Things Aren’t Much Better Now for Most People

Economic Development Economics National Politics
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            Heerlen           A persistent question in the US, as well as many other countries around the globe, is “what’s driving this increase of populism?”  Why are people so angry?  Many who ask are dumbfounded, because they believe that things are so much better now.  People are living longer.  Median income has risen.  People are better educated.  Maybe NAFTA was a mistake, but get over it, all boats have risen.  Similar arguments are often made. The head scratching continues unabated.  Too many of the chattering class are mystified the about the rage and protest that is fueling Trump’s voter base when, from their perspective, things have gone so well.

It would be easy to just answer that median income allows the gross inequity to disguise the real numbers, especially for workers, when all the top 10% are factored into the equation.  Reading Peter Turchin’s End Times:  Elites, Counter Elites and the Path of Political Disintegration provides an important rebuttal to this mass denial, as he unpacks the numbers and finds hard evidence that provides the infrastructure of discontent for so many.

Here are some of his key points:

  • we need to look at the median income: the level dividing the distribution of incomes precisely in half. The US Census Bureau helpfully provides data on the median income. Between 1976 and 2016, it grew from $52,621 (in 2020 dollars) to $63,683, a change of 21 percent. Not as good as 45 percent but still a decent increase,
  • The median real wage between 1976 and 2016 increased from $17.11 to $18.90 per hour—that is, by 10 percent.
  • But workers with just high school degrees saw their wages decrease from $19.25 to $18.57. For workers who did not complete high school, wages shrank from $15.50 to $13.66. Looking at different demographic categories, we see some variation around this overall pattern: men fared worse than women, and Black people fared worse than white or Hispanic people.
  • conclusion from these data is that Americans without a four-year college degree—64 percent of the total population—have been losing ground in absolute terms; their real wages shrank over the forty years before 2016.
  • A worker earning the median wage in 1976 needed to work 150 hours to earn one year of college. In 2016, the average annual cost of public university tuition and fees was $8,804. A median-wage worker needed to work 500 hours to pay for it—that’s more than three times longer. The challenge of affording a median house tells a similar story: a median worker must work 40 percent longer to earn it in 2016 compared to 1976. That 10 percent increase in real median wage starts to look even punier than before.

The trend line is not much different in the United Kingdom or France either.  A 10% bump in 40 years is not going to bring almost two-thirds of the population out on the streets to celebrate, but it definitely pushed many of them to the polls to protest as best they can in anger and hope that some of the elites in our plutocracy will finally do what has to be done to fix this.  The fact that Biden is now trying, and Trump talked smack, but still mainly delivered to the rich, doesn’t quell the anger or the desperation to be heard, when Biden seems like the establishment now and Trump like the revolutionary, speaking in tongues and weirdness and unsettling the status quo.

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