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Discussion: (10 comments)

  1. Jack Walker

    Sorry but it seems to me that Burkhauser is just playing semantics to save face. Is he really saying that so many middle class people are getting wellfare, medicare, and SS disability etc that it makes up for stagnant wages? I can’t believe he can say this with a straight face. Give me a break.

  2. BJ Tyler

    Jack, please read first…comment second.

    1. Sharmarke

      I’ve read it as well; people have gotten Social Security checks, provisions out of health insurance, pension benefits, and welfare payments in the post-war era too.

      To equate that with pure cash income is wrong, and that’s why the CBO, Census Bureau, and Piketty and Saez haven’t taken those into account.

  3. Burkhauser’s methods do seem to paint the state of the middle class as better off in reality than Piketty and Saez do, but his study still shows disproportionate gain (aka inequality) in the top vs the middle. Even if you feel Burkhauser dispels the idea of stagnation, the study still supports the idea of economic inequality. I dont see how this would be of much help to the Conservatives- only when you take into consideration the ‘entitlements’, which ironically most Republicans are working to cut back on or eliminate, are things better- but still not good.

  4. Eric Taylor

    The comments above are essentially on point. It makes no sense to add federal assistance transfers to wages and make any claims about income distributions. But alas, this is exactly Burkhauser’s and AEI’s point – GOP continues to beat the drum of the takers v makers.

    There is a bigger issue here. Integrity! Of course anyone over the age of 20 and not married is an individual tax unit (in the reduced sense of income distribution). What these people do to make ends meet, live at home with their parents, co-habitate, what ever… is irrelevant and anyone worth their degree from Cornell knows it. In fact, it would not make a difference if they were married, since we know as middle class wages have declined the middle class family has become dual career units. But this does not change income distribution.

  5. Erik Kengaard

    It’s not reasonable to look at household income if more members of the household join the labor force over the study period. What most people would consider reasonable would be a measure of the ability of a family with one wage earner to cover the costs of home ownership, raising three children, putting them through college, and saving for retirement.

  6. Braku Nachaustenheim

    I was getting suspicious from the “lady doth protest too much” approach of Burkhauser’s pusillanimous caveats about “extraordinarily smart people”… then I got to:

    BURKHAUSER: “Let’s no longer take the tax unit as the unit of analysis. Now let’s look at the household. And you go from a gain of 3.2% over that period to a gain of 15.2%.”

    PETHOKOUKIS: “Just changing that measurement alone increases income by five times. Wow!”

    I’m sorry, but STUPID is STUPID. Even when not actually focusing, any normal honest and even vaguely numerate person would have spotted THAT ONE. Burkhauser doesn’t…. and thus confirms either that the dishonesty of his approach is conscious, or that he is innumerate. We could go into just how dishonest is his approach, but if you haven’t worked that bit out yet, you wouldn’t after my explanation… so why bother… Fairly obviously from your comments, most have you have got the joke!

  7. John Parsons

    It’s refreshing to see that Burkhauser’s “new math” doesn’t seem to be fooling anyone here.

    The real outrage is that Burkhauser says redistribitive policies have made things better, so we must stop redristributive policies.

    Seriously, he just said that on “Kudlow”. Checkout the transcript. Particularly his closing statement. JP

  8. It is refreshing to see from the comments that people recognize that Burkhauser’s points are essentially obfuscations. Assuming all the tweeks Burkhauser makes are fair, he essentially argues that median household income has increased by a little over 1% per year, rather than stagnating (it’s unclear if this growth in income was adjusted for inflation, so this is a best case scenario). Certainly that kind of growth is nothing to brag about, and even that is largely due to government efforts at redistribution. Much of the greater gains Burkhauser attributes to the cost of health care, but given the inflation in the health care system, it is hard to argue that all of the monetary benefits attributed to the adjustment actually represent increased value to the recipient. And of course, Burkhauser does not even try to refute the primary argument, which is that inequality is growing. So I guess in Burkhauser’s world, all the people in the little boats should be grateful that their boats have risen at all, and ignore that the yachts are surfing a huge tsunami.

  9. Brian Livingston

    Burkhauser’s failure to note the proliferation of two income households, alone, is enough to essentially invalidate his approach. Also, I’d like to ask Burkhauser why he doesn’t count corporate subsidies as “government transfers.”

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