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Ordinary Americans Are Thriving Economically

Summary:
In my latest column for AIER, I offer more reasons to recognize that the American middle class is not economically stagnating. A slice: A common response to these happy data is this: “Of course household income is higher. Because there are more women working today than in past decades, household incomes are bound to be higher.” But there are three reasons – two minor, one major – why this response does not discredit the argument that ordinary Americans are becoming more prosperous. First a minor reason. It’s true that a much larger percentage of working-age women are in today’s American workforce than was the case for most of the past. But women’s participation in the labor force peaked about 20 years ago. Today it’s about where it was in 1995. And yet the percentage of high-income

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In my latest column for AIER, I offer more reasons to recognize that the American middle class is not economically stagnating. A slice:

A common response to these happy data is this: “Of course household income is higher. Because there are more women working today than in past decades, household incomes are bound to be higher.”

But there are three reasons – two minor, one major – why this response does not discredit the argument that ordinary Americans are becoming more prosperous.

First a minor reason. It’s true that a much larger percentage of working-age women are in today’s American workforce than was the case for most of the past. But women’s participation in the labor force peaked about 20 years ago. Today it’s about where it was in 1995. And yet the percentage of high-income households is today higher – and the percentage of low-income households lower – than in 1995. So higher household earnings are not the result exclusively of more women working.

A second, (relatively) minor reason is that the number of people in the typical American household is today lower than in the past. With any given amount of household income now being shared by a smaller number of people than in the past, each person’s share of income today is higher.

Here’s the third and major reason. More women today are able to work in the market than in the 1960s, ‘70s, and ‘80s because of this market-driven reality: many goods and services that were once most efficiently produced in-house by stay-at-home wives – goods and services such as meals, clothes laundering and ironing, and housecleaning – are today produced more efficiently either outside of the household (such as tasty and nutritious prepared meals of the sort that in the past were much less available to ordinary Americans than they are today) or within households in ways that today consume far less time and effort than was needed in the past (such as washing and ironing clothes, and cleaning cookware and dinner dishes).

There have been many big improvements, such as increased availability of automatic dishwashers, frost-free freezers, microwave ovens, and robotic vacuum cleaners. And there have been even more small improvements, such as coffeemakers that can be set to turn on and off automatically, plastic sandwich and freezer bags with built-in easy-seal tops, wrinkle-free and stain-resistant fabrics, and falling clothing prices which reduce the need for mom to mend the likes of torn and worn shirts, pants, and coats. Oh, and let’s not overlook this time-saver: greater reliability of appliances, which means less need for someone to wait at home for repairmen.

In short, households today still get the valuable goods and services once produced by non-income-earning stay-at-home wives, but households now get, in addition, whatever other goods and services are purchased with the incomes earned by women who work outside of the home.

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Don Boudreaux
He is a professor of economics at George Mason University in Fairfax, Virginia. Previously, he was president of the Foundation for Economic Education.

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