I wanted to share with the readership a blog that I wrote this week for The NEP-HIS Blog in response to Dr. Bruce Sacerdote’s working paper “Fifty Years of Growth in American Consumption, Income, and Wages.” I thought it was important to approach this from our “glocal” perspective in order to better understand the historical dynamic of U.S. consumption. Sacerdote argued that an analysis of historical consumption reflects a more positive economic outcome for those households earning below the national household median income, and I responded by saying that a cold analysis of consumption data does not reflect the impact that globalization, debt, and income disparity has on consumption. It is an interesting case of how data may be used by the researcher to advance a positivist argument that is distant from the realities experienced by individual consumers over time.
Sacerdote’s argument is that “despite the large increase in U.S. income inequality, consumption for families at the 25th and 50th percentiles of income has grown steadily over the time period 1960-2015.” (Is the Glass Half Full?) His analysis on consumption rates for the past fifty-five years leads him to the conclusion that “meaningful growth in consumption for below median income families has occurred” and that therefore the negative economic picture painted by those questioning increasing inequality in our country is not well grounded. (Is the Glass Half Full?)
Is the Glass Half Full: Positivist Views on American Consumption
Contrary to the popular outcry that the gap between rich and poor in the United States has steadily increased since the 1960s and that the quality of life has steadily deteriorated, Bruce Sacerdote argues that the picture is not as grim and that the steady rise of household consumption for households “with below median income” is evidence that the national economy has continued to thrive for all U.S. citizens and not just those on the top. In…