Wages, Compensation, And Living Standards Have Greatly Improved In Recent Years
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First, watch this five-minute video, The Real Truth About the Economy: Have Wages Stagnated?
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Mostly from article “What Democrats get wrong about the middle class” - James Pethokoukis, August 2015:
Obamanomics and the modern Democratic party are constructed around this core economic claim:
“America's three-decade, free-market experiment of tax cuts and deregulation was a failure for the middle class.”
Democrats claim from Ronald Reagan through George W. Bush, the 1% got even richer, while the other 99% of us saw incomes stagnate.
Stagnationists often point to U.S. Census Bureau data as proof the typical American family is little better off than when Reagan took office in 1981.
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Economist Martin Feldstein recently pointed out:
“Census data show real median incomes rose just 0.3% a year from the middle 1980s through 2013, or about 10% total.
That data looks especially bad when one considers real per person economic growth rose by 1.8% annually over the period, the economy grew much bigger than wages, reflecting widening inequality.
The census data falsely supports the claim the rich got richer, everyone else not so much.”
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Feinstein goes on to say the problem is census data paints an incomplete picture.
A University of Chicago poll of top economists earlier this year found 70% agreed the census conclusion "substantially understates how much better off people in the median American household are now economically, compared with 35 years ago."
He says the census data fails to take into account shrinking household size, the rise in government benefit transfers, and · changes in tax policy.
The census data also measures inflation in a way some experts think overstates the true rise in living costs.
When the congressional budget office took all those factors into account, it found median household income had risen by 53%, not 10%, since 1980.
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Feldstein calculates median household income has risen by 2.5 percent a year over the past 30 years, not 0.3 percent.
That would be a doubling of living standards over the past generation.
Even those figures ignore welfare gains from rising life expectancy, which economists Charles Jones and Peter Klenow think could equal a full percentage point a year.
Government data ignores the consumer value of free internet services like Facebook, Google, and Twitter.
Consider this simple thought experiment from Washington Post reporter Matt O'Brien:
"Adjusted for inflation, would you rather make $50,000 in today's world or $100,000 in a world of the 1980s?"
Is that added dough enough for you to give up your flat-screen television, smartphone, and internet access?
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Democrats pride themselves as rationalists who live in the "reality-based community."
If that's true, they should stop denying Americans are a lot better off in the age of the iPhone than they were in the age of Atari.
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(own comment):
Either socialists don’t understand this truth or zei don’t like this truth, has to be the second.
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