Richard Wolff on the Growth of Wages Vs Housing, Education, and Health
Richard Wolff on the Growth of Wages Vs Housing, Education, and Health


Here’s what he did, a simple exercise but
boy does it tell a lot. He asked how much has the median income of an American
family changed over the last thirty years counting from 1987 to 2017, a nice
period of 30 years we can look at. And he said, I want to see how much income (the
50% middle of the American distribution of income) how has it changed over those
thirty years? And here’s what he found. When you adjust for inflation, in other
words you adjust for the fact that prices went up, the median income of an American family went up 14% in 30 years. That’s less than
0.5 of 1% of a real increase, on average, for an American
family. In other words, very little at all. And then he said, I want to look at three
specific other things that American families have to pay for to see what
happened to them, because it’ll give us an insight. And here’s what he found and
I’m gonna give you the exact numbers. Housing prices (one of the most important
things anybody spends money on) over the same 30 years (1987 to 2017) went up,
adjusted for inflation, that taking account of rising general prices,
it went up not 14 percent (that’s what people’s income went up) 290%.
That’s right. Tripled. So the cost of housing has taken a
bigger and bigger chunk out of Americans income. They’re still living in the same
place, they’re sleeping there, and meeting there, but the amount of their income
they have to spend to be able to do those things has dramatically increased.
Then he looked at public 4 year colleges, they’re cheaper in
general than private. How far did they go up over the same thirty-year period
adjusting for inflation? And here’s what he found: that those kinds of
us went up 311%. They went up even faster than housing. So if you want to
live somewhere and you want your kids to go to college, oh boy have you had to cut
back on other things to pay for those things. And finally he looked at per
person healthcare expenditures. And they went up 51% compared to the
income that went up 14%. In other words those three things; housing, college
education and personal health care, really took more and more out of people
leaving less and less for everything else. And that’s the reality of people
have lived in the United States. And why? Because our economic system doesn’t
produce housing at a rate that will allow people to live in a home without
being gouged this way. And what about college? Because our
system doesn’t provide the funding for 4-year public colleges that it used to
provide. More and more of the payment for that education has to come out of the
family sending their children to school. And in health care, well we talk about
that all the time. The medical industrial complex jacking up the prices of your
drugs, of your hospital stay, of your doctor, of your medical insurance. And
then you can see the squeezing of the American family as these three messed up
parts of our economy eat up more of the real income Americans have. It is
something to understand how this system gets down low into the individual lives
we all lead to cause us the pain and the difficulty that’s showing up in such
anger in our culture these days.

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