James Pethokoukis reminds National Review Online readers that left-of-center partisans have spent decades bemoaning the decline of the middle class, despite any evidence backing their claims.
But where have been the decades of protests and riots? And why did America keep electing centrist- to center-right presidents? Even Barack Obama ran in 2008 as more Clintonian technocrat than Great Liberal Equalizer.
The answer is that the data don’t back up those claims of middle-class meltdown. While the portion of American households that are middle-income has declined since the late 1960s, that drop was more than offset by share gains in the upper income levels.
“America’s middle class did start largely disappearing in the 1970s — but it was because they were moving up to a higher-income category,” writes economist Mark Perry at his Carpe Diem blog. Likewise, research from economists such as Cornell’s Richard Burkhauser and the University of Chicago’s Bruce Meyer finds total median household income, adjusted for inflation, up roughly 40 to 50 percent since the late 1970s.
But Pethokoukis adds that the increasing ability of “smart machines” to substitute for human labor might mean that the “tired, fact-free, left-wing storyline” is now catching up to reality.
Is this future of lowered expectations, as plausible as it is, one that must be or may be? [George Mason University economist Tyler] Cowen for the most part adopts a detached “It is what it is” posture.
But American policymakers don’t have to be as passive. Education can be improved and reoriented to teach machine-complementary skills. Fewer mandates, along with wage subsidies, can make it more affordable to hire carbon-based life forms or start businesses.
A more pro-investment tax code can help produce the sort of innovation that creates new industries and jobs rather than just making existing ones more efficient. Cheaper urban housing via zoning deregulation would allow more people to benefit from living in the nation’s innovation hubs.
