There is consensus among populists on the left and the right that typical workers and households had it better decades ago. 

Senator Bernie Sanders, the candidate to beat for the Democratic presidential nomination, has said that Americans are “overworked, yet our standard of living has fallen.” He went further: “For many, the American dream has become a nightmare.” 

And Senator Josh Hawley, a Missouri Republican and rising conservative populist star, directed his Twitter followers last week to a report “to understand the pressure felt by the American middle.”

That report was written by Oren Cass, executive director of American Compass. Cass argues that “family finances are coming under increasingly untenable pressure.” To demonstrate that, he claims that in 1985 the typical male worker could cover his family’s housing, health care, transportation and education expenses on 30 weeks of salary. But in 2018, his salary for the entire year would fall short. The chart summarizing Cass’s finding was described this week by the Washington Post as “the best explanation of middle-class finances you will ever see.”

Unfortunately, his chart and analysis have several serious flaws. Here are just a few.

To demonstrate that a typical male worker couldn’t cover these costs, Cass includes the charges for the annual cost of employer-provided health insurance for a family. In 2018, this was $19,616. But he does not include employer contributions to premiums in his measure of worker income. Similarly, Cass charges the worker the cost (measured by the sticker price) of college tuition, but does not include financial aid as part of the family’s income. 

He focuses on these items, whose costs have grown considerably over the past three decades, but ignores the many goods and services that have not seen large increases, like clothing, telecommunications services and energy. And he seems to have some fundamental misunderstandings about how official statistics measure price inflation.

Cass’s argument is not new. Conservative populists commonly argue that typical male workers today have great difficulty supporting their families, whereas in the past they could do so much more easily. Is that true?

Data from the Bureau of Labor Statistics show that from 1990 to 2019 the median male worker’s wages grew by 23%. The bottom 10% of male workers saw their wages increase by 36% over this period. Male workers in the 20th percentile—those who earn more than the bottom 19% but less than the top 80%—had 30% wage growth. 

All these figures are adjusted for inflation. That is, they account for increases in the prices of housing, health care, education and transportation—Cass’s four categories—but also for the prices of many other goods and services. 

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