The Economy

Did You Hear the One about the Suffering of the Middle Class?

March 15, 2012

Conventional wisdom states that the middle class in America is not what it used to be in terms of income and standard of living. NPR reported on Oct 18, 2011, "Once you adjust for inflation the median incomehas stagnated for almost 38 years." My guess is that most America's have heard this and probably believe it.

The reality is more encouraging. You can search the details out for yourself in a paper written by Bruce Myer of the University of Chicago and James Sullivan of the University of Notre Dame, entitled "The Material Well-Being of the Poor and the Middle Class Since 1980." I know, not a catchy title. Dr. Don Bourdreaux of George Mason University agrees with their findings, as do others. Paul Krugman does not.

The noteworthy findings that they fly in the face of conventional wisdom. Median income and consumption in the US has risen over 50% since 1980, well above the normally reported 16%. There are various reasons why this is so, but one of particular interest is that the measure used refers to Median Household Income. The official estimates over the years have failed to adjust for the number of people living in those households. There are fewer people now in that household than in 1980, thus the adjusted income is actually quite higher.

Both the middle class and the poor have seen their lot in life improve as the US has prospered. We have more living space, more air conditioning, dishwashers, clothes dryers, and other items that make our life so much more comfortable than it was 30 years ago. Think how many people have computers, cell phones, HD TV, and the other luxuries that were a dream 30 years ago. We make more, we live better, and it has been shared by all classes - not accrued to only the wealthy among us.

About the Author

Alan Beaulieu Blog | President

One of the country’s most informed economists, Alan Beaulieu is a principal of the ITR Economics where he serves as President. ITR predicts future economic trends with 94.7% accuracy rate and 60 years of correct calls. In his keynotes, Alan delivers clear, comprehensive action plans and tools for capitalizing on business cycle fluctuations and outperforming your competition--whether the economy is moving up, down, or in a recession.

Since 1990, he has been consulting with companies throughout the US, Europe, and Asia on how to forecast, plan, and increase their profits based on business cycle trend analysis. Alan is also the Senior Economic Advisor to NAW, Contributing Editor for INDUSTRYWEEK, and the Chief Economist for HARDI.

Alan is co-author, along with his brother Brian, of the book MAKE YOUR MOVE, and has written numerous articles on economic analysis. He makes up to 150 appearances each year, and his keynotes and seminars have helped thousands of business owners and executives capitalize on emerging trends.

Prior to joining ITR Economics, Alan was a principal in a steel fabrication company and also in a software development company.