With this detailed analysis, Mark Perry joins the ranks of Scott Winship and other scholars in busting the viral myth – one re-introduced into the body-politic most recently by Oren Cass with his Cost-of-Thriving Index – that ordinary Americans’ cost-of-living is today higher than it was decades ago. Here’s Mark’s conclusion:
Cass claims that his analysis using a fictional one-earner family and contrived, improvised expenditure data demonstrates that “The U.S. economy of recent decades has eroded, rather than reinforced, the American model of thriving, self-sufficient families. In the decades to come, we will need to do better.” My alternative conclusion using real-world BLS data on actual out-of-pocket consumer expenditures and income for the average, typical consumer unit that more realistically represents the experience of a typical American is much different. The average American household is flourishing and thriving today compared to 25 or 35 years ago and is actually able to cover a year of major expenses with two fewer weeks of income than in 1985. While Cass recommends that policymakers rely on his COTI to “interpret the nature and quality of economic progress,” I recommend that policymakers ignore the COTI because it’s contrived and flawed as I and many others have concluded. Instead, policymakers should rely on better and more realistic analyses and data to assess what I conclude is the ongoing economic progress of average Americans as they continue to enjoy an ongoing, upward trajectory in their rising standard of living.
And see Scott Winship’s follow-up.
“The bottom line is that the costs of Trump’s tariff are being shouldered by U.S. businesses and consumers.” – This summarizes Dan Ikenson’s conclusion of his careful analysis of the burden of Trump’s
tariffs punitive taxes on American buyers of imports.