Chart Summary

As can be seen on the chart there is a strong correlation between GDP per Capita and Median Family Income. For the first three decades after WWII the two were perfectly correlated.  After 1975 both continued to grow, however GDP per Capita has been growing faster than Median Family Income. 

There have been many hypotheses offered as to why GDP per Capita and Median Family Income have changed growth rates, but there is no consensus. Globalization, family size, immigration, corporate greed, the gold standard, welfare and fringe benefits have all been posited as reasons why the growth rates diverged. Generally, the explanations offered are conjecture and in lock step with the potilical ideaologies of the "experts" offering the reason.

Key Lesson

There is a strong correlation between GDP per Capita and Median Family Income. When GDP per Capita increases, so does Median Family Income and visa versa. Therefore, in order to improve the living standard of the poor and middle class we must focus on increasing GDP per Capita.