From Full Stack Economics:
If there’s one thing the left and right seem to agree about, it’s that the US economy’s best days are in the past.
“More than a decade of reckless fiscal policies have devalued the US dollar to the point that middle-class people can barely survive in the United States,” Fox News host Tucker Carlson claimed in March.
“In America today, our younger generations, through no fault of their own, now [have] a lower standard of living than did their parents,” Sen. Bernie Sanders (I-VT) said last year. “The American dream is going backwards.”
There’s no doubt that the inflation of the last year has lowered living standards for many Americans. But pundits and politicians have been talking like this for years. During his 2016 presidential campaign, Sanders declared that “our standard of living has fallen” and “the American dream has become a nightmare.”
Donald Trump concurred, stating in 2015 that “the American dream is dead.”
But have average Americans really suffered from falling living standards over the last 30 or 40 years? I’ve spent the last month researching this question, and the data I’ve found simply don’t back up these claims.
Not every facet of our economic life is improving, of course. College tuition has risen a lot, and so have rents in some big metro areas. But even in problem sectors like health care, housing, and education, the situation isn’t as grim as pessimists claim. And there are many other areas of economic life where we are unambiguously better off than our parents.