Shared prosperity

Lane Kenworthy, The Good Society
December 2025

As a society gets richer, its citizens’ living standards should rise. The poorest needn’t benefit the most; equal rates of improvement may be good enough. We might not even mind if the wealthiest benefit a bit more than others; a little increase in income inequality is hardly catastrophic.1 But in a good society, those in the middle and at the bottom ought to benefit significantly from economic growth. When the country prospers, everyone should prosper.2

The United States is among the richest of the world’s longstanding-democratic nations, and it has gotten richer over time. How effectively is that prosperity shared? I examine the least well-off in “A Decent and Rising Income Floor.” Here I focus on households in the middle.

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MIDDLE-CLASS INCOMES

Figure 1 shows median household income — the most common indicator of the standard of living of a typical household. Middle-class American households have higher incomes than their counterparts in most other affluent nations.

Figure 1. Median household income
Posttransfer-posttax household income. The income measure includes earnings, government cash and near-cash transfers, and other sources of cash income. Tax payments are subtracted. The incomes are adjusted for household size and then rescaled to reflect a three-person household, adjusted for inflation, and converted to US dollars using purchasing power parities (PPPs). Consumption taxes aren’t subtracted from income, and they are higher in some nations than in others; however, they are incorporated in the PPPs used to convert incomes to a common currency. “k” = thousand. Data sources for household income: Luxembourg Income Study, “LIS key figures”; OECD Data Explorer, “Income distribution database.” Data sources for inflation adjustment and purchasing power parities: OECD Data Explorer, “Consumer price indices (CPIs, HICPs), COICOP 1999” and “Annual purchasing power parities and exchange rates.” Thick line: United States. “Asl” = Australia; “Aus” = Austria.

The degree to which America’s prosperity is shared has changed over time. In the period between World War II and the mid-to-late 1970s, economic growth was very good for Americans in the middle. As GDP per capita increased, so did middle-class household incomes. Indeed, they moved virtually in lockstep.3

Since the late 1970s, however, the incomes of middle-class households have increased less rapidly than they could have, and arguably should have, given the rate at which the economy has grown. Figure 2 shows one way to see this. The solid line is median household income. The dashed line is average household income. From 1963 (the earliest year for which comparable data are available) to 1979, median income was about 90% of average income. Then the gap between the two began to widen, and by the 2010s and early 2020s median income was only 80% of average income. Had it remained at 90%, the income of the median American household would have been nearly $10,000 higher than it actually is.

Figure 2. Average household income and median household income
Posttransfer-posttax household income. The incomes are adjusted for household size and then rescaled to reflect a three-person household. They also are adjusted for inflation. “k” = thousand. Data source for household income: Luxembourg Income Study, “LIS key figures.” Data source for inflation adjustment: OECD Data Explorer, “Consumer price indices (CPIs, HICPs), COICOP 1999.”

Figure 3 offers another way to see it. This figure has a separate chart for each country showing the relationship between economic growth and middle-class household income growth from 1979 to 2019.4 In each chart, the horizontal axis is GDP per capita and the vertical axis is median household income. The dots are years, and the line summarizes the pattern for the country. If the line slopes sharply upward to the right, median income is rising rapidly as the economy grows. If the line is more flat, median income isn’t increasing much.

Compared to the other twenty nations, the United States has done fairly well when it comes to economic growth; it moved relatively far to the right along the horizontal axis. But as the US economy grew, median household income didn’t rise as rapidly as in most other nations; the slope of the US line is comparatively flat.

Figure 3. Median household income by GDP per capita
The data points are years. 1979-2019. Household incomes are posttransfer-posttax, adjusted for household size (the amounts shown are for a household with three persons). Household incomes and GDP per capita are adjusted for inflation and converted to US dollars using purchasing power parities. “k” = thousand. Data sources for household income: Luxembourg Income Study, “LIS key figures”; OECD Data Explorer, “Income distribution database.” Data source for GDP per capita: OECD. Data sources for inflation adjustment and purchasing power parities: OECD Data Explorer, “Consumer price indices (CPIs, HICPs), COICOP 1999” and “Annual purchasing power parities and exchange rates.” The lines are linear regression lines.

