Here’s some really good news: Median household income in the United States is at a record-high, inflation-adjusted $61,372. When you factor in the fact that today’s households contain fewer people, the news is even better. In 1975, for instance, average income per person per household was just $19,500 in 2017 dollars. Now it’s $34,000.
And get a load of this: There’s no evidence that income inequality has grown since the 1990s, or that the ability to move up and down the income ladder has shrunk in that time period. More people than ever live in households pulling down $100,000 (again, adjusted for inflation) than ever. Fewer households make less than $35,000 (adjusted for inflation).
All of this comes courtesy of the U.S. Census, as compiled and analyzed by economist Mark J. Perry. Perry works at the American Enterprise Institute and the University of Michigan (Flint), and he runs the blog Carpe Diem.
Do you feel happy yet? On today’s Reason Podcast, I talk with Perry both about his findings and why we don’t feel richer, happier, or more secure than we do. Perry isn’t a Trump booster by any means, but he suggests that some of the president’s policies—particularly the reductions in certain taxes and regulations—are helping to keep an economic expansion that started under Barack Obama moving along. At the same time, he worries about accumulating debt and trade wars that can raise prices and introduce wild uncertainty into the economy. When investors “see that there’s uncertainty about policy,” he says, “that starts to distort decision making and capital spending.”
Perry suggests one reason we don’t feel more satisfied with economic improvements is that they are a feature and not a bug of a free enterprise system. “The benefits of a market economy and the march of progress are so constant and so gradual that either we don’t appreciate it or don’t notice it,” he says. “So we have an under-appreciation of how much better things get all the time. If it happened all at once, we’d probably just be amazed.”
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