The National Income and Product Accounts (NIPA) provide a wealth of economic insights by separating data into different classes, one of them being households. FRED makes it especially easy to examine the sources of household income by providing release tables. Here, we used the table for personal income to create the graph above.
Probably to no one’s surprise, wages and salaries make up the largest share of household income. But this share has been steadily shrinking, from 63% in 1947 to 49% today. Proprietors’ income (the income of the self-employed) has also shrunk, from 19% down to 9%.
Obviously, other shares must be growing. Capital income has grown from 8% to 14%. Supplements to wages and salaries (benefits for health, retirement, vacation, etc.) have grown from 5% to 12%. And transfers from the government have grown the most, from 5% to 17%.
How this graph was created: From the Personal Income release table, select these five series and click “Add to Graph.” In the “Edit Graph” tab, go to the “Format” tab to select graph type “Area” and stacking type “Percent.” FYI: FRED lets you change the order of the series as you wish. [NOTE: This stacked area graph displays each of the series as a percent of the total of all five series shown here. The original units of the series are billions of dollars.]
Suggested by Christian Zimmermann.