This is disappointing. But does the trend in middle-class incomes paint an accurate picture of changes in living standards in the United States?

“IT’S BETTER THAN IT LOOKS”

In the view of some, the picture conveyed by figures 2 and 3 is too pessimistic. They argue that incomes or broader living standards actually have grown quite rapidly, keeping pace with the economy.5 There are eight variants of this view. Let’s consider them one by one.

1. The income data are too thin. The most commonly-used data for household income in the United States, from the Census Bureau, don’t include certain types of government transfers and don’t subtract taxes.6 If transfers have risen rapidly for middle-class households, or if taxes have fallen sharply, these data may understate the true rate of progress. However, the data used in figures 2 and 3 don’t have those limitations. They include government transfers, and taxes are subtracted.

Another limitation of the Census Bureau data is that they don’t adjust for household size. The size of the typical American household has been shrinking since the mid-1960s, when the “baby boom” ended, so some suggest that we don’t need income to be growing as rapidly as it used to. Again, however, this limitation doesn’t apply to the data in figures 2 and 3, which do adjust for the size of households.

2. The income data miss upward movement over the life course. The household income data shown in figure 2 are from a survey, done each year, that asks a representative sample of American adults what their income was in the previous year. Each year the sample consists of a new group; the survey doesn’t track the same people as they move through the life course. If we interpret figure 2 as showing what happens to typical American households over the life course, we’ll conclude that they see little increase in income as they age. That’s incorrect. In any given year, some of those with below-median income are young. Their wages and income are low because they are in the early stages of the work career and/or because they’re single. Over time, many will experience a significant income rise, getting pay increases or partnering with someone who also has earnings, or both. Figure 2 misses this income growth over the life course.

Figure 4 illustrates the point. The lower line shows median income among families with a “head” aged 25 to 34. The top line shows median income among the same cohort of families twenty years later, when their heads are aged 45 to 54. Consider the year 1979, for instance. The lower line tells us that in 1979 the median income of families with a 25-to-34-year-old head was about $58,000 (in 2013 dollars). The data point for 1979 in the top line looks at the median income of that same group of families twenty years later, in 1999, when they are 45 to 54 years old. This is the peak earning stage for most people, and their median income is now about $91,000.

Figure 4. Median income within and across cohorts
For each year, the lower line is median income among families with a “head” age 25-34 and the top line is median income for the same cohort of families twenty years later. In the years for which the calculation is possible, 1947 to 1993, the average increase in income during this two-decade portion of the life course is $32,500. The data are in 2013 dollars; inflation adjustment is via the CPI-U-RS. “k” = thousand. Data source: Census Bureau, “Historical Income Data,” table F-11.

In each year, the gap between the two lines is roughly $33,000. This tells us that the incomes of middle-class Americans tend to increase substantially as they move from the early years of the work career to the peak years.

Should this reduce our concern about the over-time pattern shown in figure 2 above? No, it shouldn’t. Look again at figure 4. Between the mid-1940s and the mid-1970s, the median income of families in early adulthood (the lower line) rose steadily. In the mid-1940s median income for these young families was around $27,000; by the mid-1970s it had doubled. Americans during this period experienced income gains over the life course, but they also tended to have higher incomes than their predecessors, both in their early work years and in their peak years. That’s because the economy was growing at a healthy clip and the economic growth was trickling down to Americans in the middle.

After the mid-1970s, this steady gain disappeared.7 Families with a 25-to-34-year-old head continued to achieve income gains during the life course. (Actually, we don’t yet know about those who started out after the mid-1990s, as they’re just now beginning to reach age 45 to 54. The question marks in the chart show what their incomes will be if the historical trajectory holds true.) But the improvement across cohorts that characterized the period from the mid-1940s through the 1970s — each cohort starting higher and ending higher than earlier ones — disappeared.

Income for many Americans rises during the life course, and this is indeed hidden by charts such as figure 2. But that shouldn’t lessen our concern about the decoupling of household income growth from economic growth that has occurred over the past generation. We want improvement not just within cohorts, but also across them.

3. More people are in college or retired. The share of young Americans attending college has increased since the 1970s, and the share of Americans who are elderly and hence retired has risen. These two developments have reduced the share of families with an employed adult head. However, this doesn’t account for the slow growth of household income relative to the economy. The trend in income among households with a head aged 25 to 54, in the prime of the work career, is very similar to that for all households.8

4. There are more immigrants. Immigration into the United States began to increase in the late 1960s. The foreign-born share of the American population, including both legal and illegal immigrants, rose from 5% in 1970 to 14% in the late 2010s.9 Quite a few have come with limited labor market skills and little or no English, so their incomes tend to be low. For many such immigrants, a low income in the United States is a substantial improvement over what their income would be in their home country. So if this accounts for the divorce between economic growth and median income growth over the past generation, perhaps we shouldn’t worry.

Immigration is indeed part of the story. But it is a relatively small part. The rise in median household income for non-Hispanic whites, which excludes most immigrants, has been only slightly greater than the rise in median income for all households.10

5. Employer spending on healthcare and pensions for their employees has increased. This might leave less money available for wage and salary increases. However, the share of employee compensation that goes to nonwage benefits has been essentially flat since the late 1970s, so this has played at most a very small role in the failure of household incomes to keep up with the economy during this period.11

6. Consumption. Some consider spending a better indicator than income of people’s standard of living. Even though the incomes of middle- and low-income Americans have grown slowly, they may have increased their consumption more rapidly by drawing on assets (equity in a home, savings) and/or debt. But that isn’t the case. According to the best available data, from the Consumer Expenditures Survey (CES), median family expenditures rose at the same pace as median family income in the 1980s, 1990s, and 2000s.12

7. Wealth. For middle-class Americans, the fact that income and consumption growth have lagged behind growth of the economy has been partially offset by an increase in wealth (assets minus debts). But it isn’t clear whether this will last.

As we see in figure 5, there was a sharp upward spike in median wealth in the second half of the 1990s and the first half of the 2000s. The home is the chief asset of most middle-class Americans, and home values jumped during this period. But then the housing bubble burst and median wealth fell precipitously, erasing all of the gains.13 And for those who lost their home during the crash, things are worse than what’s conveyed by these data.14

Figure 5. Median household wealth
Wealth = assets minus debts. Adjusted for inflation. Data source: Federal Reserve, Survey of Consumer Finances, Historic Tables, Public Data, “Estimates inflation-adjusted to 2022 dollars,” table 4.

In the second half of the 2010s, home prices started rising rapidly once again, and so did median household wealth. But if this too turns out to be a bubble, the wealth increase is likely to once again prove temporary.

8. There have been significant improvements in quality of life. The final variant of the notion that income data understate the degree of advance in living standards focuses on improvements in the quality of goods, services, and social norms. It suggests that adjusting the income data for inflation doesn’t do justice to the enhancements in quality of life that have occurred in the past generation.

Fewer jobs require hard physical labor, and workplace accidents and deaths have decreased. Life expectancy rose from 74 years in 1979 to 79 years in 2012. Cancer survival is up. Infant mortality is down. An array of new pharmaceuticals now help relieve various conditions and ailments. MRIs, CT scans, and other diagnostic tools have enhanced physicians’ ability to detect serious health problems. Organ transplants, hip and knee replacements, and lasik eye surgery are now commonplace. Violent crime has dropped to pre-1970s levels. Air and water quality are much improved.

We live in bigger houses; the median size of new homes rose from 1,600 square feet in 1979 to 2,500 in the late 2010s. Cars are safer and get better gas mileage. Food and clothing are cheaper. We have access to an assortment of conveniences that didn’t exist or weren’t widely available a generation ago: personal computers, printers, scanners, microwave ovens, TV remote controls, digital video recorders, camcorders, digital cameras, five-blade razors, home pregnancy tests, home security systems, handheld calculators. Product variety has increased for almost all goods and services, from cars to restaurant food to toothpaste to television programs.

We have much greater access to information via the internet, search engines, artificial intelligence, travel guides, mapping apps and GPS, smartphones, and tablets. We have a host of new communication tools: cell phones, voicemail, email, Skype, social media. Personal entertainment sources and devices have proliferated: cable and streaming TV, high-definition televisions, home entertainment systems, the internet, MP3 players, CD players, DVD players, satellite radio, video games.

