As we recover economically from the coronavirus pandemic (with the unemployment rate continuing to drop), we should not lose track of the many things that the U.S. is doing right. I have been focusing on this in my last few blog entries and pointing out how important it is to return to the economic growth we were experiencing before the pandemic hit us hard in March 2020.
- Wages have not been stagnant for decades. As the figure below shows, during the past three decades, wages for typical workers have grown by at least 20% (perhaps as much as 33% depending on how they are measured). It is unreasonable to describe (as does the main-stream media) this growth as stagnant.
- Household income growth has not been stagnant for decades. As the figure below shows, the median household saw market income plus social insurance benefits increase by 28% from 1990 to 2016. And income after taxes and transfers grew by 44% over this same period.
- Most Americans in their 40s are doing better than their parents were during their 40s. Again, looking at the chart below, 86% of today’s 40-somethings who were raised in the bottom 20%, have higher incomes than their parents did when their parents were in their 40s. This represents huge upward mobility from the bottom of the income distribution.
Conclusion. Of course, the pandemic is a temporary setback, but let’s keep in mind how well the economy has been doing in recent years. “If you work hard and play by the rules, you can get ahead. Your effort will be rewarded. America is a place where you can build a better life for yourself.”