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Things are pretty awesome, says economist with million dollar household income

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I kind of hate to be so snarky about this, because University of Michigan semi-celebrity economist Justin Wolfers makes some good points in this NYT op-ed, the central one of which is this: People think of higher prices as something that is being (unjustly) imposed on them, and higher wages as something that they’ve earned. So when prices and wages go up in tandem, as they have over the course of the recent high inflation period, everybody is mad, even though, on average, people are not worse off, economically speaking. Indeed they’re slightly better off as, per his statistics, wages have gone up by 22% since the start of the pandemic, while prices have risen by 20%. And this actually represents a faster than average rate of real wage growth than that seen over the past several decades.

And Wolfers does caveat all this with the observation that these are averages, some people are really hurting, and the price of housing is something to worry about.

Still, dude.

Your salary from my alma mater, as well as that of your life partner — to whom you aren’t married for purely tax reasons, which sounds like some sort of econ joke — add up to $590,000 a year, which just happens to be the cut point for the 99th percentile of household income in the good old USA. And that’s just your salary! Who knows what you’re making from all those podcasts, books, consulting, and what not? Are y’all pulling down a million a year? Maybe! Maybe it’s “only” $700,000-$800,000. And have you seen the price of Peruvian beaver milk cheese at Whole Foods lately?

Ok now I’m feeling bad, because it really is a good column, that makes important and under-appreciated points. Also, Wolverines!

But this week in my Economics of the American Legal System class I’m teaching Matthew Desmond’s Evicted and Kathyrn Edin and Luke Shaefer’s $2.00 A Day, so I’m not feeling bad enough not to drag this guy a little, because come on.

Also, too, this seems . . . questionable:

The income of the average American will double approximately every 39 years. And so when my kids are my age, average income will be roughly double what it is today. Far from being fearful for my kids, I’m envious of the extraordinary riches their generation will enjoy.

I’m but a simple country lawyer, but a quick glance at the government’s historical income tables shows me that the 20th percentile of household income is currently $30,000, while it was $24,000 39 years ago (constant dollars obvi) which is, as Marcellus Wallace might put it, pretty [expletive deleted] far from doubling. And I bet it’s worse than that at the 10th decile, which I can’t look up in five seconds, which is all I have right now since I have to go down mine to complete the preliminary coal face scouring operations with our new tungsten carbide drill.

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