Arnold Kling  

The Median Household

Drug Patents... Shocked, Shocked!: Opposition ...

Anne Kim, Adam Solomon, Bernard L. Schwartz, Jim Kessler, and Stephen Rose write,

the “real” middle class is made up of households in their prime working years, ages 25-59, 75 percent of whom are couples and 56 percent of whom are couples with two earners. The median income of these prime age households is more than $61,000. If it is a married-couple household, the median is more than $72,000. And if both spouses work, the median is more than $81,000.

Other key points they make:

--some of the volatility in income reflects childbearing women leaving and re-entering the labor force

--official personal savings figures are understated because they fail to take into account "sweat equity" accumulated in personal businesses (they calculate this as 5 percent of income from 1990 through 2003).

--the trust that makes impersonal markets work requires government regulation

Overall, the paper reflects a "can-do" vision for government. Government can do all sorts of things that will help people, if leaders will just grasp the ways in which the economy has changed. For example, they think that government can make college education more "accessible."

Thanks to Tyler Cowen for the pointer.

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CATEGORIES: Income Distribution

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The author at amcgltd in a related article titled Changing the Rules writes:
    Those of you who claim I never, ever admit the other side has anything worthwhile to say should absolutely not read this paper. No way. Don't want to destroy illusions, you know. While I'm by nature suspicious of progressive... [Tracked on February 21, 2007 1:42 PM]
The author at Economic Investigations in a related article titled News of the World #25, Jumbo Edition writes:
    Prepare yourself for the most comprehensive and wicked cool News of the World EVAR… On behavioral economics and related The Quote of the Day at The Bayesian Heresy is by Herbert Simon. Fudenberg on Behavioral Economics, Cafe Hayek … Even if... [Tracked on February 21, 2007 2:26 PM]
COMMENTS (2 to date)
Nathan Smith writes:

These people who are simultaneously avowed Third-Wayers and Bush-phobic drive me crazy. What is Social Security reform if not a way to bring the social contract up to date in a time of economic change? The Medicare prescription drug plan represents, ultimately, an indirect public subsidy to intellectual property creation in a key area. The No Child Left Behind Act represents an increase in federal responsibility for early education, reflecting increased mobility in the population that makes local control less appropriate. Maybe these are good ideas, maybe bad, but they are heresies vis-a-vis traditional conservatism and Third Wayers need to recognize Bush as one of them, in his own way. Why should we listen to new ideas from these unelected know-it-alls if they won't listen to new ideas from our elected leaders?

spencer writes:

"sweat equity" in a personal business is the same as a capital gain on a stock or a higher price for your
home. It is wealth, not savings. Wealth is a stock. Savings is a flow. They are two very different things.

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