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from: Robert J. Samuelson: Are Living Standards Truly Stagnant? | Stock News & Stock Market Analysis - IBD
ROBERT J. SAMUELSON Apr. 11, 2017, 4:43 PM ET
It may turn out that the widespread belief that most Americans' incomes have stagnated for years is, well, false or at least overstated.
Say what?
No doubt, many Americans feel that, except for the rich and segments of the upper middle class, they've been treading water economically for years. To take a prominent piece of evidence: In 2015, the average "real" (inflation-adjusted) wage of workers was about $21 an hour, almost exactly what it was in 1975.
That's nearly half a century without a wage increase!
Or is it?
In a provocative new study, economist Bruce Sacerdote of Dartmouth College reviewed the material well-being of the poorest 50% and 25% of Americans. What he concluded was that even these families had achieved a "meaningful growth in consumption ... (despite) a prolonged period of increasing income inequality ... and a decreasing share of national income accruing to labor."
To reach this counterintuitive finding, Sacerdote relied on three types of evidence. The first was...
...many Americans feel that they're not getting ahead, whether — in a material sense — they are or they aren't. There are many plausible explanations. Sacerdote speculates that the rise in inequality may make Americans "feel worse ... even if their material goods consumption is rising." Or maybe it's just disappointment. People got less than they expected, and the pace of change was so slow that it seemed like stagnation.
The evidence that people's incomes are down are:
The evidence that incomes are up:
ROBERT J. SAMUELSON Apr. 11, 2017, 4:43 PM ET
It may turn out that the widespread belief that most Americans' incomes have stagnated for years is, well, false or at least overstated.
Say what?
No doubt, many Americans feel that, except for the rich and segments of the upper middle class, they've been treading water economically for years. To take a prominent piece of evidence: In 2015, the average "real" (inflation-adjusted) wage of workers was about $21 an hour, almost exactly what it was in 1975.
That's nearly half a century without a wage increase!
Or is it?
In a provocative new study, economist Bruce Sacerdote of Dartmouth College reviewed the material well-being of the poorest 50% and 25% of Americans. What he concluded was that even these families had achieved a "meaningful growth in consumption ... (despite) a prolonged period of increasing income inequality ... and a decreasing share of national income accruing to labor."
To reach this counterintuitive finding, Sacerdote relied on three types of evidence. The first was...
...many Americans feel that they're not getting ahead, whether — in a material sense — they are or they aren't. There are many plausible explanations. Sacerdote speculates that the rise in inequality may make Americans "feel worse ... even if their material goods consumption is rising." Or maybe it's just disappointment. People got less than they expected, and the pace of change was so slow that it seemed like stagnation.
* * * * * * * * * * * * * * *
The evidence that people's incomes are down are:
- Everyone 'knows' that incomes are down.
- Everyone feeels like they're not better off.
- The Census Bureau says real family median incomes are down from their peak a dozen years ago.
The evidence that incomes are up:
- Real disposable income percapita is at an all time high.
- Real total employee compensation is at an all time high.
- Real average private net worth is at an all time high.