Last, but not least, discrimination on the basis of sex, race, and more recently sexual orientation have diminished. For women, racial and ethnic minorities, and LGBT+ Americans, this may be the most valuable improvement of all.

There is no disputing these gains in quality of life. But did they occur because income growth for middle- and low-income Americans lagged well behind growth of the economy? In other words, did we need to sacrifice income growth in order to get these improved products and services?

Some say yes, arguing that returns to success soared in fields such as high tech, finance, entertainment, and athletics, as well as for CEOs. These markets became “winner-take-all,” and the rewards reaped by the winners mushroomed. For those with a shot at being the best in their field, this increased the financial incentive to work harder or longer or to be more creative. This rise in financial incentives produced a corresponding rise in excellence — new products and services and enhanced quality.

Is this correct? To begin, consider the case of Apple and Steve Jobs. Apple’s Macintosh, iPod, iTunes, MacBook Air, iPhone, and iPad were so different from and superior to anything that preceded them that their addition to living standards isn’t likely to be adequately measured. Did slow middle-class income growth make this possible? Would Jobs and his teams of engineers, designers, and others at Apple have worked as hard as they did to create these new products and bring them to market in the absence of massive winner-take-all financial incentives?

It’s difficult to know. But Walter Isaacson’s comprehensive biography of Steve Jobs suggests that he was driven by a passion for the products, for winning the competitive battle, and for status among peers.15 Excellence and victory were their own reward, not a means to the end of financial riches. In this respect Jobs mirrors scores of inventors and entrepreneurs over the ages. So while the rise of winner-take-all compensation occurred simultaneously with surges in innovation and productivity in certain fields, it may not have caused those surges.

For a more systematic assessment, we can look at the preceding period — the 1940s, 1950s, 1960s, and early 1970s.16 In these years lower-half incomes grew at roughly the same pace as the economy and as incomes at the top. Did this squash the incentive for innovation and hard work and thereby come at the expense of broader quality-of-life improvements?

During this period the share of Americans working in physically taxing jobs fell steadily, as employment in agriculture and manufacturing was declining. Life expectancy rose from 65 in 1945 to 71 in 1973. Antibiotic use began in the 1940s, and open-heart bypass surgery was introduced in the 1960s.

In 1940, only 44% of Americans owned a home; by 1970 that jumped to 64%. Home features and amenities changed dramatically, as the following list makes clear. Running water: 70% in 1940, 98% in 1970. Indoor flush toilet: 60% in 1960, 95% in 1970. Electric lighting: 79% in 1940, 99% in 1970. Central heating: 40% in 1940, 78% in 1970. Air conditioning: very few (we don’t have precise data) in 1940, more than half in 1970. Refrigerator: 47% in 1940, 99% in 1970. Washing machine: less than half in 1940, 92% in 1970. Vacuum cleaner: 40% in 1940, 92% in 1970.

In 1970, 80% of American households had a car, compared to just 52% in 1940. The interstate highway system was built in the 1950s and 1960s. In 1970 there were 154 million air passengers, versus 4 million in 1940. Only 45% of homes had a telephone in 1945; by 1970 virtually all did. Long-distance phone calls were rare before the 1960s. In 1950, just 60% of employed Americans took a vacation; in 1970 that had risen to 80%. By 1970, 99% of Americans had a television, up from just 32% in 1940. In music, the “album” originated in the late 1940s, and rock-n-roll began in the 1950s. Other innovations that made life easier or more pleasurable include photocopiers, disposable diapers, and the bikini.

The Civil Rights Act of 1964 outlawed gender and race discrimination in public places, education, and employment. For women, life changed in myriad ways. Female labor force participation rose from 30% in 1940 to 49% in 1970. Norms inhibiting divorce relaxed in the 1960s. The pill was introduced in 1960. Abortion was legalized in the early 1970s. Access to college increased massively in the 1960s.

Comparing these changes in quality of life is difficult, but I see no reason to conclude that the pace of advance, or of innovation, has been more rapid in recent decades than before.17

Yes, there have been significant improvements in quality of life in the United States since the 1970s. But that shouldn’t lessen our disappointment in the fact that incomes for ordinary Americans have been growing more slowly than the economy.

