Middle-income Americans have actually received a modest increase in their cash pay–a 1 percent annual rise through the 1980s, after adjusting for the broadest index of inflation, the gross national product deflator. Of course, rich Americans have done even better. But any claim that the middle class is doing poorly simply because the rich are doing better is based on jealousy, not facts,
For one thing, the money didn’t all go to the rich; much of it went into the environment. Americans have demanded cleaner air and water, purer foods and the removal of toxic wastes, among other measures. The vast investment by business and government in redesigned cars and billion-dollar scrubbers for utility smokestacks may contribute nothing to what is measured as personal income in the United States, but it has improved our quality of life.
An increased chunk of workers’ income also goes toward a second social purchase–social security–that has left millions of Americans better off. However grudgingly, Americans have accepted higher payroll taxes to provide a cushion for their parents and for themselves when they retire. Such payments have climbed much more rapidly than inflation. The number of retirees has rocketed ahead, too. Not all of the elderly need the increases; retirees on average now have cash incomes higher than those of working families under the age of 55. Yet working Americans continue to favor a system that provides even the richest retirees with ever larger monthly checks. Until voters decide this is foolish, they are getting what they ask for.
Fringe benefits also count for a lot. An employee can receive a pay hike in one of two ways: cash or benefits. But even accepting the arguable assessment that cash pay stood still in the 1980s, cash plus total benefits grew as Americans took more vacations and time off, increased their pension coverages and made more trips to the doctor.
Finally, the shrinking family leaves more money to go around. Although household income might have risen slowly, the size of households has slipped from 3.1 persons to 2.6 persons since 1970. That means each member of today’s smaller families is getting a bigger piece of the economic pie. In fact, cash income to each person in the United States has shown a solid increase through the ’80s , rising by an average of 1.8 percent a year. This was a third less than increases in the 1960s and 1970s, but still a fairly solid gain given the growth in fringe benefits, social-security payments and environmental spending.
In the first two and a half years of the Bush administration, incomes have grown more slowly than in most of the 1980s. This is probably a momentary glitch rather than a long-term trend. The real victims of the last decade are the poorest 25 percent of American families. By any measure, they have lost real ground in the income sweepstakes to inflation-and also to middle-income groups as well as the runaway rich. These poorest of America’s families are trying to raise almost a third of the nation’s children. Cry for them. Not for the middle class.
