The first time you see a dubious economic claim, you may not take much note of it. The second time, your neck hairs should stand on end. The third time is the clue that a purposeful attempt is underway at pushing a misleading meme.
I take it as my personal obligation to rebut false tropes and debunk nonsense.
Case in point is an article with the headline “The Canard About Falling Incomes.” It asserted, among other things, that the consumer-price index is obsolete and thanks to so-called hedonic-quality adjustments -- a result of technological improvements --- we are all individually wealthier than ever and that stagnant wages are misleading.
These claims are nonsense. The author conflates issues that are best analyzed separately. So let’s consider each in turn:
• Wage gains: The data show that the middle class has made only modest gains since the financial crisis; indeed, this is a pattern that dates to the 1970s.
The issue, which has been dismissed by some, is that the top 10 percent, 1 percent and especially top 0.1 percent have captured almost all of the gains that the economy has produced.
There are well-established reasons for this: the combination of reduced union strength; the impact of automation and technology; globalization leading to a labor arbitrage between developed and developing nations; and a tax code that has become less progressive since the 1980s, favoring capital over labor. Note that this is not a critique, but a mere acknowledgement of facts.
• Technological innovation: There’s this tired trope that gets trotted out whenever the issue of middle-class income stagnation comes up -- we have iPhones and Netflix, anti-locking brake systems and ride-hailing apps. It’s all so wonderful! Why the ingratitude to the tech overlords for this bounty?
But as I first explained a decade ago, and have been repeating with some regularity since, progress is humanity’s default setting. That the relentless march of human ingenuity eventually makes its way to all of society is a wonderful thing.
It also means that we now pay for lots of new things: internet access, mobile phones and data services, Netflix, Amazon Prime, tablets, cloud storage, ebooks are all part of the family budget today -- all of it stuff that did not exist 30 years ago.