Fred Krueger, a crypto investor with more than 125,000 followers on X and author of a book about Bitcoin, recently claimed that the rate of inflation for cars, houses, Ivy League college tuition, and health care have exceeded the growth rate of family income since 1971.
“The median family income in the US has gone from 10K in 1971 to 55K today, a gain of 5.5x …” he tweeted to his 125,000 followers on X. “The median cost of a car has gone from 4K to 48K, an increase of 12x. The median cost of a house has gone from 25K to 357K, an increase of 14x. The median cost of an ivy league college has gone from 3K a year to 87K, an increase of 29x. The average cost of healthcare per person has gone from $400 to $15,000, [an] increase of 37x. Basically, the average person in the US is worse off today than in 1971. So much for ‘progress’”
But Krueger cites an incorrect figure for median family income and understates the rate that family income has grown since 1971. According to Federal Reserve Economic Data (FRED), the U.S. median family income in 2023 was $100,800—nearly double the figure Krueger provided. In fact, the median family income has exceeded $55,000 for the last 20 years. In 1971, median family income was recorded at $10,290 per FRED, an increase of nearly 10 times over—9.8, to be exact—and not 5.5 as Krueger claimed.
It’s also important to note that these figures reflect the rise in nominal dollars and do not adjust for inflation. The U.S. Consumer Price Index (CPI), which measures the change in prices for a basket of various goods and services and a common measure of inflation, rose from 39.9 in 1971 to 316.441 in 2023, an increase by a factor of 7.9. So, while CPI has multiplied nearly eight times over since 1971, that rate lags behind the 9.8 factor increase in median family income. Gains in median family income have outpaced CPI-measured inflation in the same 52-year timeframe. We can also see these gains in FRED’s measure of real median family income, which accounts for inflation: Median family income in 1971, $10,290, would have a purchase power of $65,040 in today’s dollars. So, adjusting for inflation, the median family has seen a 55 percent income increase since 1971.
When asked why he did not adjust for inflation, Krueger told The Dispatch Fact Check, “the entire point is to estimate inflation.” He did not provide a source for the numbers he cited. Moreover, whereas Krueger calculated inflation by an increase in multiples, the rate of inflation reflects the percent change in price level. For example, if baseball tickets were to triple in price over time, “3x” would accurately reflect the price increase as a multiple, but the inflation rate would be expressed as 200 percent.
Krueger also overstates the increase over time in car prices. While FRED does not collect data on the median cost of a car, it does track the CPI for both new vehicles sold and used cars and trucks sold. From January 1971 to November 2024, new vehicles more than tripled in price (3.1x), while used car and truck prices increased at a higher rate of 5.5 times. But both of those figures are lower than Krueger stated.
His claim about price increases for the median house sold is more accurate. The median house sales price at the beginning of 1971 was $24,300, and has since increased to $420,400 in the third quarter of 2024—a price 17.3 times higher than in 1971 and a slightly higher increase than Krueger cited. Meanwhile, his claim about tuition price increases for Ivy League colleges is slightly overstated. Columbia University’s tuition rate has increased at a slightly higher rate than its Ivy League counterparts, going up by a multiple of 27.2, from $2,500 in the 1970-1971 school year to $68,000 this current school year. Meanwhile, while Harvard had a lower rate of increase compared to most other Ivy League schools, the rate difference is not incredibly stark, increasing by a factor of 21.8.
Krueger’s claim that the average cost of health care per person has gone up by a factor of 37 is accurate based on national health care expenditure per capita, which is the total number of dollars spent on health care in the U.S. divided by the U.S. population. According to numbers published by the Centers for Medicare & Medicaid Services’ National Health Expenditure Accounts, total national health care spending per capita went from $387 in 1971 to $14,570 in 2023, increasing by a multiple of 37.6.
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