“IT’S WORSE THAN IT LOOKS”

Rather than understating the true degree of progress for middle- and low-income Americans, the income trends shown in figures 2 and 3 above might overstate it.18

1. Fewer Americans have higher incomes than their parents. We sometimes hear claims that younger generations, especially Millennials and Gen Zers, are worse off economically than their predecessors. So far, that’s not correct. Figure 6 shows that if we look at household income when people are in their late 30s (age 36-40), inflation-adjusted income has increased in each successive generation.

Figure 6. Median household income by generation
Median household income by age. Income is adjusted for inflation and for household size. Inflation adjustment is via the PCE. Source: Kevin Corinth and Jeff Larrimore, “Has Intergenerational Progress Stalled? Income Growth Over Five Generations of Americans,” Finance and Economics Discussion Series 2024-007, Federal Reserve, 2024, figure 3b.

At the same time, the share of Americans who have an income higher than that of their parents has been shrinking. As we see in figure 7, the share of American households around age 30 who have a higher income than their parents at the same age — the share experiencing upward absolute intergenerational income mobility — reached a peak of around 90% in the 1960s. Since then that share has been declining.19

Figure 7. Upward absolute intergenerational income mobility
Share of households around age 30 whose income is higher than that of their parents at the same age. Year: second generation’s birth year plus 30. Data source: Yonatan Berman, “The Long-Run Evolution of Absolute Intergenerational Mobility,” American Economic Journal: Applied Economics, 2022, appendix H. Thick line: United States. The other nine countries are Australia, Canada, Denmark, Finland, France, Japan, Norway, Sweden, and the United Kingdom.

Then again, this development is common to all of the affluent democratic nations for which we have data, as the figure shows. In every country we observe a steady decline in upward intergenerational mobility in the post-1979 period. Here the United States isn’t unusual.

2. Income growth is due mainly to the addition of a second earner. The incomes of middle-class American households would have grown even less rapidly since the late 1970s if not for the fact that more households came to have two earners rather than one. From the 1940s through the mid-1970s, wages rose steadily. As a result, the median income of most households, whether they had one earner or two, increased at about the same pace as the economy. Since then, households with a single adult have seen little income rise.20

It’s important to emphasize that most of this shift from one earner to two has been voluntary. A growing number of women seek employment, as their educational attainment has increased, discrimination in the labor market has dissipated, and social norms have changed. The transition from the traditional male-breadwinner family to the dual-earner one isn’t simply a product of desperation to keep incomes growing.

Even so, as more two-adult households have both adults in employment, more are struggling to balance the demands of home and work. High-quality childcare and preschool are expensive, and elementary and secondary schools are in session only 180 of the 250 weekdays each year. The difficulty is accentuated by the growing prevalence of long work hours, odd hours, irregular hours, and long commutes. By the early 2000s, 25% of employed men and 10% of employed women were working 50 or more hours per week.21 And 35-40% of Americans were working outside regular hours (9 am to 5 pm) and/or days (Monday to Friday).22 Average commute time rose from 40 minutes in 1980 to 50 minutes in the late 2000s.23

3. The cost of some key middle-class expenses has risen much faster than inflation. The income numbers in figures 2 and 3 are adjusted for inflation. But the inflation adjustment is based on the price of a bundle of goods and services considered typical for American households. Changes in the cost of certain goods and services that middle-class Americans consider essential may not be adequately captured in this bundle. In particular, because middle-class families typically want to own a home and to send their kids to college, they suffered more than other Americans from the sharp rise in housing prices and college tuition costs in the 1990s and 2000s. Moreover, as middle-class families have shifted from having one earner to two, their spending needs may have changed in ways that adjusting for inflation doesn’t capture. For example, they now need to pay for childcare and require two cars rather than one.24

Consider a four-person family with two adults and two preschool-age children. In the early 1970s, this family would probably have had one of the adults employed and the other staying at home. Today it’s likely that both are employed. In the 1970s their childcare costs were zero. Today they might pay $20,000 for childcare for two children. And they now need two cars rather than one.25 When the children reach school age, the strain eases. But when they head off to college it reappears.26

WHY HAS PROSPERITY BECOME LESS SHARED?

