Edited by Edward N. Wolff
Chapter 1: Recent Trends in Living Standards in the United States
1. Recent trends in living standards in the United States Edward N. Wolﬀ INTRODUCTION The media have been aglow with reports of the booming economy and rising prosperity in the United States since the early 1990s. Indeed, the runup in stock prices between 1995 and 2000 created the impression that all families were doing well in terms of income and wealth.1 This, however, was certainly not the case. As I shall demonstrate, most American families have seen their level of well-being stagnate over the last quarter-century. Despite this recent boom, the last quarter of the twentieth century witnessed some disturbing changes in the standard of living and inequality in the United States. Perhaps the grimmest news is that the real wage (average hourly wages and salaries of production and nonsupervisory workers in the total private sector, adjusted for inﬂation) has been falling since 1973. Between 1973 and 1993, the real wage declined by 14 per cent, though it has since risen by 7 per cent from 1993 to 2000, for a net change of Ϫ8 per cent.2 Changes in living standards have followed a somewhat diﬀerent course. Median family income, after increasing by 13 per cent in real terms between 1973 and 1989, fell back to its 1979 level in 1993, though it has since grown by 17 per cent between 1993 and 2000 (US Bureau of the Census 2002a). Despite falling real wages, living standards were maintained for a while by the growing labor force participation of...
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