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Let's Hope this Trend Continues

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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 [2],” 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 thisĀ  growth has been pretty steady over these 40 years [3].

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 [4],” Wall Street Journal, March 10, 2008, p. A15.)