1/For a chance of pace, today's @bopinion post is optimistic!
It's about the robust growth in middle-class incomes from 2014 through 2019.
bloomberg.com/opinion/articl…
2/On the eve of COVID, median U.S. household incomes, adjusted for inflation, were substantially higher than they had ever been before.
By many measures, this income growth was even better than the late 90s.
3/Remember, one way people in the 90s grew their incomes was by putting in more hours. That was far less true in the 10s.
So the 10s income growth wasn't just bigger -- it was better.
4/And poverty fell substantially.
epi.org/blog/racial-di…
5/Total growth in real median household income between 2014 and 2019, by race:
White: 9.91%
Black: 7.75%
Hispanic: 22.77%
Asian: 21.29%
6/And these gains are helping to push up intergenerational mobility.
7/Why was the 2010s expansion so good for American incomes, especially compared to the crappy "Bush boom" of the 00s, in which middle-class incomes actually fell?
8/One reason: The 2010s expansion went on much longer.
It takes a while for growth to start flowing to the middle class and poor. Frequent recessions interrupt that process.
bloomberg.com/opinion/articl…
9/A second reason: In the 2000s, Chinese competition held down U.S. wages and employment. By the 2010s, the China Shock was over.
nbloom.people.stanford.edu/sites/g/files/…
10/So the 2010s were a golden(ish) age for American middle-class incomes.
Now, it's important to note that middle-class WEALTH was still somewhat depressed from the housing crash. If people felt like the economy wasn't as good as the 90s, this is probably one reason why.
11/But in any case, the robust income growth from 2014-2019 teaches us at least two lessons.
First: KEEP EXPANSIONS GOING AS LONG AS POSSIBLE. The longer a boom, the more it helps the middle-class and poor.
12/And second: The U.S. economic system still has the power to generate middle-class prosperity, if it's not tripped up by recessions or other big shocks.
Arguments that the U.S. economic system is fundamentally broken go too far.
13/Anyway, COVID brought this era of growth to an end, and political unrest may demolish it further. So we still might be screwed.
But there's more underlying strength in America than people realize.
(end)
bloomberg.com/opinion/articl…
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