economics

Is Middle Class Stagnation a Myth?

Economics, George Mason University
Economics, CUNY
Genesis
Response
Penultimate
Finale

Branko Milanović

Economics, CUNY

September 14th, 2020
I have nothing new to add.
Professor Boudreaux and I disagree on whether the position of the middle class should be assessed by looking at the entire household income (adjusted by number of family members) or only at wages. We also disagree about whether what matters is if there was a real increase (however minimal) or how that (minimal) increase compares with the changes at the top of U.S. distribution and elsewhere. We also disagree on whether this indicates that more or less government intervention is necessary. (I find it interesting that at the present moment, where we are about to hit 200,000 deaths from covid-19, Professor Boudreaux believes that the health care in the U.S. should be more private than it is.)
Now, where do we agree:
U.S. middle class had experienced a modest increase in real per capita income of under 1% per year during the past thirty years.
That growth was significantly lower than the growth at the top.
That growth might have been largely driven by technological improvements (new goods) which have improved lives of many people in the world.
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