America: A dromedary, not a Bactrian camel
By Scott Sumner
It’s now becoming fashionable to describe America in binary terms, such as red and blue, coastal and middle, affluent and struggling. In my view these generalizations are often misleading.
Let’s take the case of income distribution. If you listened to many pundits, you would assume that America is divided into two groups—struggling non-college educated people who shop at Walmart, and affluent professionals who shop at Whole Foods. These articles create an image of a two-class society, that is, an income distribution that looks like the back of a Bactrian camel:
In fact, America’s income distribution is one hump not two. The vast majority of people are neither highly affluent nor struggling to survive. Indeed the largest group (of middle aged people) is middle class, people such as teachers and other state and local workers, unionized industrial workers, pharmacists, tax preparers, skilled carpenters, nurses, plumbers, electricians, ordinary office workers, miners, small businesspeople, typical (full time) farmers, long haul truckers, and many others. Here’s the actual income distribution—do you see two humps?
Neither do I.
These binary descriptions of America tend to mislead us. The left wonders why inequality is not a bigger issue. Maybe because the huge group in the middle isn’t sure whether the Dems want to redistribute money from the rich to them, or from them to the poor.
Interestingly, back in 1970 we did live in a Bactrian camel world:
We moved to a dromedary world when China went from being poor to being middle income:
See that $60,000 figure in the lower right corner? I feel very lucky right now. If you are a typical reader of this blog, you may feel that way too.
Why do pundits mislead us? Perhaps because they like to think about the world in terms of stories. This boring post doesn’t have an interesting story to tell.
PS. A comment on the median income in the US—which might seem rather low. That figure includes lots of young people working part time, as well as lots of retired people picking up a few extra bucks. Middle-aged full time workers tend to earn more, and of course family incomes tend to be higher than individual incomes.