Monday, August 26, 2019

By world standards, the middle class in the US still does very well

After reading Biyamen Applebaum's thought-provoking piece in the NYT today, I thought about how economists measure well-being, and how measures other than GDP per capita better reflect social welfare.  One obvious measure is median disposable income--a good representation of middle-class affluence, in that it is at the middle, and is not skewed by the top end of the distribution.

After looking at OECD data that I myself adjusted for exchange rates, a Wikipedia article based on OECD data, a Mises report also based on OECD data, and World Population Review, the consensus ranking of the US for median income is fourth, after Luxembourg, Norway, and Switzerland.  The top five is rounded out by Australia.  Median income here is the disposable median, meaning after taxes and transfers.

This is not to say the US couldn't be doing better.  As I noted in an earlier post, median income is pretty stagnant here.  I would also be curious about the variance of disposable income at the household level.  If people have steadier incomes at the median in other places, they may feel more economically secure.

Nevertheless, if we were to list our most serious economic issues, failing the middle class, at least relative to other countries, would not be on the top of the list.

No comments: