Connect with us

Hi, what are you looking for?

Investing

Latest Census Numbers on Household Income Show Long-Term Progress in an Era of Increased Globalization

Daniel Griswold

The Census Bureau reported this week that real median household income in the United States fell in 2022 for the third year in a row. We can debate the underlying causes of the setback, but the report shouldn’t obscure the long‐​term gains made by American workers and families during recent decades of expanding globalization.

One data point—highlighted by AEI scholar (emeritus) Mark Perry in a chart posted on X—exposes the myth that decades of growing trade have somehow “hollowed out” the American middle class. Going back to 1967, Perry shows that the share of American households with earnings between $35,000 and $100,000 (in constant 2022 dollars) has indeed shrunk, but so too has the share of households with earnings below $35,000. Meanwhile, the share of households earning more than $100,000 has nearly tripled.

(Getty Images)

I document the same phenomenon in a new essay, “The Misplaced Nostalgia for a Less Globalized Past: The ‘Great Again’ Economy Wasn’t so Great.” The essay is part of an ambitious new Cato Institute project called “Defending Globalization.”

Looking at the same Census series from 1970 to 2021, you can see in the nearby chart that the number of both poor and middle‐​class households has been shrinking as a share of total households, while those with incomes above $100,000 in constant dollars have been rising. The American middle class in the era of globalization has been moving up, not hollowing out!

In fact, when we account for changing household sizes as well as more accurate measures of price inflation, median household income in the United States has increased by 50 percent since 1967. Meanwhile, real average hourly earnings have risen by 74 percent in the past 50 years. The time that Americans must work to acquire basic household goods such as food, clothing, and appliances has fallen steadily as technology and trade have combined to make goods more affordable.

The essay goes on to show that Americans are not only earning more on the job but are safer from workplace injury and death. Women workers have benefited in our more globalized era from rising levels of education and more opportunities in the workplace. The rising level of prosperity has benefited minorities as well with falling levels of poverty; inequality as measured by the Gini co‐​efficient has actually decreased slightly in recent decades.

All this has occurred over decades of rising levels of foreign trade and investment as a share of U.S. gross domestic product. Despite the recent turbulence, Americans today are better off than they were 50 years ago, not despite globalization, but in significant measure because of it.

You can check out all the essays as they roll out as well as Scott Lincicome’s introductory talk at the “Defending Globalization” website.

Advertisement

    You May Also Like

    Investing

    RevisingTheBankSecrecyAct_NorbertMichelAndJenniferSchulp_CMFAWP007   The post Revising the Bank Secrecy Act to Protect Privacy and Deter Criminals (CMFA Working Paper No.007) appeared first on Alt-M.

    Investing

    Recently, an investment advisor and Bitcoin proponent tweeted the claim that “[f]or most of human history” the “[s]eparation of money and state was the...

    Business

    Rollee enables worker’s to share their professional data, spread over one or more financial platforms. Ali Hamriti, CEO and Co-Founder of Rollee, is on...

    Business

    The energy crisis means that as the price of wholesale commercial energy hits an unprecedented high, businesses must pay notably more for their energy...

    Disclaimer: successfuldealnow.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 successfuldealnow.com | All Rights Reserved