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Let's Hope this Trend Continues

Here’s a letter that I sent back in June of this year to the New York Times:

Bob Herbert asserts that the United States economy “has trouble producing enough jobs to keep the middle class intact” (“Out of Sight,” June 10). While there are always cyclical ups and downs, Mr. Herbert’s statement – if meant as an indictment of the economy’s long-term performance – is contradicted by the facts. Not only is the unemployment rate still at a reasonable level, the Census Bureau reports that real median household income (reckoned in 2006 dollars) was $48,201 in 2006, up from $36,847 in 1967 – an increase of 31 percent. And this  growth has been pretty steady over these 40 years.

Moreover, this figure underestimates the middle-class’s increasing prosperity, for it ignores the shrinking size of households. In 1967, the average household contained 3.14 persons; in 2006 it contained 2.57 persons. This fact means that the real income for each member of the average household grew from $11,735 in 1967 to $18,755 in 2006 – an increase of 60 percent.

Donald J. Boudreaux

(For figures on U.S. household size, see Brad Schiller, “The Inequality Myth,” Wall Street Journal, March 10, 2008, p. A15.)