In the 1970s, economic conditions began to shift in a way that gave firms the incentive and the ability to reduce pay increases. Labor unions weakened significantly. Globalization, reduced barriers to entry, and the rise of low-cost behemoths such as Walmart and Amazon have increased the competitive pressure many firms face. Falling transportation and communication costs have made it easier for companies to move jobs to lower-cost parts of the world, or to threaten to do so. Computers and robots have created new possibilities for automating tasks. The “shareholder value” revolution in corporate governance has encouraged managers to prioritize a rising stock price ahead of the well-being of workers. For these reasons and more, a growing share of firms have felt compelled or incentivized to pursue a “low road” approach toward their employees — to minimize labor costs above all else, to treat workers simply as commodities. The result: slower pay growth not just for workers at the low end but also those in the middle.27

Is this actually just a simple story of rising income inequality — of the very rich grabbing more of the gains of economic growth? That’s certainly part of what has happened in the United States, but a look at the cross-country pattern, shown in figure 8, suggests it doesn’t help us much in understanding middle-class income growth since the late 1970s.28

Figure 8. Median household income growth by income inequality
1979 to 2019. Change in p50 income: average yearly change in median household income. The incomes are adjusted for household size and then rescaled to reflect a three-person household, adjusted for inflation, and converted to US dollars using purchasing power parities. Top 1% income share: Income share of the top 1% of tax units. Pretax income, excluding capital gains. Data sources: Luxembourg Income Study; OECD; World Inequality Database. The line is a linear regression line.

HOW TO RETURN TO SHARED PROSPERITY

Many of the developments that have reduced shared prosperity in the United States — automation, globalization, worker-unfriendly corporate governance, weakened labor unions — won’t be easily reversed. Given this, the best strategy for getting pay for ordinary Americans back in line with growth of the economy may be some combination of tight labor markets, industry-specific and occupation-specific minimum wages, profit sharing, and an improved Earned Income Tax Credit.29

SUMMARY

Since the late 1970s, the incomes of middle-class Americans have increased less rapidly than economic growth would have allowed. America’s middle class is well-off by comparative and historical standards, but it could be doing a good bit better.

  1. Lane Kenworthy, Is Inequality the Problem?, Oxford University Press, 2025. ↩︎
  2. John Rawls, A Theory of Justice, Harvard University Press, 1971; Lane Kenworthy, Progress for the Poor, Oxford University Press, 2011. ↩︎
  3. Lane Kenworthy, “America’s Great Decoupling,” in Inequality and Inclusive Growth in Rich Countries, edited by Brian Nolan, Oxford University Press, 2018. ↩︎
  4. These years are good starting and ending points, because both are business-cycle peaks. ↩︎
  5. See, for instance, Robert J. Samuelson, The Good Life and Its Discontents, Times Books, 1995; W. Michael Cox and Richard Alm, Myths of Rich and Poor, Basic Books, 1999; Gregg Easterbrook, The Progress Paradox, Random House, 2003; Stephen J. Rose, Rebound, St. Martin’s Press, 2010; Richard V. Burkhauser, Jeff Larrimore, and Kosali I. Simon, “A ‘Second Opinion’ on the Economic Health of the American Middle Class,” Working Paper 17164, National Bureau of Economic Research, 2011; Bruce D. Meyer and James X. Sullivan, “The Material Well-Being of the Poor and the Middle Class Since 1980,” Working Paper 2011-04, American Enterprise Institute, 2011. ↩︎
  6. Census Bureau, Income and Poverty Data Tables. ↩︎
  7. See also Faith Guvenen, Greg Kaplan, Jae Song, and Justin Weidner, “Lifetime Incomes in the United States over Six Decades,” Working Paper 23371, National Bureau of Economic Research, 2017. ↩︎
  8. Census Bureau, “Historical Income Data,” table F-11. ↩︎
  9. Lane Kenworthy, “Migration,” The Good Society. ↩︎
  10. The data are at Census Bureau, “Historical Income Data,” table F-5. ↩︎
  11. Jess Bailey, Joe Coward, and Matthew Whittaker, “Painful Separation: An International Study of the Weakening Relationship between Economic Growth and the Pay of Ordinary Workers,” Commission on Living Standards, Resolution Foundation, 2011, figure A3, using data from the OECD; Lawrence Mishel, Josh Bivens, Elise Gould, and Heidi Shierholz, The State of Working America, 12th edition, Economic Policy Institute, 2012, pp. 180-183, using data from the Bureau of Labor Statistics Employer Costs for Employee Compensation (ECEC) survey. ↩︎
  12. David S. Johnson, “Using Expenditures to Measure the Standard of Living in the United States: Does It Make a Difference?,” in What Has Happened to the Quality of Life in the Advanced Industrialized Nations?, edited by Edward N. Wolff, Edward Elgar, 2004; Meyer and Sullivan, “The Material Well-Being of the Poor and the Middle Class Since 1980.” See also Orazio Attanasio, Erik Hurst, and Luigi Pistaferri, “The Evolution of Income, Consumption, and Leisure Inequality in the US, 1980-2010,” Working Paper 17982, National Bureau of Economic Research, 2012. ↩︎
  13. Lane Kenworthy, “Wealth Distribution,” The Good Society.. ↩︎
  14. Isaac William Martin and Christopher Niedt, Foreclosed America, Stanford University Press, 2015. ↩︎
  15. Walter Isaacson, Steve Jobs, Simon and Schuster, 2011. ↩︎
  16. The data in the following paragraphs come from a variety of sources, including Stanley Lebergott, The American Economy, Princeton University Press, 1976; Cox and Alm, Myths of Rich and Poor; Easterbrook, The Progress Paradox; Claude S. Fischer, Made in America, University of Chicago Press, 2010. ↩︎
  17. For an argument that the pace of innovation has been less rapid since the mid-1970s, see Tyler Cowen, The Great Stagnation, Penguin, 2011. ↩︎
  18. See in particular Elizabeth Warren and Amelia Warren Tyagi, The Two-Income Trap, Basic Books, 2003; Monica Lesmerises, “The Middle Class at Risk,” Century Foundation, 2007; Rebecca M. Blank, “Middle Class in America,” US Department of Commerce, 2010. ↩︎
  19. Raj Chetty, David Grusky, Maximilian Hell, Nathaniel Hendren, Robert Manduca, and Jimmy Narang, “The Fading American Dream: Trends in Absolute Income Mobility Since 1940,” Science, 2017. ↩︎
  20. Census Bureau, “Historical Income Data,” table F-12. ↩︎
  21. Jerry A. Jacobs and Kathleen Gerson, The Time Divide, Harvard University, 2004. ↩︎
  22. Harriet Presser, Working in a 24/7 Economy, Russell Sage Foundation, 2003. ↩︎
  23. Brian McKenzie and Melanie Rapino, “Commuting in the United States: 2009,” US Census Bureau, 2011. ↩︎
  24. Some suggest that the cost of goods and services consumed by low-income households has risen less rapidly than that of the bundle used to adjust for inflation. See Christian Broda and John Romalis, “Inequality and Prices: Does China Benefit the Poor in America?,” unpublished paper, 2008. Others conclude that this is wrong. See Meyer and Sullivan, “The Material Well-Being of the Poor and the Middle Class Since 1980.” ↩︎
  25. Lesmerises, “The Middle Class at Risk,” figure 12, using data from Warren and Tyagi, The Two-Income Trap. See also J. Bradford DeLong, “The Changing Structure of Prices since 1960,” Grasping Reality, December 8, 2012. ↩︎
  26. Lane Kenworthy, “College Education,” The Good Society. ↩︎
  27. Kenworthy, “Income Distribution.” ↩︎
  28. Stefan Thewissen, Lane Kenworthy, Brian Nolan, Max Roser, and Timothy Smeeding, “Rising Inequality and Living Standards in OECD Countries: How Does the Middle Fare?,” Journal of Income Distribution, 2018; Kenworthy, Is Inequality the Problem? A related hypothesis is that the cause is a sharp fall in the share of value-added in the economy going to labor. But while the labor share did fall, the decline was fairly minor, and it was smaller than in many other rich nations. Bailey et al, “Painful Separation,” figure A2, using OECD data. ↩︎
  29. Lane Kenworthy, “How to Ensure Rising Living Standards When Labor Unions Are Weak,” The Good Society. ↩︎