Recently, in a conversation with Joe Rogan, Senator Bernie Sanders from Vermont expressed a straightforward and relatable point. He argued that today’s frustrations stem from a time when families could afford their needs without constantly worrying about financial emergencies.
According to him, times have changed. The days of financial stability seem to be behind us. Costs are rising while wages remain flat. The middle class, he stated, is diminishing.
This argument resonates with many. We all know people struggling financially, or perhaps we’re feeling that pinch ourselves. Prices appear to be climbing, and it’s noteworthy that more households rely on dual incomes now than they did back in the 1950s.
But here’s the catch: while it’s easy to accept, that doesn’t tell the full story.
Many individuals are indeed using their earnings to cover expenses, but the overall percentage of people facing financial challenges isn’t necessarily shrinking—nor is it drastically expanding. A dive into the numbers reveals a different picture.
In 1990, the median household expenditure was $67,750. Fast forward to 2023, and that figure is now $77,280, marking an increase of about $10,000 over 35 years. This encompasses all sorts of spending including healthcare, housing, education, food, and more. So, the question that arises is whether wages have been keeping pace.
The answer is yes.
The median household income, when adjusted for inflation, went from $63,830 in 1990 to $80,610 in 2023. If we take inflation into account, real wages have actually increased by around $17,000, while the increase in costs was only about $10,000.
This indicates that wages are rising faster than costs.
In 1979, 13.4% of workers earned below the federal minimum wage; today, that figure stands at just 1.1%.
Looking between 1963 and 2022, the rate of extreme poverty has remained fairly stable, hovering between 0.25% and 1.25%.
Furthermore, the overall poverty rate has declined. Back in 1990, 13.5% of Americans lived in poverty; by 2023, that percentage dropped to 11.1%.
Even household debt as a ratio of GDP has been on a downward trend since 2011.
One doesn’t need to drown in numbers to see that we enjoy more wealth than our parents did. We have access to better food, advanced technology, and more entertainment options. More people are traveling, joining gyms, attending college, and opting for various medical procedures. Homes today are generally larger and often come with amenities like air conditioning or swimming pools. Life expectancy has also increased.
Still, this doesn’t imply that Sanders is completely off-base. Yes, certain expenses like education, healthcare, and housing have skyrocketed. The gap between the wealthy and the middle class is also more pronounced. But overall, it seems that wages have been responding to those rising costs, and the middle class today is, in fact, better off than ever before.
A kinder interpretation of Sanders’ message could be that even if families are earning more, they might be doing so because both parents are working. Material wealth alone doesn’t guarantee happiness. People might have higher wages, yet they may still feel unfulfilled.
However, Sanders’ longstanding perspective doesn’t necessarily advocate for a renewed focus on traditional values like family, friendships, or spirituality. Nor does it address issues like addiction or over-reliance on social media. His call is for the wealthy to contribute more so that the poor and middle classes can have more resources.
Still, persuading others to redistribute wealth based on inaccuracies may do more harm than good, potentially hindering real solutions to the issues driving social discontent, while negating the progress that has already been made to meet people’s needs.
