Arkady
President
A lot of people don't seem to realize that Americans are actually richer today than at any point in history, in terms of real GDP per capita. Despite the big hit we took during and immediately after the "Great Recession," there's now more wealth to go around than ever:
As you can see, it isn't even close, when you compare where we are today to where we were at various points in the past that are remembered for great prosperity. For example, real GDP per capita today is $51,090, compared to $42,663 in the 1999, $34,148 in 1988, $22,454 in 1968, and $16,338 in 1955. As a society, we're producing 20% more per person than we were at the peak of the Clinton prosperity, about 50% more than at the end of the Reagan years, well over twice as much as in the late 1960s, and well over three times as much as back when everyone liked Ike.
So, why don't we feel richer? Part of it is changed expectations. We often overlook how good we have it today. For example, today's workaday cars, like a Camry or Impreza, will do 0-60 in 5.8 seconds. If you took that vehicle back in time to the mid-1960s, you'd blow the doors off a top-of-the-line Corvette, Porsche, or Ferrari. Your $400 iPhone SE has $3 million of data storage space on it by 1980 terms. Average new single-family homes have ballooned in size from 1660 square feet in 1973, to 2551 square feet in 2016, even as family sizes fell. In a lot of ways, the lifestyle of a median family today would look like the lap of luxury to earlier generations. We're a bit spoiled.
But, I think it's more than that. If you look at median real family income, the picture changes considerably:
A median family is poorer, in real terms, than at the end of the Clinton era. They're richer than back in the Reagan years, but not by that much -- around 8% richer than in 1988. The society as a whole is over twice as productive per person as in the late 1960s, but the median family is earning only 30% more. And since the mid-50s, the society as a whole has more than tripled in per capita production, but the median family income hasn't even doubled. Things are even uglier at the low end -- people in the bottom fifth of the income structure have actually lost ground since around 1970, even as production per capita doubled.
So, it's largely a question of distribution. In those earlier times, a much larger share of the wealth being generated went to everyday Americans. In the 1960s, a top CEO could expect to make 20 times as much as an average worker, but now it's about 300 times as much. In essence, the top portion of the income structure has been taking the lion's share of gains over the last several decades, and ALL of the gains --and then some-- since the end of the Clinton years.
As you can see, it isn't even close, when you compare where we are today to where we were at various points in the past that are remembered for great prosperity. For example, real GDP per capita today is $51,090, compared to $42,663 in the 1999, $34,148 in 1988, $22,454 in 1968, and $16,338 in 1955. As a society, we're producing 20% more per person than we were at the peak of the Clinton prosperity, about 50% more than at the end of the Reagan years, well over twice as much as in the late 1960s, and well over three times as much as back when everyone liked Ike.
So, why don't we feel richer? Part of it is changed expectations. We often overlook how good we have it today. For example, today's workaday cars, like a Camry or Impreza, will do 0-60 in 5.8 seconds. If you took that vehicle back in time to the mid-1960s, you'd blow the doors off a top-of-the-line Corvette, Porsche, or Ferrari. Your $400 iPhone SE has $3 million of data storage space on it by 1980 terms. Average new single-family homes have ballooned in size from 1660 square feet in 1973, to 2551 square feet in 2016, even as family sizes fell. In a lot of ways, the lifestyle of a median family today would look like the lap of luxury to earlier generations. We're a bit spoiled.
But, I think it's more than that. If you look at median real family income, the picture changes considerably:
A median family is poorer, in real terms, than at the end of the Clinton era. They're richer than back in the Reagan years, but not by that much -- around 8% richer than in 1988. The society as a whole is over twice as productive per person as in the late 1960s, but the median family is earning only 30% more. And since the mid-50s, the society as a whole has more than tripled in per capita production, but the median family income hasn't even doubled. Things are even uglier at the low end -- people in the bottom fifth of the income structure have actually lost ground since around 1970, even as production per capita doubled.
So, it's largely a question of distribution. In those earlier times, a much larger share of the wealth being generated went to everyday Americans. In the 1960s, a top CEO could expect to make 20 times as much as an average worker, but now it's about 300 times as much. In essence, the top portion of the income structure has been taking the lion's share of gains over the last several decades, and ALL of the gains --and then some-- since the end of the Clinton years.
