official Census Bureau figures are the best available.

But those figures have three important shortcomings.

• First, they rely on an inferior way of accounting for changes in the cost of living. The best set of inflation estimates developed by the Bureau of Labor Statistics (BLS) only goes back to 1999, so it cannot be used to consider long-term income trends. However, a similar set of estimates from the Bureau of Economic Analysis is available back to the 1920s and indicates the same change in the cost of living after 1999 as the BLS series. Using this more sophisticated cost-of-living adjustment, which is preferred by the Congressional Budget Office and Federal Reserve Board, the increase in median household income was not 5 percent but 16 percent from 1979 to 2012.
• Second, the official Census Bureau figures indicate that the household at the 20th percentile of income -- poorer than 80 percent of households and richer than only 20 percent of them -- was no better off in 2012 than in 1979. Switching to the better cost-of-living adjustment, however, shows a 10 percent improvement -- and a 19 percent improvement comparing the 1979 peak to the 2007 peak.
• Finally, the Census Bureau figures do not account for the fact that households have become smaller over time.