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Tuesday, July 24, 2012

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Ted Frank

That's not an apples to apples comparison. Household sizes are smaller. Millions of immigrants--legal and illegal--have improved their lot by coming to the US, but are reducing median US Incomes. The vast majority of Americans are making more than their parents did at the same age.

Brian

Possibly good points. We are talking about the last dozen years or so. Have household sizes been reduced significantly in the last dozen years? Has immigration increased significantly in the last dozen years? In any event, it's not clear to me why increased immigration should be considered an explanation for income decline. In the first 20 years of the 20th century, when immigration levels were fairly high, did median income drop in any 12-year period at a rate similar to the drop in the last 12 years? Finally, what's the evidence that "the vast majority of Americans are making more than their parents did at the same age."? Are there data that show that?

Two other points. First, smaller household size may itself portend economic problems -- such as the inability of the next generations to support a relatively too-large group of older, non-working adults. (The problem may be greater in Europe and China in light of the one-child policy (which gradually will be abandoned)). So, smaller household size may suggest that we need to loosen, not tighten, our immigration policy.

Second, it may not make sense to make income comparisons for other reasons. For instance, we now value things that we did not have before -- computers, far greater information access, various forms of entertainment, etc. -- that are relatively cheap. It is also possible that other goods and services that we value are less expensive than were previously.

Ted Frank

Early twentieth-century immigrants were substantially closer to median American wealth and skills than the millions of low-skilled immigrants who entered over the last decade. If you include those immigrants' outside-US earnings in the 2000 data, the statistics would look a lot different.

Between 2000-2007, the number of households increased by over 11 million, but the number of households with married couples increased by only 2.5 million. Percentage went from 54 to less than 51%--which has big implications when you're looking at just the 50th percentile.

Again, if the concern is whether Americans are doing better than their parents, why not simply look at the statistics that ask whether Americans are doing better than their parents? There, the answer is clearly yes, especially for women.

Ted Frank

The quality of life point you make is also very important. The average American *in poverty* today has more appliances, automobiles, etc., than the average American in the middle class 40 years ago. I'm writing this comment on a tablet that the richest billionaire in the world couldn't buy ten years ago.

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